2010-03-03_PERMIT FILE - X201023101

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SAGE CREEK PROJECT 2010 EXPLORATION PROGRAM NOTICE-OF-INTENT SUPPLEMENTAL INFORMATION 3) Basis of Rights to Enter for Exploration and Reclamation Table 1, Sage Creek Project - 2010 Exploration Program Drillhole Location and Ownership, summarizes corehole/drillhole locations and surface and coal ownership at the 15 sites Sage Creek Holdings, LLC plans to drill as part of the 2010 Exploration Program. Map 1, PSCM 2010 Exploration Program - Surface Ownership, and Map 2, PSCM 2010 Exploration Program - Coal Ownership, show the exploration locations and ownership. 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, Surface Ownership and Coal Control. 4) Description of Land to be Affected The proposed exploration area of approximately 600 acres encompasses portions of Sections 3, 8, 9, 10, 11, 14, 21 and 22, Township 5 North, Range 87 West, of the 6"' P.M., all in Routt County, Colorado (Appendix B, Legal Description of Proposed Exploration Area, 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 unimproved ranch roads, where feasible. Cultural resource inventories have been completed for the proposed drill-sites. The archeological/ cultural resource documentation is presented in Appendix C, Cultural Resource Investigations. 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. 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 October 2009 and do not anticipate any unacceptable impacts to grouse the 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 as outlined below: Early Season Drilling March 1 to July 1: ccu049, ccu051 Mid Season Drilling July 1 to September 1: ccu050, ccu051, ccu059, ccu060, ccu061 Late Season Drilling September 1 to March 1, 2011: ccu053, ccu057, ccu061 Any Season Drilling: ccu049, ccu052, ccu054, ccu055, ccu056, ccu062, ccu063 The CDOW wildlife consultation for this exploration program is provided in Appendix D, Colorado Division of Wildlife Consultation. Sage Creek Project - 2010 NOI 1 0212412010