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dr DESERADO MINE <br />BLUE MOUNTAIN ENERGY <br />3607 County Rd. 65 <br />Rangely, CO 81648 <br />(970)675-4300 <br />fax (970)675-4399 <br />May 26, 2011 <br />Mr. Jim Stark <br />Division of Reclamation, Mining and Safety <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />RE: Permit Revision 7 (PR-07 <br />Deserado Mine - Permit No. C-1981-018 <br />Response to questions and comments <br />Dear Jim: <br />I'V <br />ftFCF ?? <br />MAY 7 n11 <br />Division <br />Mining p1a d Safely n, <br />The following is our response to the questions and comments from your April 21" letter. Itemized <br />responses corresponds to the itemized questions and comments found within the review. <br />1. It is correct that we have identified numerous areas of longwall panels as "possible mining <br />development" that are not currently or presently proposed for permit approval to mine. This fact <br />is clearly identified immediately under the "possible mining development" within the legend by <br />the statement "(not currently permitted)". We are well aware that these areas are not currently <br />permitted to be mined and that is why we have identified them as such. We could have not shown <br />these areas and provided a mine layout with little sense of reality but chose to be open and <br />forthcoming in our intentions for future development. Therefore, these areas are shown and <br />represent areas we expect to include in future permitting actions once proper Federal Coal Leases <br />area obtained. <br />The Division also questions as to how we ensure that these areas outside of our federal coal leases <br />are not mined. It is as simple as to not mine them until proper authority is received through a <br />Federal Coal Lease and subsequent State permit revision. We are well aware of these <br />requirements as we have been working within this regulatory framework for over thirty years. <br />As has been common in mining for over a hundred years we frequently survey our mining <br />progress. We maintain close tolerances of our engineered mine development to ensure proper <br />designs are followed and structural integrity is maintained. Without accurate surveying we would <br />not be able to efficiently maintain a longwall mining operation or intersect workings from the <br />surface with our nitrogen injection holes. It is this same surveying that enables us to properly <br />quantify coal extraction per lease to the BLM and meet detailed mapping requirements for MSHA. <br />Extensive oversight is already in place by these federal agencies to ensure accurate surveying is <br />undertaken and the BLM frequently monitors progress to verify that we mine only within <br />approved lease areas. <br />As to the request for a timetable for acquiring federal leases, we intend to acquire the appropriate <br />leases well ahead of the schedule provided on the revised Map 120. However, we cannot dictate