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New Horizon Mine: 2007 Vegetation Sampling for Phase 2 Bond Release <br />• SUMMARY <br />Western Fuels Colorado, LLC (WFC) seeks Phase 2 and Phase 3 bond release on reclaimed <br />Irrigated Pasture and Dryland Pasture of its New Horizon Mine (NH-2) near Nucla, Colorado <br />under the terms of a permit issued by the State of Colorado, Division of Reclamation, Mining, <br />and Safety (CDRMS). WFC must demonstrate to CDMRS that vegetation established by WFC <br />on the reclaimed lands meets specific standards for bond release. In June 2007, BIO-Logic <br />Environmental (BIO-Logic) conducted vegetation studies on NH-2 reclaimed lands and nearby <br />reference areas, in support of Phase 2 and Phase 3 bond release. This report presents an <br />analysis of the vegetation data for purposes of demonstrating adequacy of revegetation for <br />Phase 2 bond release, and also discusses procedures for Phase 3 bond release in order to <br />assess the likelihood that current Phase 2 irrigated pasture reclaimed lands will meet Phase 3 <br />bond release requirements in the future. <br />Cover data are presented that will be used by Lewicki & Associates to determine Phase 2 bond <br />release on approximately 240.0 acres of Irrigated Pasture (including Irrigated Swale) and 59.4 <br />acres of Dryland Pasture. <br />WFC also requested that production measurements be taken on Phase 2-eligible lands, and <br />that cover and production be compared to Irrigate Pasture and Dryland Pasture reference area <br />data, to examine the likelihood that Phase 2 reclaimed lands will beet Phase 3 bond release <br />requirements in the future. For Irrigated Pasture reclaimed lands currently eligible for Phase 2 <br />only, mean values for cover and production in 2007 exceeded mean values in the new Irrigated <br />Pasture reference area. Because cover and production are not likely to decline in the next few <br />• years on irrigated reclaimed lands, these lands are likely to meet Phase 3 bond release <br />requirements for cover and production in the future. <br />For Dryland Pasture reclaimed lands currently eligible for Phase 2 only, mean values for cover <br />and production in 2007 also exceed mean values in the Dryland Pasture reference area. Cover <br />and production may decline on reclaimed lands in the next few years as alfalfa declines. <br />Changes in cover and production will likely be influenced by climate variations, particularly the <br />timing and amount of precipitation. <br />• <br />BIO-Logic Environmental 3 <br />November 12, 2007 <br />