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February 25, 2015 C- 1981- 012/New Elk Mine LDS <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 - Roads <br />R - Availability of Records <br />N - Reclamation Success <br />N - Backfill & Grading <br />N - Revegetation <br />R - Excess Spoil and Dev. Waste <br />N - Subsidence <br />N - Explosives <br />N - Slides and Other Damage <br />N - Fish & Wildlife <br />Y - Support Facilities On -site <br />R - Hydrologic Balance <br />Y - Signs and Markers <br />R - Gen. Compliance With Mine Plan <br />N - Support Facilities Not On -site <br />N - Other <br />N - Special Categories Of Mining <br />R - Processing Waste <br />N - Topsoil <br />COMMENTS <br />This was a partial inspection by Leigh Simmons of Colorado Division for Reclamation, Mining and <br />Safety, (the Division). The inspection was accompanied by John Terry of New Elk Coal Company, (NECC). The <br />weather was clear and cold, with several inches of snow on the ground and more in the forecast for the afternoon. <br />The snow made for difficult access around the site and meant that only a rather cursory inspection was possible. <br />Several permitting actions are in progress, these are detailed under the heading GENERAL MINE PLAN <br />COMPLIANCE. <br />The status of the New Elk Mine is Active, though will likely be changed to Temporary Cessation soon. <br />MSHA citation (7290086) was terminated on January 28, 2015. The work to abate the citation has resulted in the <br />sealing of the East Fan, West Fan and Apache Canyon vent shafts, and the Allen Portals. <br />The Cline Mining bankruptcy proceedings were progressing as expected. <br />AVAILABILITY OF RECORDS — Rule 5.02.4(1): <br />The records were not checked. A full records check will be performed in March - this will allow the <br />opportunity for NECC to bring the paper records up to date, incorporating the revised pages resulting from TR68. <br />EXCESS SPOIL and DEVELOPMENT WASTE — Rule 4.09 <br />Placement; Drainage Control; Surface Stabilization: <br />No development waste had been shifted from the temporary stockpiles. TR70 will be approved shortly, <br />pending the resolution of some small administrative issues and will allow this process to begin. <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 />The water level in pond 1 had risen noticeably (as a result of snowmelt), but not to the point where <br />discharge was necessary. Ponds 4 and 8 were inaccessible. Pond 7 was in good shape, with plenty of capacity. <br />Number of Partial Inspection this Fiscal Year: 6 <br />Number of Complete Inspections this Fiscal Year: 2 <br />Page 2 of 5 <br />