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Walsh _ <br />Environmental Scientists and Engineers, L L <br />C <br />August 6, 2008 <br />Mr. Ross Gubka <br />Western Fuels Colorado LLC <br />Box 628 <br />Nucla Colorado 81424 <br />Subject: REVISED Subsoil Suitability Study <br />New Horizon Mine <br />Walsh Project No. 7873-010 <br />Dear Mr. Gubka: <br />Walsh Environmental Scientists & Engineers, LLC (Walsh) has performed a limited soil investigation <br />and inspections of operations at the New Horizon Mine in Nucla, Colorado, Work was conducted <br />under contract to Western Fuels - Colorado LLC (WFC). This letter describes investigation <br />techniques, results, and their implication to mine operations and is a revision of the original soil <br />investigation dated March 20, 2008. Revisions are based on comments received from the Division of <br />Reclamation, Mining, and Safety (DRMS) in a letter dated May 28 2008. <br />Background <br />The New Horizon Mine mines coal under a DRMS permit. The permit defines soil handling <br />procedures that have been followed by WFC. Prior to February 2008, the permit did not recognize any <br />soil within the permit boundary as being "prime farmland" as defined in the DRMS regulations and by <br />the National Resource Conservation Service (NRCS). Soil handling was consistent with the permit <br />and the NRCS ruling prior to permit issuance that there were no prime farmland soils within the permit <br />area. In February 2008, the NRCS determined that some of the soil within the permit boundary <br />qualified as prime farmland. Some of that prime farmland had been mined and reclaimed, some had <br />been mined but had not yet been fully reclaimed, and some of the material has not yet been mined. <br />WFC has chosen to take steps to ensure that the unreclaimed mined area that has been reclassified as <br />prime farmland is replaced with soil and subsoil that is suitable to restore prime farmland <br />characteristics. <br />Mining Operations <br />Coal is mined by stripping topsoil in one or two lifts, mechanically stripping subsoil and weathered <br />Dakota Formation bedrock overburden, blasting remaining bedrock overburden, and mining coal. The <br />mining pit is backfilled first with the interburden and blasted overburden followed by placement of the <br />weathered bedrock overburden, and finally the soil lift(s). <br />The working face of the mine reveals 10 to 30 feet of weathered sandstone and shale bedrock that has <br />decomposed and is mostly friable (see photos). This material is called "Bench 1" or "overburden unit <br />1" material in the permit and by WFC. It grades imperceptibly into the overlying soil, and contains <br />Western Slope Division: <br />535 Grand Avenue . Grand ]unction, Colorado 81501-2790 . Phone (970) 2414636 . FAX (970) 241-4312 . walshenv.com <br />Corporate Office: <br />4888 Pearl East Circle, Suite 108 . Boulder, Colorado 80301-2475 . Phone (303) 443-3282 . FAX (303) 443-0367 <br />n