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2011 Phase III Bond Release Evaluation — Year 1 <br />Snowcap Coal Co. <br />1.0 INTRODUCTION <br />1.1 General <br />Cedar Creek Associates, Inc. (Cedar Creek) was contracted in 2011 by Snowcap Coal Company <br />(Snowcap) to evaluate revegetated units for Phase III bond release at Snowcap Mine (a.k.a. Powderhorn <br />Coal Co. — Roadside Mine). Sampling was performed in the interest of ascertaining progress toward <br />revegetation success of on- the - ground revegetation in general accordance with Rule 3.03, Release of <br />Performance Bonds and the approved technical revision, TR -60, to Snowcap's permit. There are 17 <br />individual reclamation units at Snowcap ranging in size from less than an acre to 20.2 acres. In addition <br />to these reclaimed units on the mine permit area, there were 22 smaller sites associated with drilling and <br />exploration that are included in this Phase III evaluation. All revegetated areas evaluated in 2011 were <br />separated into two primary sampling units based on the two reference areas used for comparison, as per <br />TR -60. All areas to be compared to the Greasewood Reference Area (6 units) were treated as a single <br />combined unit and systematically sampled. The same procedure was utilized for all areas to be <br />compared with the Shadscale Reference Area (33 units). Accordingly, the Greasewood and Shadscale <br />Reference Areas were evaluated to provide comparison values for the revegetation units. At the time of <br />sampling, revegetation within evaluated units had experienced at least nine growing seasons since the <br />completion of seeding or reseeding. Locations of all sampled areas are shown on Map 1 and sampling <br />points within each unit and reference area are indicated on Maps 2 — 7 in Appendix A. <br />Field sampling for the directly measurable variables of ground cover, production, and woody plant <br />density were systematically conducted within the reclaimed areas as well as within the two reference <br />areas on June 6 th - 9 th, 2011 and August 5 2011. Sampling was conducted by or under the direct <br />supervision of Cedar Creek's Senior Range / Wildlife Ecologist, Mr. Steven R. Viert or Senior Plant <br />Ecologist, Mr. Erik M. Mohr. To maximize the probability for representation from the smaller units as well <br />as to address the extreme variation (due to the influence of cheatgrass and shrub domination), an <br />elevated number of samples (97 sample points in the Greasewood Comparison Revegetation and 125 in <br />the Shadscale Comparison Revegetation) were systematically collected from each of the two combined <br />reclamation units. This also provides proportional distribution across all reclaimed areas thereby <br />providing a "weighted" representation as well as a better capture of variation. Each of the revegetation <br />Cedar Creek Associates, Inc. 1 Snowcap Mine - 2011 <br />Phase III Bond Release Evaluation - Year 1 <br />