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SAGE CREEK PROJECT 2009 EXPLORATION PROGRAM State Board of Land Commissioners Exploration Permit Application/Amendment SUPPLEMENTAL INFORMATION 3) Basis of Rights to Enter for Exploration and Reclamation Table 1, Sage Creek Project - 2009 Exploration Program Drillhole Location and Ownership, summarizes corehole/drillhole locations and surface and coal ownership at the 15 sites and geotechnical study area that Sage Creek Holdings, LLC plans to drill as part of the 2009 Exploration Program. Map 1, Sage Creek 2009 Exploration Program, a 1-inch = 3,000-foot scale map, shows the exploration locations. MaplA, Sage Creek 2009 Exploration Program Geotechnical Study Area, a I-inch = 3,000-foot scale map, shows the proposed geotechnical study area with an inset displaying the 2009 exploration drill-sites. All of the proposed drill-sites are on lands where surface access and use are allowed under surface use agreements with the surface landowner; the right to explore and prospect for coal is granted through existing leases and licenses. Right-of entry agreements are found in Appendix A. 4) Description of Land to be Affected The proposed exploration area of approximately 600 acres encompasses portions of Sections 3, 4, 5, 10, 15 and 22, Township 5 North, Range 87 West, and portions of Sections 32 and 33, Township 6 North, Range 87 West, of the 6 h P.M., all in Routt County, Colorado (Appendix B presents the legal description of the proposed exploration program). The area is located approximately five miles southeast of Hayden, Colorado. The proposed exploration locations are generally in areas previously disturbed by historic exploration activities or agricultural operations, and have been located adjacent to existing county roads, existing graveled coal haulage roads or 0 unimproved ranch roads, where feasible. Cultural resource inventories have been completed for the proposed drill-sites and the geotechnical study area. The archeological/ cultural resource documentation is presented in Appendix C. Colorado Division of Wildlife (CDOW), in partnership with federal land management agencies, recently implemented a conservation plan for the greater-sage grouse (Colorado Greater-sage-grouse Conservation Plan, CDOW, 2008). The plan recommends a 0.6 mile breeding season buffer for Greater sage-grouse and a 0.4 mile breeding season buffer for Columbian sharp-tailed grouse. Exploration site ccu046 is within 0.6 miles of an active sage-grouse lek. Exploration sites ccu038, 039, 043, 044, and 048 are within 0.4 miles of an active sharp- tailed grouse lek. To minimize short-term impacts, Sage Creek Holdings, LLC (Sage Creek) will schedule the exploration activities at these six sites and the geotechnical study area outside the nesting season which takes place during May and June. Sage Creek has consulted with the CDOW regarding potential impacts to grouse habitat in the exploration program area. CDOW biologists surveyed the 15 proposed drill sites in November 2008. CDOW does not anticipate any unacceptable impacts to grouse lek sites and or breeding habitat as a result of the exploration activities. However, CDOW has recommended an appropriate season for activities at each exploration site to minimize potential impacts to grouse. Exploration sites ccu034, 035, 036, 037 and 040 are located in marginal or non-grouse habitat and can be drilled at any time of the year. The remaining 10 sites occur within grouse habitat and drilling activity at these sites should abide by the nesting and breeding seasonal stipulation (May 1 to July 1). Two sites, ccu038 and 043 were identified as being particularly suited for winter drilling (January 1 to March 15). The CDOW wildlife consultation for this exploration program is provided in Appendix C. Geotechnical work will be completed outside the nesting season (July 0 to October 31"), away from lek and nesting sites (refer to wildlife Map 3), areas not identified as grouse habitat (adjacent to CCU036 - a site with no timing restrictions). Sage Creek Project 2009 NOI 0410 09