Summary:
The New Elk Mine is located in the Raton Basin, a crescent-shaped structural trough and depocenter that extends from Huerfano Park, Colorado, to Cimarron, New Mexico. The basin is bound on the west by the Sangre de Cristo Mountains, on the northeast by the Apishapa Arch, and on the southeast by the Sierra Grande and Las Animas Arches. The basin is approximately 80 miles in length and 50 miles wide, encompassing approximately 4,000 square miles and is asymmetric in shape with the axis running along the western margin. The basin is filled with approximately 20,000 to 25,000 feet of sedimentary rock in its deepest part.
The Raton Basin contains a large coal resource contained in Late Cretaceous and Paleocene formations. The coal is well known for its high-quality coking characteristics and CBM (coal bed methane).
The Raton Basin is an asymmetric synclinal basin formed during the Laramide Orogeny. The western flank of the basin dips steeply to the east and is displaced by transcurrent and thrust faults. Strata dip becomes milder in the central and eastern areas of the basin and within the permit area the dip ranges from 0 to 7 degrees and averages about 2.2 degrees east-northeast. The axis of thenorthwest-southeast oriented La Veta Syncline occurs just east of the property. The strata dip mildly westward into the basin on the basin’s eastern flank.
The coal seams of interest are hosted by the Upper Cretaceous-Tertiary Raton Formation, a heterogeneous sequence of lenticular, argillaceous sandstone, siltstone, mudstone, and coal. Lithology types are highly variable, both laterally and vertically, with correlations being best established through the occurrence of coal seams. Surface and near-surface bedrock in the mine area is limited to the Tertiary Poison Canyon Formation and the Raton Formation. The Poison Canyon Formation intermittently tops the hills in the mine vicinity.
The coal seams on the Property are numerous, but only a few achieve thicknesses that are amenable to mining. Some seams are laterally continuous and have been designated during the correlation process; these are in descending stratigraphic order: Weston, Green, Loco, Blue, Yellow, Bing Canyon Upper, Bing Canyon Lower, Red, Maxwell, Apache, and Allen.
The seams commonly have rock partings consisting of carbonaceous mudstone. The Red seam contains a tonstein (volcanic ash parting). The tonstein is not evident at every location, probably due to movement of the clay in the swamp or not designated by previous geologists. A tonstein may also be evident in the Allen seam based on past records in the southern part of the property.
The seams strike north 33 degrees west (N33°W) (azimuth 327 degrees) on average and dip 2 to 4 degrees to the northeast. Fractures and cleats vary in orientation and are oriented eastwest to northeast-southwest in the vicinity of the property. Easterly trending normal faults were encountered during previous mining and were successfully traversed without significant adverse effects. Within the Allen Mine, the most significant fault encountered showed a vertical displacement up to 30 feet (down-thrown on the south). The fault decreases in magnitude eastward and forms a graben with a vertical throw of only 3 feet. Other minor faults were encountered but rarely achieved full seam displacement and most were attributed to a depositional mode of placement (i.e., paleoslumps).
The thickness of the Allen seam varies from 1 to 7 feet, with significant areas having mineable thicknesses. The Allen seam averages about 5.5 feet thick in the central part of the property.
The Apache seam is stratigraphically located 20 to 50 feet above the Allen seam and has a thickness ranging from 1 to 6 feet. The Apache seam averages about 3.5 feet within the central part of the Property.
The Maxwell seam is located 25 to 50 feet above the Apache seam and has a thickness ranging from 1 to 9 feet thick.
The Red seam is persistent throughout the Property and ranges on the order of 3 to 4 ft thick in the central part of the Property, and thickens locally to 5 ft.
The Blue seam averages about 4 feet thick, and thickens to as much as 6 feet in the central and extreme southern parts of the Property. The Green, Loco, and Bing Canyon Upper seams are variable and swell and thin abruptly over the Property.