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PEABODY SAGE CREEK MINING LLC <br />March 4, 2011 <br />Mr. Jason Musick <br />Division of Reclamation, Mining and Safety <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />RE: Reclamation Cost Summary, TR-01 <br />PSCM Comments <br />Mr. Musick, <br />RECO, <br />MAR pg 2011 01 UiviM n,n5 and SOW <br />Peabody Sage Creek Mine (PSCM) has reviewed the "Reclamation Cost Summary" (2/23/2011) that <br />you forwarded to us. During our review, a few discrepancies were noted that we would like to <br />resolve. We believe it is to everyone's benefit to resolve these issues before the next round of bond <br />release applications are submitted. Below are listed the specific task numbers with questions or <br />explanation/clarifications for your consideration. <br />LIABILITY TRANSFERRED FROM SENECA II MINE <br />TASK 91 BRB4 448.25 ac. Phase II released (Acres remaining in Seneca 11 Permit removed) <br />• BRB4 Phase II has not been released - <br />See Phase II Bond Release SL-3, Proposed Decision and Findings of Compliance for the <br />Seneca II Mine, April 1, 2009 <br />- page 5 "Additional adequacy concerns identified during the review of the application were <br />addressed in adequacy letters dated December 22, 2008, and January 2, 2009. <br />During the review, the Division identified deficiencies regarding the demonstration of <br />vegetation cover success in Bond Release Block (BRB) 4. As a result, SCC withdrew <br />the 577.7 acre BRB-4 from the SL-3 application in a letter dated February 27, 2009. " <br />- page 13 `A review of the applicable cover sample data and sample maps conducted by the <br />Division subsequent to the inspection revealed errors regarding the cover sample for <br />BRB-4. Due to the cover sample discrepancies, the Division determined that a <br />statistically valid demonstration of successful vegetation cover establishment was not <br />provided for BRB-4, and as a result SCC withdrew BRB-4 from the bond release <br />application. <br />Corrected Description, Coal Mining Permit, Bond Release Decision, Phase II Bond Release for <br />1213.1 acres (signed by Sandy Brown 417109) - This document reduces the release area from <br />1794 acres to 1213.1 acres <br />Peabody Sage Creek Mine • 29515 CR 27 • Oak Creek, Colorado 80467 <br />Telephone (970) 276-7001