2008-09-22_PERMIT FILE - X200823002 (3)

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For a more thorough but general description of the area and the resources involved please refer to the mining permit application for Permit # C-1981-018 and the Application and Exploration Plan for Federal Coal Exploration License. Item #5 a. One contractor-supplied drilling unit should be sufficient to complete the drilling program within the scheduled time period. A basic drilling unit consists of a Gardner Denver 1500 or 2000 or equivalent air-water combination drill mounted on a tandem axle truck, drill- pipe trailer or truck, auxiliary air compressors and tools, a water truck and supporting pickup truck. The chosen access routes coupled with proposed reclamation will minimize soil erosion. During the time proposed for drilling, there will be little or no surface water in the area. Mud pits will be dug at each location to receive water that may be produced from each hole. The drill hole plugging procedure will prevent pollution of any ground water intercepted. Damage to air quality, wildlife and wildlife habitat are unlikely due to the proposed limited access and short term nature of the exploration program. Hazards to public health and safety are essentially non- existent due to the nature of the equipment and the remote location. Blue Mountain Energy, Inc. will designate a representative that will be assigned to the drilling unit and will be on site during all field operations. Access to the drill sites will be from a combination of existing roads and new overland trails. Approximately 16,060 feet of new trail would be needed for proposed new access (see attached maps). Vegetation will be cleared from the route to minimize the threat of fires when warranted. The drill hole locations will be prepared by removing vegetation and topsoil from the drilling site. Each drill pad will be about 75' by 120' in size. Mud pits to contain drilling fluids will be constructed adjacent to the drill pad. Holes will be drilled with 5-1/4 or 5-5/8 inch diameter bits using air with mist injection and/or water and drilling mud as dictated by hole conditions. Cuttings samples will be obtained and described. Drilling depths will range from a projected 340 to 1700 feet. Total depth of each hole will be below the targeted `B' seam. Detailed down hole geophysical logs will be obtained at each hole. Coring may be conducted at some of the holes. All drill holes will be grout-cemented through coal-bearing strata, with cement extending 50 feet above and below the mineable coal bed. The remainder of the hole will be backfilled with cuttings and mud to ten (10) feet or greater below the surface. The hole will then be grout- cemented to the original ground surface. A 2 to 3 foot length of tubing will be cemented into the top of each hole extending less than 8" above the surface and will serve as the hole monument. Aluminum or brass caps marked with the hole identification number will be cemented into the top of the hole monument. Reclamation of disturbed areas will be initiated and completed shortly following site abandonment. Drill sites will be recontoured and seeded. Seed rates of pounds per live seed per acre for broadcasting are shown in Section 9.2 of the Federal Coal Exploration License application. Access routes that did not previously exist will be scarified and seeded. Water bars will be constructed where necessary. Cuts will be pushed back to approximate original contours and any juniper trees removed during construction scattered over the access route to deter future use.