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,jtoner r_ngineering & 5urvecyng <br />Engineering, Testing & Surveying <br />Date: December 16, 2014 <br />To: Tom Bird <br />Manager, Coal Services <br />GCC Energy, LLC <br />6473 County Road 120 <br />Hesperus, CO 81326 <br />(970) 385 -4528 <br />From: Ryan Griglak, P.E. <br />Project Manager <br />Stoner Engineering & Surveying <br />Re: King Coal I — Quarterly Waste Pile /Embankment Inspection <br />On December 12, 2014, Ryan Griglak, P.E. visited the GCC Energy, LLC King I Mine site to <br />conduct the quarterly inspection of the coal waste pile /embankment. <br />The perimeter ditches located along the north and south sides of the property are in good <br />condition. There was one location in the north ditch (clean water ditch) where a small tree <br />came down the embankment and is in the ditch section (see Pic. 1). This debris should be <br />removed from the ditch to prevent the potential for a blockage and /or overflow at that <br />location. <br />Much of the materials piled at the top of the embankment during the previous inspection has <br />been placed as embankment material (see Pic. 2). New material has since been brought to the <br />site and is awaiting placement. This material should be spread regularly in lifts that do not <br />exceed those specified in the design. The placement of the material should be periodically <br />tested to ensure that the required density /compaction required in the design is being met. <br />Trautner Geotech, LLC was contracted to provide compaction testing and results for the <br />embankment material at least quarterly. The results of this quarters testing has not yet been <br />received but, the results will be forwarded once the results are available. <br />The face of the embankment showed no signs of instability or weakness. The waste pile has <br />been and continues to be constructed as specified in the design approved by the Division of <br />Minerals and Geology. <br />P.O. Box 1163 28 South Washington Street Cortez, Colorado 81321 <br />970.565.7483 stonerenaineer @frontier.net 970.565.7704 <br />