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January 22, 2015 C- 1983 - 059 /Terror Creek Loadout JRS <br />Inspection Topic Summary <br />NOTE: Y= Inspected N =Not Inspected R= Comments Noted V= Violation Issued NA Not Applicable <br />N - Air Resource Protection R - Roads <br />N - Availability of Records N - Reclamation Success <br />N - Backfill & Grading N - Revegetation <br />N - Excess Spoil and Dev. Waste N - Subsidence <br />N - Explosives N - Slides and Other Damage <br />N - Fish & Wildlife R - Support Facilities On -site <br />R - Hydrologic Balance N - Signs and Markers <br />R - Gen. Compliance With Mine Plan N - Support Facilities Not On -site <br />N - Other N - Special Categories Of Mining <br />N - Processing Waste N - Topsoil <br />COMMENTS <br />This was a partial inspection of the Terror Creek Loadout by Jim Stark of the Colorado Division of Reclamation, <br />Mining and Safety. Tabitha Lynch, also with the Division and Jim Kiger, representing Terror Creek, LLC, <br />accompanied me on the inspection. The Terror Creek Loadout is only operational on an as- needed basis. Terror <br />Creek brought in a skid- mounted crusher and screener from the Elk Creek Mine, as the processing facility on -site <br />does not work very well for the small amounts of coal needed for the local market. The loadout was not operating <br />at the time of the inspection but there were stockpiles of processed coal on site. The weather was cool and partly <br />cloudy and there was some snow on the ground. <br />HYDROLOGIC BALANCE - Rule 4.05: Drainage Control 4.05.1, 4.05.2, 4.05.3; Siltation Structures 4.05.5, <br />4.05.6; Discharge Structures 4.05.7, 4.05.10; Diversions 4.05.4; Effluent Limits 4.05.2; Ground Water Monitoring <br />4.05.13; Surface Water Monitoring 4.05.13; Drainage — Acid and Toxic Materials 4.05.8; Impoundments 4.05.6, <br />4.05.9; Stream Buffer Zones 4.05.18: <br />- The sediment pond had a small pool of water in the bottom at the time of the inspection. The pond embankment <br />was covered with patches of snow but appeared to be well vegetated and stable. There were no erosional problems <br />noted on the pond embankment or inslopes. <br />- The dugout pond was well vegetated and stable. The pond was dry at the time of the inspection. There were no <br />erosional problems noted at the pond. <br />- The roadside ditches were all dry at the time of the inspection. The inslopes were stable and no erosional <br />problems noted on the inslopes or bottom of the ditches. <br />GENERAL MINE PLAN COMPLIANCE: <br />- The operator has moved a portable (skid- mounted) crusher and screener from the Elk Creek Mine to the Terror <br />Creek Loadout. This was done because the equipment currently at the loadout is only marginally functional and <br />not very well suited for the small amount of coal processing for the local coal market. The coal being produced is <br />stoker and lump and is strictly for the local coal sales market and there are small stockpiles of each. The operator <br />is receiving its coal from the West Elk Mine and is using a third -party contractor to run the operation. Although <br />the loadout was not operational at the time of the inspection, all of the operations at the Terror Creek Loadout are <br />consistent with those permitted <br />Number of Partial Inspection this Fiscal Year: 5 <br />Number of Complete Inspections this Fiscal Year: 2 <br />Page 2 of 4 <br />