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June 3, 2014 C- 1981- 008/New Horizon Mine MPB <br />Inspection Topic Summary <br />NOTE: Y= Inspected N =Not Inspected R= Comments Noted V= Violation Issued NA =Not Applicable <br />Y - Air Resource Protection <br />R - Availability of Records <br />Y - Backfill & Grading <br />NA - Excess Spoil and Dev. Waste <br />NA - Explosives <br />Y - Fish & Wildlife <br />R - Hydrologic Balance <br />Y - Gen. Compliance With Mine Plan <br />NA -Other <br />NA - Processing Waste <br />R -Roads <br />Y - Reclamation Success <br />Y - Revegetation <br />NA - Subsidence <br />Y - Slides and Other Damage <br />R - Support Facilities On -site <br />Y -Signs and Markers <br />Y - Support Facilities Not On -site <br />NA - Special Categories Of Mining <br />R - Topsoil <br />COMMENTS <br />This was a complete inspection of the New Horizon Mine conducted by Mike Boulay of the Division of <br />Reclamation, Mining and Safety Grand Junction Field Office on June 3 and 4, 2014. Frank Ferris representing <br />Western Fuels- Colorado (WFC) was present throughout the entire inspection. Weather conditions were clear and <br />warm. The main activity at the mine site was topsoil redistribution on the Morgan property. There was no other <br />activity at the site during this inspection. <br />AVAILABILITY OF RECORDS — Rule 5.02.4(1): <br />The availability of records was checked on the morning of 6/4 following the ground inspection. All required <br />records were on file and available for review at the mine office, with exception of the 2013 Annual Reclamation <br />Report. Please update the records file with a copy of this report. No other problems were noted with the records <br />review. Please see the attached Availability of Records checklist at the end of this inspection report. <br />HYDROLOGIC BALANCE - Rule 4.05 <br />Drainage Control 4.05.1, 4.05.2, 4.05.3; Siltation Structures 4.05.5, 4.05.6; Discharge Structures 4.05.7, 4.05.10; <br />Diversions 4.05.4, Effluent Limits 4.05.2, Ground Water Monitoring 4.05.13; Surface Water Monitoring 4.05.13; <br />Drainage — Acid and Toxic Materials 4.05.8; Impoundments 4.05.6, 4.05.9; Stream Buffer Zones 4.05.18: <br />Ground conditions were dry throughout the mine site. Haul roads and access roads were dry and in good <br />condition. Road ditches appeared to be well maintained. Site sedimentation ponds were inspected. All of these <br />ponds were retaining water. Pond 007 and 013 were the only ponds discharging. The discharge was clear. Pond <br />inlets, embankments and discharge structures were stable at all pond locations. <br />The final pit to be backfilled located to the southwest of Pond 013 has standing water, but significantly less than <br />the last inspection (see attached Photograph No. 1). Pit water is being pumped to Pond 011 as opposed to Pond <br />013. The pumping was temporarily down due to the need for the pump at the active pit at New Horizon North <br />Mine for groundwater inflow dewatering. Pond 011 is full to a level just below the primary spillway due to the <br />influx of water from the final pit area (Photograph No. 2). <br />Number of Partial Inspection this Fiscal Year: 8 <br />Number of Complete Inspections this Fiscal Year: 4 <br />Page 2 of 7 <br />