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<br />KERR COAL COMPANY <br />10390 Bradford Road, Suite 205 <br />Littleton, Colorado 80127-6416 <br />Telephone 303.925.0781 <br />Facsimile 303.904.4989 <br />115 E. Main Street <br />P.O. Box 459 <br />Florence, Colorado 81226 <br />Telephone 719.784.6395 <br />Facsimile 719.784.4352 <br />Rich A. Munson Executive Vice President <br />May 12, 2008 <br />Janet Binns <br />Division of Reclamation, Mining and Safety <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />Re: Kerr Coal Company Permit <br />Permit No. C-1980-006 <br />Dear Ms. Binns: <br />This letter is written to set forth the understanding of Kerr Coal Company ("Kerr") regarding the <br />status of the bond release request submitted by Kerr for the Kerr (Mary) Mine. Reference is <br />made to the release request [SL-04] (the "Request") dated September 6, 2007, for the specific <br />details of the request. <br />We have been in ongoing discussions with the Division regarding the tasks that remain to be <br />completed by Kerr prior to action of the Division on the Request. As we understand the current <br />status of the review process by the Division, there only remains one outstanding reclamation task <br />related to the Request that must be completed by Kerr: sealing and reclamation of the four water <br />monitoring wells located in the Kerr mining area (south of County Road 12 E) and the two wells <br />(one groundwater and one alluvial well) located in Bush Draw. <br />Subsequent to the submittal of the Request, it is our understanding that the Division determined <br />in Technical Revision # 23 that, based on the review of data reported to the Division, there are no <br />outstanding issues regarding groundwater at the site. Accordingly, reclamation of the monitoring <br />wells at this time is appropriate. <br />We understand therefore that the Division will defer its approval of the Request until we <br />complete the sealing and reclamation of the monitoring wells and receive approval of the work <br />from the Division. Based on these understandings, we will proceed to schedule and complete the <br />reclamation of the wells.