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National King Coal, LLC Telephone: Fax: Email: <br />(970)385-4528 (970)385-4638 nkc@NKCmine.com <br />P.O. Box 2905 4424 County Road 120 ~'V~ [^~ <br />Durango, Colorado 81302 Hesperus, Colorado 81326 ~OV <br />December 9, 2003 p <br />State of Colorado <br />Division of Minerals and Geology 9~ <br />11313 Sherman Street, Room 215 CF/~ <br />Denver, Colorado 80203-2273 ~'9ip~ ~~ <br />Attention: Harry Ranney, Reclamation Specialist o"~roo~~9e. 92p <br />Re: Fourth Quarter 2003 Surface Subsidence Inspection ~Sa~ ~¢ <br />Fourth Quarter 2003 Huntington Ditch Inspection `~'~ajy <br />Dear Harry: <br />On December 9, 2003, a complete inspection of the Crawford Property was conducted. <br />Present for the inspection were Harry Siebert, Consultant and Tom Bird, National King <br />Coal, LLC. Marc Crawford was contacted upon our arrival. <br />A crack which developed over the southeast end of Sections i Right and 2 Right was filled <br />during the fall of 2002 using a backhce and fill dirt. These cracks to the southeast of the <br />Marc Crawford house show no signs of further separation. Vegetation is beginning to re- <br />establish in the areas disturbed by the repair process. No other cracks or subsidence <br />related features were noted during this inspection. <br />Mining has been completed beneath the Dunn/LJte Mountain Ute Tribe Lease. OSM has <br />been checking, measuring, photographing and mapping these cracks on a quarterly basis. <br />These cracks look much like the cracks which are not under OSM jurisdiction. The most <br />recent OSM inspection revealed that the cracks repaired by NKC are still in good shape <br />and the other cracks are healing nicely. OSM is now willing to release the bond. The <br />Tribe has not yet released the lease which is holding up the bond release. <br />The other areas where pillars have been extracted are Sections No. 1 Right through No. 6 <br />Right, 4 West, 7 South, 6 South and 5 South/1 Left. The 7 South and 6 South area exhibits <br />normal subsidence tension cracks extending north from a point about 300 feet south of the <br />Huntington Ditch. This area of the ditch has been replaced with a buried pipeline. Some <br />cracks appear to have crossed the pipeline with no apparent consequences. The landowner <br />is monitoring the situation closely. <br />Please call if you have any questions. <br />Sincerely, <br />Tom Bud <br />Manager, Coal Services <br />National King Coal, LLC <br />