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Stoner engineering & Surveying <br />Engineering, Testing & Surveying <br />Date: March 24, 2015 <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.Eoje" <br />Project Manager <br />Stoner Engineering & Surveying <br />Re: King Coal I — Quarterly Waste Pile /Embankment Inspection <br />On March 20, 2015, Ryan Griglak, P.E. visited the GCC Energy, LLC King I Mine site to conduct <br />the quarterly inspection of the coal waste pile /embankment. Mr. Griglak, P.E. has conducted <br />inspections for the placement of earthwork /embankment fill material for numerous <br />commercial, residential and municipal projects in which buildings, roadways and parking <br />facilities were installed over the placed materials. <br />The perimeter ditches located along the north and south sides of the property are in good <br />condition. The debris in the north ditch (clean water ditch) had been removed (see Pic. 1). <br />None of the material stored at the top of the pile has been placed since the previous inspection <br />based upon a comparison of the photos from the previous report as the pile structure is <br />identical (see Pic. 2). This material should be spread regularly in lifts that do not exceed those <br />specified in the design. The placement of the material should be periodically tested to ensure <br />that the required density /compaction required in the design is being met. <br />Compaction testing results are included from Trautner Geotech, LLC for the embankment <br />material which were conducted last fall before fill placement was halted for the season. Four <br />(4) tests were done in the area where fill materials were being placed. All the compaction tests <br />performed exceeded the 90% of the maximum dry density required. A copy of the results has <br />been included with this report. <br />The face of the embankment showed no signs of instability or weakness. All drainage channels <br />were clear of debris and no damage to the channel sections was observed. The waste pile has <br />been and continues to be constructed and maintained as specified in the design approved by <br />the Division of 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 />