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0XIBOW MINING, LLC <br />3737 Hwy 133 P.O. Box 535 Somerset, Colorado 81434 USA Tel (970)929-5122 Fax <br />(970)929-5177 <br />January 18 2010 <br />Mr. Jason Musick <br />Environmental Protection Specialist JAN 2 i Zulu <br />Colorado Division of Reclamation, Mining and Safety Uwision °r J4 <br />1313 Sherman Street, Room 215 °nDenver, Colorado 80203 <br />Re: NOI X-2006-223-07, Exploration Project Update, Oxbow Mining, LLC. <br />Dear Mr. Musick, <br />The purpose of this letter is to provide an update to the subject 2006 NOI. <br />Approved Program Update <br />1. ECM-05-19 - During 2006, the pad was built, borehole pre-collared and drilled to <br />corepoint. A preliminary borehole completion report was sent in March 2007. While <br />drilling was expected to be completed during 2007 a core drill capable of pulling core <br />from depth never became available. This borehole was completed in 2009. The borehole <br />was sealed and the site reclaimed and seeded in 2009. A completion report is attached <br />herein <br />2. ECM-05-23 - During the 2006, the pad was constructed but the borehole not drilled due <br />to weather. An initial borehole completion report was provided in March 2007. Drilling <br />was expected to be completed during 2007 but no rig capable of pulling core at depth was <br />available. This borehole was finally completed in 2009. The borehole was sealed and the <br />site partially regraded, reclaimed and seeded in 2009. The site and access road is now <br />incorporated into a gob vent borehole (gvb) road that goes through this area and sites <br />beyond. The remainder of the pad and road will be reclaimed with the GVB projects. A <br />completion report is attached herein. <br />3. ECM-05-34 - This site was successfully drilled during 2009. The borehole was sealed <br />and the site partially reclaimed and seeded in 2009. A completion report is attached <br />herein. <br />4. ECM-05-35 - No activity has occurred on this site. We anticipate no drilling on this <br />location. <br />5. ECM-06-30 and ECM-05-24 - Oxbow failed to successfully complete these boreholes <br />due, primarily, to adverse geologic conditions. The Federal coal license expired on May <br />18, 2008. Both sites have received interim reclamation to reduce some slopes, and <br />installation of straw matting, straw wattles and interim seeding was completed to control <br />erosion. These two borehole sites and temporary roads are located in the proposed <br />Colorado Roadless Area refered to as "Pilot Knob". These sites were located in the <br />0 Page 1