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• Introduction <br />The May 22, 2006 letter from the Colorado Division of Minerals and Geology (Division) <br />to J.E. Stover & Associates provides an informal opinion regarding the occurrence of <br />alluvial valley floors (AVFs) in the proposed Red Cliff Mine study area located north of <br />Loma, in Mesa and Garfield Counties. Based on information provided in permit <br />applications for nearby properties, an Office of Surface Mining (OSM) June 1985 <br />publication regarding reconnaissance AVF maps for this area, and review of satellite <br />imagery, the Division concluded that there are no AVFs within the 1,890-acre Study Area <br />Boundary. The Study Area Boundary represents the area of possible surface disturbance. <br />However, the Division requested additional study of the study area with respect to <br />operational details to determine whether AVFs that exist in nearby drainages may be <br />affected by the proposed mine or can be excluded from adjacent areas, as defined in the <br />regulations. <br />This study was performed in response to the Division's request. The study consisted of <br />office review of maps, various photo images, geologic maps, information provided in <br />permit applications from adjacent properties, and review of proposed operational details, <br />specifically for water handling. A site reconnaissance inspection was performed on April <br />10, 2007 in the study area and the larger creeks adjacent to the property. The report was <br />revised after receiving comments from the Division on the mine permit application and <br />after receiving new information concerning likely mine discharge rates. <br />Alluvial Valley Floor Determination <br />Study Area <br />The study area consists of a series of intermittent streams that drain the higher <br />topographic areas to the north. The drainages are narrow, steep, and incised into the <br />Mancos Shale Formation. There is little, if any, alluvium within the drainages. The <br />drainages are hydrologically isolated from higher gravel capped terraces or remnant <br />alluvial fans by the deep erosional incision with topographic relief of up to 100 vertical <br />feet (Photos 1 and 2). Monitoring wells drilled at various locations throughout the study <br />• area did not encounter ground water except at two locations where ground water was <br />ERO Resources Corp. Page 2 <br />AVF Determination - Red Cliff Mine 611912008