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PERMIT TO CONDUCT SURFACE COAL EXPLORATION ACTIVITIES (Permit Renewal)

Decision And Findings of Compliance
January 3, 2011

Pac-Rim Coal, LP

Chuitna Coal Mine Phase 0 Exploration Permit Renewal

Surface Coal Exploration Permit

02-83-795

Chuitna Coal Mine Phase 0 Exploration Permit Renewal January 3, 2011

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COAL EXPLORATION PERMIT RENEWAL Permit Name: Chuitna Coal Mine Phase 0 Permit Number: 02-83-795 Date Issued: January 3, 2011 The Alaska Department of Natural Resources, Division of Mining, Land, and Water: In accordance with AS 27.21 and 11 AAC 90, hereby grant a renewal of Coal Exploration Permit # 20-83-795 to Pac-Rim Coal, LP. This renewal is subject to the requirements of AS 27.21 and 11 AAC 90 for coal exploration activities. TERMS OF PERMIT (RENEWAL) 1. TERM: The term of this permit is January 4, 2013. 2. CONFORMANCE WITH APPLICATION: This renewal authorizes the continued monitoring of 82 monitoring wells and the installation of 6 more new wells. It will allow for the continued maintenance of a METS station in the permit area. No additional activities or changes are being authorized under this renewal. The exploration area consists of 20,650 acres, all within the boundaries of five coal leases with ADL numbers of 36911, 36913, 37002, and 59502. 3. All exploration and reclamation activities are to be conducted as described in the exploration application and permit, as revised and in compliance with 11 AAC 90.167. Any variation from the plan presented in the application must be presented to DNR and may require further revision of the permit and change in the bonded amount. 4. BOND: Operations under this permit are guaranteed by a surety bond in the amount of $159,900.00. 5. COMPLIANCE WITH LAW: Operations under this permit shall be conducted in compliance with applicable federal, state, and local laws and regulations now or hereafter in effect during the life of the permits. 6. REPORTS: Upon completion of operations and at other times, if requested, the permittee shall report in writing to the Director on matters relevant to the character and progress of the operations under this permit. The completion report shall include a detailed statement of cleanup and reclamation work at the site. Reports shall be filled with the Division of Mining, Land and Water, 550 W. 7th Avenue, suite 920, Anchorage, AK 99501 (fax: (907)-269-8930).

Chuitna Coal Mine Phase 0 Exploration Permit Renewal January 3, 2011

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Final Findings of Fact and Decision Permit Renewal

Coal Exploration Permit 02-83-795 Chuitna Coal Mine Phase 0 Exploration Permit
The Alaska Department of Natural Resources, Division of Mining, Land and Water (DMLW) has reviewed the permit renewal request submitted Pac-Rim Coal, LP for the Chuitna Coal Exploration Permit (02-83-795). The DMLW reviewed all written comments and other relevant information received regarding the renewal and makes the following Findings of Fact and Decision in accordance with 11 AAC 90.165. 1. On June 30, 2010, a request for renewal of coal exploration permit number 02-83-795 was filed with DMLW. 1. The exploration area for this site is approximately 11 miles north west of Tyonek, Alaska within, T13N, R12W, Sections 14, 15, 19-36, T12N, R12W, Sections 2-10, 15-17, 20-22; T12N, R13W, Section 1 of the Seward Meridian. 2. This renewal authorizes the continued monitoring of the 82 monitoring wells, and the installation of 6 more new monitoring wells. It will allow for the continued maintenance of a METS station on the permit area. No additional activities or changes are being authorized under this renewal. The permit will expire January 4, 2013. 3. Public notice of this permit renewal was given for the period starting on August 4, 2010, and ending on September 24, 2010. The Pubic Notice was placed in the Anchorage Daily News on August 4, 2010. Also, on August 4, 2010 the notice was mailed directly to the Division’s mailing list of affected persons and agencies. The comment period was extended until October 13, 2010 to allow for addition time for the public to comment on the exploration renewal. 4. During the public notice period the Division received a total of 221 comment letters. A separate response summary to those comments has been created, “Appendix A: DNR Responses to Public Comments Concerning the Pac-Rim Chuitna Exploration Permit renewal application”. 5. The activities proposed in the permit revision meet the requirements of AS 27.21.200 and 11 AAC 90.163, and 11 AAC 90.167, subject to the stipulations of the permit, which ensure that the exploration and reclamation will comply with these requirements. 6. The approved permit area is not within an area designated unsuitable for mining or coal exploration under AS 27.21.260. 7. The proposed coal exploration activities will not affect threatened or endangered species or their critical habitat. Chuitna Coal Mine Phase 0 Exploration Permit Renewal January 3, 2011 Page 4 of 5

8. Pursuant to 11 AAC 90.167(b) the Division has determined that the reclamation bond in the amount of $159,900 is sufficient to cover the associated reclamation costs. The Permit and Final Findings of Facts and Decision are available for review at the Alaska Department of Natural Resources, Division of Mining, Land and Water, 550 W. 7th Ave., Suite 920, Anchorage, AK 99501-3577, or on our website (www.dnr.state.ak.us/mlw/mining/index.htm). The applicant or a person with an interest which is or may be adversely affected by this decision may request in writing a hearing under AS 27.21.150 to review the reasons for this decision. The request for a hearing may be mailed or delivered to Daniel S. Sullivan, Commissioner, Department of Natural Resources, 550 West 7th Avenue, Suite 1400, Anchorage, AK 99501; or faxed to 907.269.8918; or sent by electronic mail to dnr.appeals@alaska.gov. The request for a hearing must be received within 30 days after the applicant is notified of this decision; the request must be received by 5:00 p.m. of the 30th day.

Chuitna Coal Mine Phase 0 Exploration Permit Renewal January 3, 2011

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