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Stoner engineering & Surveying <br />Engineering, Testing & Surveying <br />Date: October 3, 2016 <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 <br />Re: <br />O <br />t <br />A <br />Ryan Griglak, P.E.r�=� roc <br />Project Manager <br />Stoner Engineering & Surveying <br />King Coal I — Quarterly Waste Pile/Embankment Inspection <br />On September 30, 2016, 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. Mr. Griglak, P.E. has <br />conducted 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 condition of the perimeter ditches located along the north and south sides of the property <br />were generally in good condition (see Pic. 1). The drainage channels were generally clear of <br />debris and there was no damage observed to any of the channel sections. <br />There was stockpiled material on top of the embankment in addition to signs of material placed <br />recently (see Pic. 2). Compaction testing results will be provided once results are available. The <br />face of the embankment was in good condition and does not show any signs of excessive <br />erosion, instability or weakness (see Pic.3). <br />There were a couple trailers stored on the site just north and east of the old bath house. The <br />only structure with any proximity to the embankment material is the old bath house which is no <br />longer utilized and is abandoned. Personnel are only on-site to bring and/or place material on <br />the embankment or for mine rescue training. The mine rescue training is performed on the <br />north side of the site well away from the embankment material. The site is closed to the public <br />and there is a locked gate at the entrance to keep the public out. <br />The waste pile has been and continues to be constructed and maintained as specified in the <br />design approved by the Division of Minerals and Geology. Potential hazards to life and property <br />are minimal due to the fact that GCC has moved most of their operations to their King II facility. <br />P.O. Box 1163 28 South Washington Street Cortez, Colorado 81321 <br />970.565.7483 stonerengineer@frontier.net 970.565.7704 <br />