_INSPECTION - C1981012 ‎(10)‎

• Permit No: C1981012
• IBM Index Class Name: Inspection
• Doc Name: Inspection Report
• From: DRMS
• To: Ron Thompson
• Inspection Date: 7/23/2013
• Email Name: LDS
• Email Name: SB1
• Email Name: DIH
• Media Type: D
• Archive: No

July 23, 2013 C-1981-012/New Elk Mine LDS
Inspection Topic Summary
NOTE: Y=Inspected N=Not Inspected R=Comments Noted V=Violation Issued NA=Not Applicable
Y -Air Resource Protection R -Roads
R -Availability of Records N -Reclamation Success
N -Backfill &Grading R -Revegetation
R -Excess Spoil and Dev.Waste N - Subsidence
R -Explosives N - Slides and Other Damage
Y -Fish &Wildlife Y - Support Facilities On-site
R -Hydrologic Balance R - Signs and Markers
R -Gen. Compliance With Mine Plan R - Support Facilities Not On-site
N -Other Y - Special Categories Of Mining
R -Processing Waste R -Topsoil
COMMENTS
This was a complete inspection by Leigh Simmons and Dan Hernandez of Colorado Division for
Reclamation, Mining and Safety, (the Division). The inspectors were accompanied by Ron Thompson of New Elk
Coal Company, (NECC). The weather was varied: overcast on Tuesday and Wednesday, fine for most of Thursday
with rain late in the day, and fine on Friday morning. The area had received several rainstorms, on the order of the
l0y/24hr event, over the preceding few weeks. A significant rain event also occurred overnight on Wednesday.
The New Elk mine continues in Temporary Cessation.No coal is being produced, and virtually all stockpiled coal
has been shipped in 4 train loads,to a broker, for sale as steam coal.
The parent company of NECC, Cline Mining, announced on July 9, 2013,that it had agreed a new
financing arrangement with Marret Asset Management designed to ensure that Cline would be able to meet its
short-to medium-term obligations,whilst continuing discussions with other potential investors. Cline voluntarily
de-listed from the Toronto Stock Exchange on July 13,2013.
Two separate groups of potential investors visited the New Elk mine during the inspection.
Several employees have left the mine, including David Stone, Rachel Ford,Wayne Schiller and Dick
Tribble. The new Executive Director of Cline Mining, Mark Haywood, is acting Mine Manager at New Elk and is
on-site. He took time to meet with DRMS inspectors. Ron Thompson was a NECC employee at the time of the
inspection,but may continue his relationship with the mine as a consultant from August 1, 2013. Dennis Wilson,
Bobby Steele,Vince Massaroti remain employed,with responsibilty for surface operations. Randy Acre has been
re-focused on safety(Safety Manager). Greg Smith remains as Technical Services manager,with responsibility for
permitting, among other things. Mr Wilson and Mr Smith will each report to the Mine Manager. The mine
currently employs 24 people.
The staff at New Elk have continued to make an effort to bring the mine into full compliance with the
regulations and permit,however some issues that have been raised in previous inspection reports have not been
completely addressed meaning that enforcement action has become necessary. Consistent with the format of recent
inspection reports, items needing action will be highlighted using bold text.Where possible,these items should be
addressed before the next inspection.
Several permitting actions are in progress,these are detailed under the heading GENERAL MINE PLAN
Number of Partial Inspection this Fiscal Year: 0
Number of Complete Inspections this Fiscal Year: 1
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