2011-04-06_PERMIT FILE - X201123102

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The coal seams in the project area occur within a localized structural basin, with the axis both trending and plunging to the north. It is defined by the Tow Creek Anticline on the east the Sage Creek Anticline on the west. The Fish Creek Anticline and Washakie Syncline trend northwest through the project area. Dips range from approximately 9° along the east flank of the Sage Creek Anticline, to 15 - 20° to the north. Faulting associated with the Tow Creek Anticline has been identified within the area by U.S. Geological Survey geologists. Other faulting in the area is likely, but not well understood, and better definition of the occurrence and extent of faulting is one of the primary objectives of the proposed exploration program. Surface Water Resources: The project area is bounded on the north and northwest by Sage Creek, and to the east and southeast by Grassy Creek, perennial tributaries to the Yampa River. The drainage areas that flow northwest toward Sage Creek are characterized by ephemeral flows, typically flowing only in response to spring snowmelt and summer precipitation. Subwatersheds that drain eastward to Grassy Creek include Scotchman's Gulch and Annand's Draw and are characterized by ephemeral or intermittent streamflows. The proposed exploration drilling will be conducted so as not to adversely impact any of the potentially affected drainages. Seneca Coal Company, as part of its Seneca II Mine and Yoast Mine operations, evaluated Grassy Creek, Scotchman's Gulch, Annand's Draw and Sage Creek for Alluvial Valley Floors (AVFs). The AVF evaluations were conducted in accordance with Colorado program AVF guidelines; the CDRMS determined there were no AVFs along Grassy Creek, Scotchman's Gulch and Annand's Draw within the exploration area. There are several small fields along Sage Creek that meet the AVF criteria, but they are all upstream of the project area. BLM, as part of the Coal Suitability Review for the Little Snake Resource Management Plan, evaluated lands with federal coal to determine if mining would interrupt, discontinue or preclude farming operations. The BLM did not identify any AVFs in the project area. Ground Water Resources: Groundwater occurrence within the project area is generally limited to the Trout Creek and Twentymile sandstone units and the shallow alluvial/colluvial aquifers associated with some of the drainages. Localized groundwater occurrences are also associated with laterally discontinuous, very fine- to fine-grained sandstones, siltstones, and coal beds, which typically have low storativity and are characterized by variable water yields. Groundwater recharge to the shallow alluvial aquifer occurs as infiltration of precipitation and snowmelt and seepage losses from streams, while recharge to bedrock aquifers occurs primarily in outcrop areas in the southern and eastern portions of the project area and along the axis of the Sage Creek Anticline. Groundwater movement is generally downdip to the north-northeast. The proposed exploration activities will avoid area drainage channels, and so will not affect alluvial/colluvial aquifers. Since the proposed exploration drilling will not extend into the Trout Creek Sandstone, it will not be affected, and the only bedrock aquifer that will be penetrated will be the Twentymile Sandstone. Soils: Soils within the project area are typical of soils found in the cold, semi-arid region of western Colorado and are formed primarily from weathered interbedded sandstone, siltstone, and shale, as well as local colluvium, slopewash, and streamlain alluvium. The dominant soils are Argiustolla, Haplocryolls, and Paleocryolls associations, and are described as "cool, PSCM 2 011 NO] 9 April 2010