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Phase 2 Release Criteria and Results <br />Phase 2 bond release of coal mine is based on the following Colorado Division of <br />Reclamation, Mining, and Safety criteria: <br />Rule 3.03.1(2) (b) <br />Up to eighty-five percent of the applicable bond amount shall be released upon the <br />establishment of vegetation which supports the approved land use and which meets the <br />approved success standard for cover, pursuant to 4.15.8, meets applicable productivity <br />standards for prime farmlands or alluvial valley floors pursuant to 3.03.1(3)(b), or <br />croplands pursuant to 4.15.9. With the exception of prime farmlands, evaluation of <br />vegetation establishment pursuant to this paragraph is based on statistically valid data <br />collected during a single year of liability period; <br />The 2007 Vegetation Sampling for Phase 2 Bond Release: Irrigated Pasture and <br />Dryland Pasture report by 1310-Logic Environmental in Appendix B demonstrates that <br />both the Irrigated Pasture and Dryland Pasture areas meet the requirements of the above <br />rule. <br />For vegetation cover, Rule 4.15.8(3)(a) requires: "...demonstrate that the revegetated <br />area cover is not less than 90 percent of the reference area cover or 90 percent of the <br />approved standard...". New Horizon Mine's reclamation plan requires the irrigated <br />pasture to meet a technical standard of 72.8%, and compares the dryland pasture to a <br />reference area. <br />According to the BIO-Logic report, Irrigated Pasture reclaimed area vegetation cover is <br />85.3%. The technical standard required by DRMS is 72.8%. Thus the irrigated pasture <br />reclaimed area vegetation is successful, since it is greater than 90% of the technical <br />standard, as required by Rule 4.15.8(3)(a). <br />The BIO-Logic report shows vegetation cover in the dryland pasture reclaimed area is <br />35.2%, and vegetation cover in the dryland pasture reference area is 30.0%. This shows <br />successful revegetation of the dryland pasture area, as cover is greater than 90% of the <br />reference area, as Rule 4.15.8(3)(a) requires. <br />Details of the statistical analysis of the revegetation is present in the same BIO-Logic <br />report. <br />14