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National King Coal, III <br />P.O. Box 2905 <br />Durango, Colorado 81302 <br />May 7, 2001 <br />I II I II I II IIII III (970) 385-4528 <br />999 <br />4424 County Road 120 <br />Hesperus, Colorado 81326 <br />State of Colorado <br />Division of Minerals and Geology <br />11313 Sherman Street <br />Room 215 <br />Denver, Colorado 80203-2273 <br />Attention: Harry Ranney, Reclamation Specialist <br />Re: First Quarter 2001 Surface Subsidence Inspection <br />First Quarter 2001 Huntington Ditch Inspection <br />Dear Harry: <br />Fax: Email: <br />(970) 385-4638 nkc®frontier.net <br />G70~ <br />RECEIVED <br />MAY ~ 9 2001 <br />Division olMinerals e <br />~epI09Y <br />The area over Section 1 Right on the Crawford property was pillared in August/September <br />2000. We have not found any cracks in this area as of yet, although snow and mud have <br />made this remote area impossible to access for now. <br />Mining has been completed beneath the Dunn/Ute 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. As per <br />OSM suggestion, we repaired two cracks which intersected atwo-track road paralleling the <br />east-west fence on the south side of the property. The most recent OSM inspection <br />revealed that the cracks repaired by NKC are still in good shape and the other cracks are <br />healing nicely. If this trend continues, they are willing to release the bond following the <br />next quarterly inspection. <br />The other areas where pillars have been extracted are Sections No. 4 West, 7 South, 6 <br />South and 5 South/1 Left. The 7 South and 6 South area exhibits normal subsidence <br />tension cracks extending north from a point about 300 feet south of the Huntington Ditch. <br />This area of the ditch has been replaced with a buried pipeline. Some cracks appear to <br />have crossed the pipeline with no apparent consequences. The landowner is monitoring <br />the situation closely. <br />Call if you have any questions. <br />Sincerely, <br />~~ <br />/~------ <br />Tom Bird <br />Planning & Engineering <br />National King Coal, LLC <br />