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Kerr (Marr) Mine — 2011 Annual Hydrology Report <br />1.0 OPERATIONAL CONDITIONS <br />All but 8 acres remaining at the mine site area, the mine access road (to allow access for the DRMS) <br />and the Loadout site have received final bond release (SL -04) as approved January 5, 2009. To <br />recapitulate, a brief history of operations is presented below. <br />Active mining and coal production operations at the Marr Mine ceased in January 1993. During the <br />active life of the mine, mining operations occurred in three areas; the Marr Pit, 720 Pit, and Pit 1. <br />Mining was completed and most of the associated disturbance in the Marr Pit area was reclaimed <br />during the period from 1979 through 1983. Contemporaneous reclamation occurred as mining <br />progressed and the remainder of the 720 Pit and Pit 1 areas were backfilled and reclaimed during the <br />period from 1993 through 1996. A spoils monitoring well (SP -01) was installed at the north end of the <br />720 Pit area in 2001 and subsequently, was converted to a stock watering well for the landowner. The <br />only ongoing activities for the sites are site maintenance, environmental monitoring, and reclamation <br />permit compliance activities. Kerr Coal Company (Kerr) in cooperation with the Colorado Department of <br />Natural Resources Division of Reclamation, Mining and Safety (DRMS), the United Stated Department <br />of the Interior Bureau of Land Management (BLM) and the Office of Surface Mining, Reclamation and <br />Enforcement (OSMRE) completed a program during 2002 to identify, plug, seal, and reclaim a number <br />of old exploration boreholes and shallow alluvial monitoring wells in the Kerr North Area, aka, North <br />Lease Area located north of County Road 12E. In 2006, Pond C (CDPS #303) and Pond G and their <br />associated soil stockpiles and ditches were reclaimed. Pond F was recommended for permanent <br />status in 2006 and the decision for permanence was approved in 2007. In 2007 (TR -23) Kerr <br />recommended that all surface, groundwater and vegetation monitoring at the mine be revised <br />(terminated) because all the requirements of the permit had been met. Subsiquently,TR -23 was <br />approved and monitoring of water and vegetation at the mine site has ceased. <br />During November, 2011, as previously approved in the Permit Document and with the approval of the <br />Army Corp of Engineers', 404 Permit (Section 24), the former sedimentation pond, aka, Tipple Pond at <br />the Loadout site was drained and backfilled and the topsoil reapplied to the disturbed area. The early <br />winter conditions at that altitude did not allow seeding of the site at that time. Application of the <br />approved seed mix, mulching and crimping of the mulch is scheduled for the spring season (2012) <br />when ground conditions allow. <br />2.0 BOND RELEASE <br />Kerr submitted a bond release request to the DRMS on September 6, 2007. Bond Release Request No. <br />4 (SL -04) requested release of Phases I, II and III of the majority of areas at the mine site as specified <br />in the request. Excluded were two parcels (approximately 4 acres each) located east and south of the <br />shop facilities that were not yet eligible for bond release at that time, due to the timing of the 10 year <br />reclamation liability period and so were not released. <br />Prior to approval of the bond release request, the former water monitoring wells located at the mine site <br />were sealed and reclaimed during October, 2008. The wells are identified as: 79 -1; 79 -2; 79 -3; 79- <br />61 and AO -2A. The Spoil Well, SP -01 (former monitoring well) was converted to a Stock Watering Well <br />at the request of the landowner and approval by the Colorado Water Division and the DRMS. Locations <br />of the wells are shown on Map 1, Mine Area Monitoring Stations. <br />Approval of the bond release (SL -04) became final on January 5, 2009 as approved by the DRMS and <br />with concurrence of the respective agencies, OSM and the BLM. The Loadout Site, south of the town <br />of Walden is eligible for bond release pending reseeding and mulching of the former sedimentation <br />pond (backfilled November, 2011) located at the Loadout and the approval for release by the DRMS. <br />1 <br />