2009-03-30_PERMIT FILE - C1981019A

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RULE 2 PERMITS __ __ Colowyo has previously auger mined at the Colowyo Minesite with a limited auger application on the east side of the East Pit under Section 11. This mining targeted the C and E seams, and was successful although the depth of penetration was rather limited (100 -400 feet). See Mine Plan Map (Map No. 23). Description of the Highwall Minim Method Modern Highwall Mining machines (specifically Mining Technologies Inc. - Addcar System) incorporating advanced technologies, should allow Colowyo to obtain for greater penetration depths on each hole than conventional augering methods (1,400 feet plus with optimal conditions) with increased horizontal and vertical guidance ability built into the system. Greater penetration depth is a function of a more robust launch vehicle platform that sits outside controlling all functions of the system, rigid conveyor cars each fitted with its own belt conveyor (cars act similar to drill steels on drilling rigs), and a full sized conventional, remote controlled underground continuous miner performing the mining of each hole. The exact horizontal and vertical controls of the system are a result of video cameras placed on the miner giving real time visuals to the outside operator, a proprietary HORTA Guidance System that gives continuous three dimensional locations, and Gamma Sensors in the miner's cutting head that give the miner the ability to sense roof and floor rock hence keep the miner in the coal seam and avoid out of seam dilution and maintain optimum hole conditions. Depth of penetration, hence coal recovery, for any given hole will vary depending upon multiple considerations, namely coal seam splitting, thinning/pinching of the coal seams, acceptable coal quality parameters, roof and floor integrity, and machine physical limitations. Should the Highwall Miner application prove successful at Colowyo, Colowyo has proposed multiple applications of the system in areas surrounding both the East and West Pits (see Map 23, Mineplan). In the East Pit, all surface mining activities will be completed by year-end 2003. As currently permitted, contemporaneous reclamation activities call for the commencement of backfill and grading activities in the East Pit in compliance with the post mining topography plan. This plan will still be adhered to, but will be timed to coincide with highwall mining activities. In the East Pit, highwall mining is planned to occur in the B, C, D, and E coal seams (see Exhibit 22). Mining activities will commence on the bottom E seam, and then progress sequentially upward through the remaining seams. As a seam is mined out, the pit will be backfilled up to the floor of the next higher seam, with spoil placed by a dragline or from the truck shovel operation. The backfilling of the pit is required to attain conformance with Colowyo's permitted reclamation plan/post-mining topography, and the partially backfilled pit will also serve as a temporary level pit floor to work from to mine the next higher seam. In the West Pit, the northern highwall. mining is planned to occur only in the X seam that underlies the West Pit Parking Lot Area (see Map 23, Mineplan). This area of the pit will be backfilled to the floor of the X seam, with spoil placed by a dragline or from the truck shovel operation. The western highwall mining is planned to occur in the mineable seam(s), but successful mining is dependent upon the extent of individual coal seam burn, coal seam thicknesses, and outcropping. Targeted mineable seams may include X, A, B, C, D, E, and F (see Exhibit 23). Additional exploratory drilling and evaluation will be required to more fully define the mineable seam targets in these areas. Also in the West Pit, the southern highwall mining areas under the old Section 16 Pit may be able to mine the C, D, and E seams. Additional exploratory drilling and evaluation will also be required to more fully define the mineable seam targets in these areas. Rule 2 Permits 2.06-9 Revision Date: 1/06/09 Revision No.: TR-77