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PEABODY SAGE CREEK MINING, LLC <br />April 4, 2011 <br />Mr. Kent Gorham <br />Division of Reclamation, Mining and Safety <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />RE: Notice of Intent to Explore - 2011 Exploration Program <br />Mr. Gorham, <br />'Cove <br />{eclam'Wo• <br />pNtsw" d Salew <br />0161119 an <br />Peabody Sage Creek Mining, LLC (PSCM) is submitting this exploration Notice of Intent to <br />conduct coal exploration activities during 2011/2012 on lands owned or controlled by lease <br />and/or surface and coal agreements by PSCM. PSCM proposes to drill and sample five (5) <br />core holes and rotary drill one (1) additional hole to verify the presence/absence of water in <br />old working on the north end of the project area and three (3) along the Seneca Yoast Mine <br />haul road. <br />The locations of the nine (9) holes are shown on Map 1, 2011 Exploration Program Surface <br />Ownership. Supplemental information is included to further discuss and/or explain the <br />proposed exploration drilling program. The 2011 Exploration Program will provide PSCM <br />with additional geologic and coal quality information needed to assess coal recovery potential <br />and economic feasibility for possible future coal reserves. <br />This NOI submittal duplicates information concurrently provided to the Bureau of Land <br />Management under a Federal Exploration License Application and Exploration/Reclamation <br />Plan and Routt County Board of County Commissioners through an Administrative Permit <br />Application. The proposed exploration locations are generally in areas previously disturbed <br />by historic coal exploration/mining and/or agricultural operations, and have been located <br />adjacent to existing roads where feasible. Cultural resource clearances have been completed <br />in most areas, however additional surveys need to be conducted for CCU070 as soon as <br />ground conditions allow. The results will be forwarded as soon as received and before any <br />drilling on this site takes place. <br />Review of the proposed locations by Colorado Division of Wildlife (CDOW) did not identify <br />any potentially impacted resources requiring avoidance or specific mitigation measures (refer <br />to accompanying documentation). PSCM is waiting on final approvals of the surface access <br />agreements and will forward them as soon as finalized. <br />PSCM would like to begin the 2011 drilling program as early as possible, following receipt of <br />all required permits/approvals; therefore, we would appreciate your consideration and <br />cooperation in facilitating timely review and approval of this submittal. <br />Peabody Sage Creek Mine • 36600 CR 27 • PO Box 250 • Hayden, CO 81639 <br />Telephone (970) 276-7001