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APPLICATION FOR MODIFICATION TO <br />FEDERAL COAL EXPLORATION LICENSE COC- 74817 <br />Blue Mountain Energy, Inc. applied for and received a Federal Coal Exploration License (COC- <br />74817) on certain unleased Federal Coal Lands in Rio Blanco County, Colorado. The two -year <br />license was issued on November 01, 2011 and is valid through October 2013. A total of 15 <br />holes were rotary drilled on COC -74817 during the fall of 2011. The data showed the B -Seam <br />coal to be highly variable in thickness and contain rock partings. More closely spaced drilling <br />and core drilling is needed to confirm the coal quality and mineability of the deposit. Blue <br />Mountain Energy, Inc is requesting modification to its current exploration plan to allow for <br />additional drilling. The exploratory drilling program described herein will better define the <br />quantity and quality of coal in this area that adjoins the Deserado Mine Logical Mining Unit. The <br />location of the Deserado Mine LMU, consisting of the seven Federal coal leases, and the <br />relation to COC -74817 are shown in Figure 1 -1. <br />Blue Mountain Energy requests this proposed additional exploration to occur under COC- 74817. <br />The proposed drilling modifications, related disturbed lands and exploration schedule are <br />described herein. Depending upon approval and driller availability, drilling activities would <br />commence in the fall of 2012. This request for modification supplements the information <br />provided in the Exploration License Application of February, 2011 (revised July, 2011). All <br />other information remains unchanged from the approved exploration plan. <br />This modification is expected to have little or no new impacts on resources and will comply with <br />all provisions and stipulations within COC -74817 and the approved exploration plan. Potential <br />affects to soils, vegetation, wildlife, surface and subsurface hydrology are likely to remain <br />unchanged. Access to the drill sites will continue to use existing roads and trails and avoid gully <br />crossings to the extent possible. A cultural resource survey was conducted for the originally <br />proposed drill sites and access. Because additional surface disturbances are requested by this <br />modification, a new field inventory of cultural, historical and archeological resources will be <br />conducted by an approved cultural resource professional. The findings of the cultural survey <br />will be submitted to the White River Field Office Manager for approval and no surface disturbing <br />activities will be conducted until authorized. <br />