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Oxbow does not propose any additional surface disturbance in the lease modification area. The <br />purpose of the modification is to enhance the safety of the mine and improved ground control by <br />providing for the development of north mains that are located perpendicular to the gateroads. <br />Other than the potential for very minimal subsidence, Oxbow proposes no surface activities on <br />the lease modification area. <br />789.79 Acre Lease by Application COC -70615 <br />The COC -70615 LBA was submitted to the BLM in September 2006. The BLM has spent a <br />number of tortuous years preparing the EA for the lease. On June 7, 2011, the BLM published a <br />final Decision Record to offer the lease for sale. On July 8, 2011 WildEarth guardians and Sierra <br />Club served a Notice of Appeal and Petition for Stay challenging the BLM's Decision Record. <br />The outcome of the appeal is in process but Oxbow anticipates that eventually, the lease sale will <br />move forward, Oxbow will prevail in the lease sale of the bypass coal, and we can incorporate <br />the Lease into the PAP. <br />The 789.79 acre lease area contains only an estimate of 3.96 million tons of coal, enough for <br />only one year of longwall mining The coal lease anticipates a number of drainage boreholes and <br />roads to be permitted with the Division at a later date. <br />Upon the final award of the lease, Oxbow will present a copy of the executed lease document for <br />inclusion into the PAP. <br />Rule 2.05.6(6)(a) Considerations — Structures and Renewable Resources Lands. <br />The proposed permit area addition contains no structures and renewable resource lands. <br />Threatened and Endangered Species Assessment, Cultural Resources Assessment <br />A block clearance cultural resources assessment titled "Class III Cultural Resources Inventory of <br />the Block Clearance Area Project" prepared August 26, 2005 by Grand River Institute has <br />previously been submitted to CDRMS. The block clearance area includes this proposed Permit <br />Area addition. Anticipated future mining activities will not effect any areas of concern noted in <br />the cultural resources report. <br />A "Block Biological Clearance Project" prepared in August 2005 by Monarch and Associates <br />covers the project area. Monarch and Associates have continued to conduct annual spring nesting <br />bird surveys as necessary depending on Oxbow's surface disturbance activities, primarily for <br />methane drainage borehole facilities. No issues related to T & E or Sensitive Species have been <br />noted for the proposed permit area addition from the original report, or noted in subsequent <br />clearance activities. <br />A copy of these two block clearance reports have previously been forwarded to the Division and <br />can be found in PAP Exhibit 2.04 -E7. <br />• Page 2 <br />