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Peabod <br />1111 ENERGY <br />Jason Musick <br />Environmental Protection Specialist <br />Colorado Division of Minerals and Geology <br />1313 Sherman Street, Room 215 <br />Denver, Colorado 80203 <br />(303) 866 -3567 X 8134 <br />RE: Twentymile Coal, LLC - Foidel Creek Mine (Permit No. C -82 -056), Technical Revision (TR12 -79) <br />Bond Reduction <br />Dear Mr. Musick: <br />Consistent with applicable provisions of Rule 3.02.2(5), Twentymile Coal, LLC (TC) requests CDRMS <br />approval of a Technical Revision (TR12 -79) to our approved Mining and Reclamation Permit, to reduce the <br />current bond liability by $262, 649, or an appropriate figure as calculated by the CDRMS. The requested bond <br />reduction is necessary and appropriate to address a calculation error which occurred when updating and <br />recalculating the bond liability during the Mid -Term Review process (MR10 -251). <br />As a result of an internal review to determine the appropriate amount and adjust our corporate liability <br />accounting under the Sorbane -Oxley requirements for the recently completed reclamation of the Fish Creek <br />Tipple facilities and area, a significant discrepancy was noted in the calculated bond liability for "Ripping and <br />Regrading" the Fish Creek Tipple area (refer to Task 014 of the CDRMS bond calculations). The calculated <br />bond liability for Task 014, as determined by the CDRMS during the RNO5 Permit Renewal process (01/15/09), <br />was $30,764. The calculated bond liability for the same task, as shown in the CDRMS's revised bond <br />calculation summary for the Permit Mid -Term Review (10/13/10), was $293,413. In reviewing the supporting <br />documentation for the Mid -Term bond numbers, it became evident that the figure shown in the bond summary <br />for Task 014 was in error. <br />Based on this information, it appears that the calculated bond liability needs to be adjusted to address the <br />identified error in the Mid -Term bond summary. This submittal includes a completed revision Application <br />Form and proposed Public Notice. We appreciate your consideration and cooperation in facilitating timely <br />review and approval. Once you have had opportunity to review the accompanying information, please feel free <br />to contact me with any questions or to discuss related matters. <br />Best regards, <br />Twentymile Co <br />Jerry M. ton <br />Mana r — nvironmental Affairs <br />Twentymile Coal, LLC <br />29515 Routt County Road 27 <br />Oak Creek, CO 80467 <br />970.879.3800 <br />May 17, 2012 <br />