2009-01-20_PERMIT FILE - X200923100

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At this time Sage Creek does not anticipate "twinning" any of the drillholes. However, if "twinning" of any drillhole becomes necessary, Sage Creek will not "twin" any drillhole until an application for an amendment to the NOI for "twinning" is submitted to and approved by the CDRMS in accordance with Rules 2.02.2(2)(g) and 3.05.2. Geophysical Logging:: On completion of drilling and core recovery, geophysical logging will be completed for each drillhole to obtain additional geologic information. A truck-mounted geophysical logging unit will be used to obtain, correlate, and store logging information which may include density, gamma, caliper, neutron, focused electric, sonic, verticality, temperature, and conductivity. Sage Creek will retain in its files all drill and geophysical logs for at least one year, and will make them available for inspection by an authorized Division representative. Exploration Maintenance Activities - Other than initial road maintenance to establish good access, it is anticipated that access road maintenance requirements will be minimal, since the majority of the exploration efforts will occur during the dry summer months. Other maintenance requirements will include general housekeeping in active exploration areas and regular inspection and maintenance (as necessary) of drainage structures. Monitoring or Water-Supply Well Completion - At this time Sage Creek does not anticipate converting any exploration holes to monitor wells. If Sage Creek decides to convert an exploration hole to a monitor well authorization will be obtained from the appropriate regulatory authority(s) in compliance with applicable provisions of 43CFR 3484.1(a) and 37-92-602, C.R.S. In addition, the Colorado Division of Water Resources will be notified in accordance with Rule 5.2.31 (2 CCR 402- 2) prior to converting the drill hole to a monitor well. Monitor wells will be constructed in accordance with the Water Well Construction Rules (2 CCR 402-2). In general, monitor well construction will involve placement of steel surface casing, casing the open drill hole with solid steel pipe (0.188-inch minimum wall thickness), placing perforated-slot screen and 8/12 silica sand or a pre-packed, stainless steel or PVC well screen in the desired completion interval, establishing bentonitic plugs above and below the screened interval and grouting the well annulus to prohibit vertical migration and cross-contamination of aquifers. Following construction, the monitor well will be developed by successively flushing and pumping the well bore to remove drilling fluids, drill cutting and other materials introduced into the borehole during the drilling process. Figure 2, Typical Monitoring Well Completion, illustrates typical completion methods. If applicable, a well completion report (Form GWS-31) will be submitted to CDWR in accordance with Rule 14.2.6 (2 CCR 402-2) within 60 days of completing the well. Once the well is no longer needed, it will be plugged and sealed in accordance with the appropriate rules and regulations (Rule 16, 2 CCR 402-2). If Sage Creek permits the Sage Creek project as an underground mine under Regulations of the Mined Land Reclamation Board for Coal Mining, all relevant well permit and completion forms will be included as part of the permit application package. Proposed Reclamation Methods: The proposed exploration program is designed to minimize new surface disturbance by utilizing existing roads and trails to the extent possible, placing drill pads adjacent to existing roads, utilizing previously disturbed areas for drill pads, and limiting pad size. Surface disturbance, and reclamation requirements and costs calculated by Sage Creek are summarized on Table 3, 2009 Exploration Program Reclamation Cost Estimate. Upon approval of the NOI, Sage Creek will file a corporate surety with the Land Mined Reclamation Board to ensure that the reclamation obligations are fulfilled. If CDRMS completes an independent Sags C-kPmj d- ,009 NOI 0//m09 11