2010-12-17_REVISION - C1981019 (110)

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RULE 4 PERFORMANCE STANDARDS The sediments in this area were deposited in a deltaic depositional environment. The geologic beds vary in thickness and lateral extent both horizontally and vertically throughout the CM area. The numerous coal seams in this formation also vary in thickness and lateral extent. The sandstones tend to be very fine grained to fine grained and poorly sorted, with various amounts of silt and clay. For the siltstones and mudstones, theses units contain various amounts of finer and coarser materials. The formation is comprised principally of mudstones, siltstones and coals, with sandstone layers being least prevalent. The Williams Fork Formation conformably overlies the Iles Formation. The Iles Formation is comprised of sandstones, siltstones and marine shales. At the top of the Iles Formation, and immediately below the Williams Fork Formation, is the Trout Creek Sandstone (TCSS). The TCSS is a massive, white to light gray, very fine to fine grained, moderately well sorted sandstone with a thickness of between 50 and 70 feet and is approximately 1,200 to 1,300 feet below the ground surface in the current and proposed mining areas of Colowyo. This is the only mapped and known continuous unit in the area of the CM. This sandstone has been noted as being an excellent marker bed for correlation work with the overlying coal seams. Geologic Structure Two major features, the Collom Syncline (on the north) and the Danforth Hills Anticline/Wilson Dome (to the south), control the primary geologic structure in the area of CM. All of the current and proposed mining areas are located between these structural features. There are two minor synclines on the eastern and western edge of the current and proposed mining areas known as the Elkhorn and Morgan synclines, respectively. (As noted above, this data and associated geologic maps can be found in the recent permit applications to DRMS). The current mining area is located on the south flank of the Collom Syncline. The axis of the Collom Syncline, located approximately 0.5 miles north of the north edge of the reclaimed East Pit, trends west - northwest (approximately N60 °W) with a slight dip in the axis to the west - northwest. The Collom Syncline is sub - parallel to the Axial Anticline to the north and the Danforth Hills Anticline on the south. The Collom Syncline is asymmetrical, with the north flank of the syncline steeply dipping (20 ° -40 °) to the south - southwest. The south flank dips to the north- northeast at around 10 ° ±5 °. Thus, due the geologic structure of the area, the coal seams and non -coal beds dip to the north- northeast at approximately 10 °. The dip of the rock on the eastern portion of the CM is partially controlled by the Elkhorn syncline located east of the CM. Although the rock still has a primary north component there is some dip to the east. In the middle of the South Taylor mining area, a structural high, an unnamed anticline, is present, which is an offshoot of the Danforth Hills anticline. This is associated with a small - unnamed syncline near the valley floor of the West Fork of Good Spring Creek. The anticline causes the rock to dip predominantly to the north and south. The proposed Collom mining area is located in a similar geologic setting as the current Colowyo mining area of the West Pit and the inactive East Pit. Hydrologic Conditions Based on the above discussion, the Colowyo active mining area and associated Colowyo properties are located on a topographic and structural high. This causes any surface or ground water to flow from a south to north direction due to slope and dip of the sediments. Collom — Rule 4, Page 15 Revision Date: 1/23/09 Revision No.: PR -03