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Phase 3 Release Criteria and Results <br />Phase 3 bond release of coal mine is based on the following Colorado Division of <br />Reclamation, Mining, and Safety criteria: <br />Rule 3.03.1(2)(c) <br />The remaining portion of the bond amount shall be released when the permittee has <br />successfully completed all surface coal mining reclamation operations in accordance with this <br />approved reclamation plan, and the final inspection and procedures of 3.03.2 have been <br />satisfied. This shall not be done before the expiration of the period for revegetation <br />responsibility in 3.02.3. <br />In order to meet this rule, Western Fuels must demonstrate successful revegetation of the <br />release area (meeting of cover and production standards) and that post-mine conditions satisfy <br />the requirements of Rule 4.05.13 - Surface and Ground Water Monitoring. <br />The 2007-2008 Vegetation Studies for Phase 3 Bond Release: First and Second Year <br />Analysis - Irrigated Pasture and Dryland Pasture report by 1310-Logic Environmental in <br />Appendix B show the cover and production values for both Irrigated and Dryland Pasture. <br />In order to have a valid comparison between the reference area and reclaimed areas of <br />Irrigated Pasture, a soil correction factor must be applied as determined in TR-58. <br />Soil Correction Table <br /> Soil Unit Acres Factor' Acres x <br />Factor Average <br />Factor' Adjusted <br />Avg. <br />Factor3 <br />IP 10 34.5 1 34.5 <br /> 77 49.6 0.8 39.6 <br /> 78 23.3 0.7 16.3 <br /> 81 18.7 1 18.7 <br />Total 126.1 109.2 0.866 0.847 <br />'Production Factor from TR-58 <br />'(Total Acres x Factor)/(Total Acres) <br />3(Average Factor)/1.022, the IP Reference Area Average Factor <br />1). Post-mine Revegetation Success <br />In order to satisfy the vegetation portion of Phase 3 reclamation, the vegetation in all areas <br />must meet or exceed 90% of the reference area cover and production for two out of four <br />27