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RECEi~/ED <br />ENERGY, INC. <br />February 20, 2003 <br />FEB 2 k 2003 <br />ASubaidimp of <br />Deaerrt Ceneraaan h <br />Trvn{mia~ion Coopenaive <br />Deaz Jim: <br />Mr. Jim Stark <br />Division of Minerals and Geology <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />Division of Minerals and Geology <br />Re: 2002 Annual Subsidence Inspection Report <br />Blue Mountain Energy, Inc. <br />Deserado Mine ID No. C-1981-018 <br />Visual inspections were completed above RP-1 during 2002 to detect evidence of surface <br />subsidence, as required under Section III.A.7.1{10) of our approved mine permit. Two visual <br />surveys were performed during the year for this area. There was no evidence of subsidence <br />observed. A map is attached showing the route traveled during these inspections. <br />No problems have evolved from the subsidence of longwall panels in the B-seam. No stream <br />flow was observed in portions of Scullion Gulch subject to subsidence. This is typical for the <br />upper portions of this drainage. Subsidence cracks observed in 2001 have substantially healed <br />with time and natural weathering. <br />Sincerely, <br />~a~~ <br />Scott Wanstedt <br />Environmental Engineer <br />cc: Jeff Dubbert <br />File <br />3607 County RD #65 <br />Rmigely,CO 51648 <br />970fi75-0300 <br />Fax 970b75-0399 <br />