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MINE ENGINEERING CIVIL ENGINEERING <br />MINE RECLAMATION CONST. MANAGEMENT <br />August 23, 2012 <br />Dear Mr. Boulay: <br />J. E. STOVER & ASSOCIATES, INC. <br />2352 NORTH 7th STREET, UNIT B <br />GRAND JUNCTION, COLORADO 81501 <br />PHONE: (970) 245 -4101, FAX 242 -7908 <br />Mike Boulay <br />Division of Reclamation, Mining and Safety RECEIVE) <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 AuG 27 2012 <br />Re: McClane Canyon Mining, LLC oiRon, <br />McClane Canyon Mine oiv �° taaretvat <br />Permit Revision Application No. 2 <br />Permit number: C -1980 -004 <br />This letter is in response to the DRMS' adequacy letter dated February 25, 2011 for the <br />PR -02 application. It is intended to clarify the components that will be included with the <br />adequacy response that will be forthcoming. <br />The PR -02 application was submitted on October 29, 2010 and contained plans to build <br />an air jig facility, an expansion to surface facilities (sediment pond, coal mine waste pile, <br />topsoil and construction material storage piles), and a revision to the mine plan and <br />permit boundary expansion. At the same time MCM applied for a Federal Coal Lease <br />modification from the Bureau of Land Management (BLM) that once approved would be <br />incorporated into the permit document. <br />An Environmental Assessment (EA) for the project in its entirety was initiated by the <br />BLM in July of 2010. During this time MCM worked with BLM to its address comments <br />and questions and attempted to provide mitigation to BLM resource issues. <br />However, in February 2012 BLM notified DRMS they would be revising the scope of the <br />EA and said it would not be completing the EA for the surface facilities, only for the <br />lease modification area. BLM indicated their involvement in the expansion of the <br />surface facilities would be limited to providing comments during the DRMS adequacy <br />review process, thus removing themselves from the lead agency role. BLM then <br />provided its comments on the PR -02 application package and stated its objection to an <br />expansion of the surface facilities. BLM further stated it could not provide concurrence <br />with approval of the plan primarily due to location of the coal mine waste pile. <br />MCM worked diligently for several months to address comments in the DRMS adequacy <br />letter and tried to work out mitigation for potential BLM resource issues. However, since <br />