2012-05-14_REVISION - C1981012 (2)

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James Stark May 10, 2012 facilities is permitted. Additionally, please provide the Division with a description of how exploration hole NE -01 -12 will be accessed, since there is no road shown on Map 20. NECC - See Exhibit 34 Addendum, Division of Wildlife Lease. Access to NE -01 -12 will be along the old rail corridor owned by NECC. 4. DRMS - Exploration Hole NE -01 -12 is being drilled in an area that is considered an alluvial valley floor along the Purgatoire River. Please provide a description, in section 2.05.4 of the permit, of how NECC will reclaim the drill pad and mud pit to ensure protection of the Purgatoire River AVF and its essential hydrologic functions. Please refer to Rule 4.24 for more information on the essential hydrologic function for an AVF. NECC - NECC does not believe NE -01 -12 is located in an area that is considered an alluvial valley floor. The DRMS accepted that NE -01 -12 was not in an alluvial valley floor with its approval of MR -107 and the hole's location did not change. The hole was deleted from MR- 107 and added to MR -114 because the projected depth of the hole changed. NE -01 -12 is located in the rail corridor some 45 feet above the Purgatoire River. The elevation of NE -01- 12 is about 7,300 feet and the river is about 7,265 feet. Map 20 shows in green hatch areas of pasture land that would be considered alluvial valley floor and the green hatch does not encompass any of the rail corridor. Additionally, PAP page 2.06 -3 states that the operation of the New Elk Mine is specifically "grandfathered" by existing Colorado Regulations for Coal Mining in or adjacent to alluvial valley floors. 5. DRMS - On the proposed Map 20 — Structure Inventory Map, the location of exploration hole NE -17 -12 has changed from the location approved in Minor Revision 107. The location of NE -17 -12 on the proposed Map 20 has moved approximately 1,000 feet NNE of the approved location. Please explain why the location of exploration hole NE -17 -12 moved and please update Exhibit 28 page 233 with its new location. NECC - NECC decided to move NE -17 -12 to a location where it believed the lab results would be more valuable. Exhibit 28 - page 233 was updated with its as built location. 6. DRMS - With the submittal of MR -114, NECC has submitted a reclamation cost estimate for the proposed new exploration holes and a credit for the holes approved but not drilled with MR -107. Exploration holes, NE -01 -12 and NE- 18 -12, will not be drilled as deep in the proposed MR -114 as they were in the approved MR -107, thus the credit (the location of exploration hole NE -I8 -12 has also been moved but that has no bearing on the cost estimate). The Division has calculated the reclamation cost for the six exploration holes proposed in MR -114 as well as the credit for the two exploration holes not drilled in MR -107 (attached). The total increase in liability for MR -114 is $15,747.00. This increase is based on a reclamation liability of $27,689.00 for the six holes proposed in MR -114 and a credit of $11,947.00 for the two holes not drilled in MR -107. Please submit a bond rider for $15,747.00 for Minor Revision 114. NECC - NECC has over $50,000 excess bond posted with DRMS. A bond rider is not required for minor revision 114.