2009-02-23_PERMIT FILE - X200921208 (3)

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Water Resources The town of Paonia, situated about 11 miles west of the exploration area, averages around 15 inches of precipitation annually. Given that precipitation increases as elevation increases, the annual precipitation of the Dry Fork and Lions Mesa areas would be expected to be somewhat higher. An estimated 75% of the annual precipitation occurs during late winter and early spring, mostly as snowfall. June, July, and August are often the driest months. The East Fork of Minnesota Creek and the North Fork of the Gunnison River are the principal drainage systems in the area, flowing east to west both north and south of the application area. The exploration area is drained primarily by Deep Creek, which flows northward into Ravens Gulch and by intermittent streams that comprise the Dry Fork of Minnesota Creek drainage, which in turn flows west, and southward into Minnesota Creek. Minnesota Creek joins the North Fork of the Gunnison River at the town of Paonia. The Rollins Sandstone Member is located beneath the Lower Coal Member of the Mesa Verde Formation. The Rollins Sandstone, a massive marine sandstone, has been identified in literature as a potential regional aquifer. Recent monitoring well data and analytical data, however, indicates a low potential for aquifer characteristics in the exploration area. Localized perched ground water aquifers within the sandstone lenses of the Upper Coal Member and the Barren Member of the Mesa Verde Formation. Evaluation of water inflows encountered at the West Elk Mine, operated by Mountain Coal Company, indicate that significant amounts of non-tributary water can be held within and transported through fault zones in the Mesa Verde Group including the Rollins Sandstone. Faults intercepted during mining of the B-Seam at the West Elk Mine have encountered substantial inflows and in all instances the flows have quickly diminished and stabilized to a minimal amount. The proposed exploration drilling is not expected to encounter any water bearing fault zones. Vegetation Montane meadow, aspen, mountain shrub, and coniferous forest habitat types with drainage's containing riparian corridors characterize vegetation in the exploration area. Of these habitat types, aspen is the most abundant, followed by coniferous forest, montane meadow, mountain shrub, and riparian respectively. Various grasses and other mountain shrubs occur sporadically throughout the exploration area. No threatened, endangered, or candidate plant species have been identified in the exploration area. Soils Soils in the exploration area are mainly derived from the Mesa Verde and Wasatch Formations and have relatively high clay content. By limiting the size of drill sites and retaining topsoil for reclamation purposes, revegetation should not be a problem in this area. The revegetation of previous drill sites has been very successful within this and adjacent exploration areas. • 4