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Peak Project Management, LLC <br />34115 County Road 20.8 <br />CC~~++EIVE~ Trinidad, CO 81082 <br />RG~J Telephone/Fax: (7+8) 846.4975 <br />1 2006 tali: (7+e) sse-o+++ <br />A0G 0 e-mail: ronthompson~sensonics.org <br />Divisron of Minaret, ana Gade91 <br />July 29, 2006 <br />Mr. Kent Gorham <br />Division of Minernls and Geology <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />Re: Lorencito Canyon Mine, Permit No. G96-084 <br />Annual Hydrology Report - 2005 <br />Dear Mr. Gorham: <br />By this letter Lorencito Coal Company LLC hereby submits the 2005 Annual Hydrology Report for the <br />Lorencito Canyon Mine. The report has been reorganized as compared to eazlier reports with additional <br />appendices to provide better organization of data, field and laborntory reports. <br />Note that during both 2004 and 2005, the sampling frequency occurred at a reduced level with semi-annual <br />field sampling and annual laboratory analysis as compazed to the sampling frequency required during active <br />mining (quarterly field samples and semi-annual laboratory analysis). Although LCC believes that the <br />reduced frequency has not compromised the analytical program, LCC is proposing to collect quarterly <br />analytical samples for four consecutive quarters. This will result in [he same number of sample sets as <br />would have been available under the approved monitoring program. <br />7tte 2004 annual report is also being revised to follow the format of this years report and correct <br />deficiencies and missing information in the previous report. This revision will not duplicate the graphs <br />presented in the 2005 report showing 2004 data. Most of this information has already been compiled and <br />the fmal revision will be submitted in early August. <br />If you have any questions or require further information, please contact me. <br />Sincerety, <br />Ron Thompson <br /> <br />Enclosure: 2-2005 Annual Hydrology Reports <br />