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Stoner engineering & Surveying <br />Engineering, Testing & Surveying <br />Date: June 24, 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; Ryan Griglak, P.E. <br />Project Manager <br />Stoner Engineering & Surveying <br />Re: King Coal I — Quarterly Waste Pile/Embankment Inspection <br />On June 23, 2016, Ryan Griglak, P.E. visited the GCC Energy, LLC King I Mine site to conduct the <br />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 condition of the perimeter ditches located along the north and south sides of the property <br />were generally in good condition. There was recent work performed along the south ditch <br />where the culvert daylights under the access road to help minimize erosion (see Pic. 1). The <br />drainage channels were generally clear of debris and there was no damage observed to any of <br />the channel sections. <br />There was only minimal stockpiled material on top of the embankment (see Pic. 2). The face of <br />the embankment was in good condition and does not show any signs of excessive erosion, <br />instability or weakness (see Pic.3). <br />There is a single trailer stored on the site near the old bath house. The only structure with any <br />proximity to the embankment material is the old bath house which is no longer utilized and is <br />abandoned. Personnel are only on-site to bring and/or place material on the embankment or <br />for mine rescue training. The mine rescue training is performed on the north side of the site <br />well away from the embankment material. The site is closed to the public and there is a locked <br />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 11 facility. <br />P.O. Box 1163 28 South Washington Street Cortez, Colorado 81321 <br />970,565.7483 stonerenoineer@frontier.net 970.565.7704 <br />