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New Horizon Mine: 2007 Vegetation Sampling for Phase 2 Bond Release <br />• 1.0 PURPOSE <br />Western Fuels Colorado, LLC (WFC) seeks Phase 2 and Phase 3 bond release on various <br />portions of its New Horizon Mine (NH-2) reclaimed coal mine lands near Nucla, Colorado (see <br />Figure 1), under the terms of a permit issued by the State of Colorado, Division of Reclamation, <br />Mining, and Safety (CDRMS). The reclaimed lands consist of lands with a designated post- <br />mine land use of irrigate pasture, irrigated swale, and dryland pasture. Under the terms of the <br />NH-2 permit and CDRMS regulations, WFC must demonstrate to CDMRS that vegetation <br />established by WFC on the reclaimed lands meets specific standards in order for bond release <br />to occur. In June 2007, BIO-Logic Environmental (BIO-Logic) conducted vegetation studies on <br />NH-2 reclaimed lands and nearby reference areas, in support of Phase 2 and Phase 3 bond <br />release. This report presents an analysis of the vegetation data for purposes of demonstrating <br />adequacy of revegetation for Phase 2 bond release, and also discusses procedures for Phase 3 <br />bond release in order to assess the likelihood that current Phase 2 irrigated pasture reclaimed <br />lands will meet Phase 3 bond release requirements in the future. A separate report was <br />prepared for analysis of current Phase 3 bond release areas. <br />Phase 2 Bond Release <br />Portions of NH-2 reclaimed lands eligible for Phase 2 bond release are shown on Figure 1. For <br />Phase 2 (interim) bond release on both irrigated pasture (including irrigated swale) and dryland <br />pasture, a vegetation cover (see definitions below) requirement must be demonstrated, based <br />on calculations that incorporate other geotechnical data. In this report we provide our cover <br />measurements for Phase 2 area reclaimed lands, for use by Lewicki & Associates to analyze <br />• the Phase 2 cover data to determine adequacy for bond release. We also measured production <br />(see definitions below) on irrigated pasture Phase 2 lands at the request of WFC. Although <br />production data are not required to demonstrate Phase 2 bond release, WFC wants to compare <br />current production at irrigated pasture Phase 2 reclaimed lands with anewly-established <br />irrigated pasture reference area. As such, we present production data for irrigated pasture <br />Phase 2 reclaimed lands, and compare production and cover data to values measured at the <br />irrigated pasture reference area. <br />Definitions <br />Cover. CDRMS regulations allow cover to be defined as either canopy or basal cover of living <br />herbaceous or herbaceous and woody vegetation. For this study we use canopy cover of living <br />herbaceous and woody vegetation. For cover measurements on reclaimed lands, CDRMS <br />regulations allow the inclusion of annual grasses and forbs up to 10% of total cover, and cover <br />of annuals over 10% of total cover is allowed up to the amount of total cover of annuals <br />measured at the reference area. <br />Production. CDRMS regulations define production (on pasture, rangeland, and for forage <br />crops such as hay) as current year above-ground biomass of herbaceous vegetation. <br />Standard. CDRMS regulations (for Phase 3 bond release) and the NH-2 permit specify the <br />standard for cover and production as the mean value for the reference area. Revegetation is <br />considered "successful" for the parameter in question if the mean value for the reclaimed area is <br />demonstrated to equal or exceed "Q" (Q-90% of the standard), at the 90% confidence level. <br /> <br />BIO-Logic Environmental 4 <br />November 12, 2007 <br />