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STATE OF COLORADO <br />DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866 -3567 <br />FAX: (303) 832 -8106 <br />July 6, 2012 <br />Jennifer Hunt <br />Peabody Sage Creek Mining, LLC. <br />PO Box 250 <br />Hayden, CO 81639 <br />RE: NOI X- 2011 - 231 -01, 180 -day Report and Abondonment Report Review <br />Dear Ms. Hunt, <br />COLORADO <br />ID IV I S I O N O F <br />RECLAMATION <br />MINING <br />SAFETY <br />John W. Hickenlooper <br />Governor <br />Mike King <br />Executive Director <br />Loretta E. Pineda <br />Director <br />The Division has received the 180 -day report and Drillhole Abandonment report for the Notice of Intent <br />CX- 2011 - 231 -01. The reports are in compliance and satisfy rules 2.02.6(3)(a) and 4.07.3(3) <br />respectfully. It is noted that of the 9 holes permtted, only 8 holes were drilled. Holes CCU064, <br />CCU070, CCU071, CCU073, CCU072, and CCU074 were drilled, sealed and reclaimed. Holes <br />CCU069 and CCU087 were converted to a discharge well and a water well respectively. <br />The Division has the following comment regarding the above mentioned reports: <br />• Based on the reports submitted, permitted holes CCU025 and CCU065 were not drilled. The <br />Division has a concern with drilled and converted hole CCU087 mentioned in the report. This <br />hole was not permitted through NOI X- 2011 - 231 -01 and this hole falls within the currently <br />approved permit boundary, which by Rule, omits the hole from an exploration NOL Please <br />provide further information on drilled hole CCU087 to discuss the holes inclusion into the <br />NOI. <br />Thank you for the timely submittal. <br />If you have any questions please feel free to contact me at (303)866 -3567 ext 8134 <br />Sincerely, <br />Jason Musick <br />Environmental Protection Specialist <br />Office of Office of <br />Mined Land Reclamation Denver • Grand Junction • Durango Active and Inactive Mines <br />