2009-04-20_REPORT - C1980006 (3)

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Marr Mine and Loadout April 15, 2009 2008 Reclamation Report Two more rock dams, rip-rap being keyed in across the ditch, were installed in the entrance road ditch directly west of the shop facilities area. 7.0 TOPSOIL STOCKPILES Pursuant to reclamation of Ponds C & G in 2006, the respective topsoil piles for Ponds C and G were used to reclaim those ponds (2.74 acres). 8.0 SURFACE FACILITIES During 2002, Kerr coordinated with the DRMS, BLM, and OSMRE to identify, plug, seal, and reclaim a number of old exploration boreholes and alluvial monitoring wells, primarily in the Kerr North Lease Area north of County Road 12E. This work was completed in October 2002. During October, 2008, sealing, reclamation & reseeding of the monitor well sites was completed in the mine area. The monitor wells reclaimed were: 79-1; 79-2; 79-3; 79-61 and AO-2A. The exception was the spoils well, Spoil Well SP-01, which was converted to a stock watering well at the request of the land owner. The conversion was approved by the DRMS & the Colorado Water Division. The Office of the State Engineer assigned Well Permit Number 232027 to the well. 9.0 LOADOUT AREA Final reclamation activities were completed for the Loadout Area (approximately 7 acres) during 1999. The Loadout Area was re-seeded in October 2000 and good growth was evident during the Phase 1 bond release inspection conducted in May 2001. During the fall of 2007, willows were removed from the Tipple pond's emergency spillway and the road ditch along the entrance road was regraded and cleaned. During 2008, water monitoring continued at the site as required by the approved water monitoring schedule. 11.0 GRAZING Typically, Kerr obtained prior approval from DRMS for grazing programs. In 2003 and 2004, 500 head of cattle were grazed on the mine land. In 2005 and 2006, the grazing schedule was modified due to the year 9 and 10 vegetation study being conducted in the area so there was no grazing on the Mine area during those years. During 2007, given the anticipation of a bond release inspection for the site, Kerr did not schedule grazing so as to not impair the vegetation status. 12.0 REVEGETATION SUCCESS EVALUATION Revegetation success sampling was completed in 1999 on the pre-1986, 1995, and 1996 reseeded areas. The results of this sampling are contained in a report prepared by ESCO Associates Inc. dated February 2000. This evaluation included cover, annual production, shrub density and species diversity/composition. Based on the sampling results, revegetation in these areas satisfies the applicable revegetation success standards except for cover or shrub density in the pre-1986 reclamation area. Kerr conducted managed grazing operations on reclaimed areas and subsequently completed year 9 revegetation success monitoring in 2005 and year 10 in 2006. Results of the studies show that success has been achieved on those areas that qualify for the Ten Year Reclamation Liability Period. Copies of the studies, "Kerr Coal Company Revegetation Monitoring Report (2005 & 2006)" are on file with the DRMS. 5