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Hohne Roberts & Owen LLP® <br />Attorneys at Law <br />Mr. David Berry <br />November 12, 2010 <br />Page 2 <br />A. Development of Alternative Land Use <br />Section 3.02.3 of the Regulations provides as follows: <br />For lands with approved industrial or commercial, or residential <br />post mining land use, the minimum period of liability shall <br />continue until the permittee demonstrates that development of <br />such land use has substantially commenced and is likely to be <br />achieved, and until compliance with the revegetation <br />requirement of 4.15.10(2) or alternative requirements of <br />4.15.10(3) is demonstrated." <br />Neither the Regulations nor the Reclamation Act define or otherwise provide <br />guidance as to the meaning of "substantially commenced" or "development of <br />such land use." When read in context with the rest of the Regulations, we <br />believe this rule contemplates developing land to the point at which it is <br />capable of supporting a particular land use, not construction or project <br />development. <br />(i) Substantially Commenced As you are aware, the Carbon Junction Mine is <br />part of a much larger parcel of land owned by Oakridge, consisting of <br />approximately 1898 acres. Of this 1898 acres, approximately 164 acres is <br />included in the coal permit. Pursuant to state law, Oakridge has established a <br />35 acre parcel subdivision on -its 1898 acre parcel, including the permit lands. <br />Oakridge has planned for infrastructure development and access to the <br />subdivision property, as evidenced by a Letter of Intent entered into with La <br />Plata County, dated January 25, 2010, providing for the construction of <br />connector roads from state highways into the Oakridge property. Oakridge has <br />further readied the permit lands for residential land use by building and formal <br />dedication to La Plata County of recreation trails across the subdivision <br />property. Oakridge spent approximately $110,000 on the development of the <br />subdivision, including approximately $95,000 in engineering and surveying <br />fees, and approximately $14,000 in legal fees. <br />#1502381 v3 den <br />