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OXBOW MINING, LLC <br />3737 Hwy 133 P.O. Box 535 Somerset, Colorado 81434 USA Tel (970)929-5122 Fax <br />(970)929-5177 <br />TIIIRD QUARTER 2015, <br />ENGINEERING INSPECTION <br />EAST YARD, WEST VALLEY FILL AND II WEST <br />COAL MINE WASTE DISPOSAL PILES <br />The approved Oxbow Mining, LLC (OMLLC) Mine permit includes a requirement for quarterly inspections of coal <br />mine waste piles for stability. The inspection is to be performed by a registered engineer or other qualified professional <br />specialist, who is experienced in the construction of earth and rockfill embankments. On September 29, 2015 visual <br />inspections were performed of the East Yard, West Valley Fill and H West coal mine waste disposal areas. No <br />compaction tests were conducted during the quarter. All refuse areas were checked and sprayed for noxious weeds. <br />EAST YARD - The East Yard disposal area has reached its design capacity, and no new waste material has been placed <br />since June of 2001. The revegetated slope was inspected for signs of erosion or instability. No erosional features were <br />noted on the slope. The covering of the waste pile is considered complete. Nothing was observed during the inspection <br />that would indicate the pile has a potential for structural failure. <br />WEST VALLEY FILL — During the third quarter, no waste material was hauled to the West Valley Fill area. <br />The refuse pile remains surveyed at the approximate 6228' elevation. The active waste storage area will continue to be <br />available as an interim storage area for wet refuse rehandled later to II West and a staging area for miscellaneous projects <br />and material storage. <br />During the third quarter, a burning coal odor, dead vegetation and a warm surface indicated a zone of spontaneous <br />combustion under the reclaimed surface located on the west end of the second bench at the approximate 6200' elevation. <br />An MSHA remediation plan was submitted and approved (attached). Contractors have been selected and remediation is <br />scheduled to begin late September or early October, 2015. <br />The revegetated outslope located between the fill slope toe to the approximate 6200' elevation was inspected for signs of <br />erosion and instability. No erosional features were noted on the slope. The third bench (approximate 6220' elevation) <br />setback remains established for the final lift of waste material and the ramp constructed on the waste pile to provide <br />access to the II West Coal Refuse Facility light use road and haul road. These two roads continued to be utilized during <br />the quarter. No springs or seeps were noted. Surface drainage control features are performing according to the plan. <br />Nothing was observed during the inspection that would indicate the West Valley Fill has a potential for structural failure. <br />11 WEST — The H West disposal area received 820 CY of additional coal mine waste material during the third quarter of <br />2015. H West waste remains at the approximate 6141' elevation. The 2013 regraded outslope area seeded on November <br />7, 2013 remains stable upon finishing the 2nd year growth of seeded species. Older seeded areas continue to perform <br />according to the plan. No new areas were available for seeding in 2014 or 2015. No springs or seeps were noted. <br />Surface drainage control features are performing according to the plan. Nothing was observed during the inspection that <br />would indicate the H West Valley Fill has a potential for structural failure. <br />Inspected by James A 'ger',�-'�y, <br />REGIS <br />Be6aminL. G wig a 44 Date <br />Colorado Lice ed l AGREnevieertlNo. 34286 <br />GN P.1. <br />• Page 1 <br />