2013-04-03_PERMIT FILE - X201322801 (2)

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SUNSET TRAIL AREA EXPLORATION PLAN 3482.1(A)(4)(iii)- Narrative Description of Proposed Exploration Area The proposed exploration area is located approximately 11 miles east of Paonia, Colorado and 7 miles southeast of the town of Somerset, Colorado. The area lies within a portion of T.14S. R.90W. 6th Prime Meridian, Gunnison County, Colorado. The proposed exploration area is located south and east of the existing West Elk Mine. Locations of the 12 sites are shown in Table 1 and on Map 1. The area for ten holes is within existing coal leases held by Mountain Coal Company (C -1362) and Ark Land Company (COC- 67232). Surface Topography The elevation of the proposed exploration area ranges from 8250 ft. in the drainage of South Prong Creek and increases southeastward to 9800 ft. near the western flank of Mt. Gunnison. The terrain is comprised of moderate slopes and benches within the Wasatch and Mesa Verde Formations and the alluvial and colluvial slopes derived from the Mt. Gunnison intrusive along North and South Prong Creek and Lick Creek drainages. These drainages flow west and northwest into Minnesota Creek. Minnesota Creek in turn joins the North Fork of the Gunnison River at the town of Paonia. Geology The proposed Sunset Trail exploration application area lies along the southeastern edge of the Piceance Basin within the Somerset Coal Field, occurring on the Minnesota Pass U.S.G.S. 7 1/2 minute quadrangle map. Initial geolggical work in this area was done by W. T. Lee (1912) who reported his findings in "Coal Fields of Grand Mesa and the West Elk Mountains, Colorado" (USGS Bulletin 510). Later in 1948, Vard H. Johnson published a USGS map of the Paonia Coal Field incorporating drill hole data generated through a USGS and U.S. Bureau of Mines drilling program. The following year Johnson further described the geology of the Minnesota Creek area in USBM Technical Paper 721. More recently, in 1989, C.R. Dunrud compiled a coal resources map of the region (USGS Map C -115). Additionally, the Colorado Geological Survey has published a report on the coal resources of the Somerset Coal Field (CGS OFR 98 -6 and Resource Series 38). The general stratigraphy of the exploration area consists of members of the Wasatch Formation of Tertiary age overlying Mesa Verde Formation of the Upper Cretaceous age (see Figure 1, Generalized Stratigraphic Cross- Section). Capping most of the higher terrains are colluvial deposits from Mt. Gunnison. Below the colluvium, rocks of the Wasatch Formation are exposed in limited locations. The uppermost member of the Mesaverde Formation is the Ohio Creek member. It is exposed along many of the steeper slopes with the Barren Member of the Mesa Verde formation cropping out lowest in the exploration area. The Upper and Lower Coal Members of the Mesa Verde Formation are the major coal - bearing units in the area. In ascending order are the A (King), B (Somerset), and C (Bear) coal beds of the Lower Coal Member and the D (Oliver), E (Hawks Nest), and the F Seam coal beds of the Upper Coal Member. All of these seams have all been historically mined within the North Fork Valley. Within the exploration area only the E Seam is known to be of mineable thickness. The extent of these coal beds beneath the exploration area is only marginally defined. The Rollins Sandstone is the lowest member of the Mesaverde Formation present in the exploration area. Beneath the Rollins Sandstone is the Cretaceous Mancos Shale. 2