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encountered in any drill hole during this program at a level above or in the Menefee
<br />seams. All wells in this unit were dry in the Cliff House formation. The nearest
<br />water wells completed in this unit or the two units described below are as follows:
<br />W-1 (# 186332) -Ted Compton; .17 miles south of permit boundary
<br />W-3 (# 199059) -Gary Etheridge; .43 miles south of permit boundary
<br />W-9 (#077395) -Curtis Beyer; .42 miles south of permit boundary
<br />MENEFEE FORMATION
<br />The upper part of this formation contains the coal seam being mined at the
<br />King I Mine. Fifty years of mining has not encountered any ground water in this
<br />formation. Well Number 1, which is drilled in and draws water from the Quaternary
<br />alluvium, has a static water level 76 feet below ground level. Ground level at that
<br />point is at an elevation of 7,390 feet above sea level. The coal seam being mined is
<br />at an elevation of 7,450 feet. Thus, the mine will be located at least 136 feet above
<br />the potentiometric level. There is no indication that the aquifer will be affected by
<br />the King I Mine.
<br />An exploratory core drill hole located in the SE / 4 NW / 4 of Section 32 (See
<br />Map King I-005) was driven from the surface through all the overburden strata to
<br />the base of the currently mined upper Menefee coal seam. No water was
<br />encountered. A well core hole was driven in 1978 on the mine bench near the water
<br />tank to a depth of ninety feet. The well was dry. The collar of the well is below the
<br />upper Menefee seam outcrop. These two holes along with the previously mentioned
<br />active water wells indicate that the overburden strata, and strata at least to a depth
<br />of twenty-feet below the lower Menefee coal seam contain no aquifers.
<br />The best evidence is, however, of no disturbed aquifers or no aquifers and no
<br />ground water seepage in the mine workings themselves, except for the
<br />aforementioned Aperched@ aquifers. Water must be pumped into the mine from
<br />Wells # 1 and # 2 for dust and fire control. This is a normal need for operating coal
<br />mines. Intake water used inside the mine is typically not pumped out or discharged.
<br />POINT LOOKOUT SANDSTONE
<br />The Point Lookout Sandstone is below the formation to be mined and will not
<br />be disturbed during the mining process. The upper 100 to 140 feet is massive
<br />sandstone which may or may not contain significant amounts of ground water.
<br />Wells have recently been drilled into this unit for new real estate developments
<br />(Rafter J.) approximately eight miles east of the project area. Small amounts (max.
<br />pump rate of 30 gpm) of water were encountered in some locations.
<br />WATER QUALITY
<br />A search of the records of the Colorado Division of Water Resources and
<br />personal observations of Fred M. Johnson, Certified Professional Geologist, indicate
<br />that quality of water in the massive sandstone member of the Point Lookout
<br />Sandstone is good.
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<br />National King Coal, LLC King I Mine
<br />Section 2.04.7
<br />Page 3 February, 2007
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