2017-01-30_INSPECTION - M1996076

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PERMIT #: M-1996-076 INSPECTOR'S INITIALS: SJM INSPECTION DATE: January 18, 2017 OBSERVATIONS This inspection was prompted by an inquiry and proceeded by a follow up letter from Tonya Hammond, Owners Representative of SnowCap Coal Company/ J.E. Stover and Associates, Inc. The inquiry stated that both drilling activities and test pits were conducted both within the permit boundaries of Western Slope Flagstone (M-1986-076) and outside permit boundaries. J.E. Stover and Associates requested Plug and Abandonment reports for said drill holes. The Division did not have a record of drilling activities within the permit area, nor received a Notice of Intent (NOI) to prospect outside of the permit boundary. Mr. Trevor Gross and Mr. Rudy Fontanari representing Western Slope Flagstone and Russ Means, Jim Stark and Clayton Wein of DRMS accompanied me on the inspection. Photographs are included at the end of this report in order to illustrate some of the conditions observed during this inspection. The Western Slope Flagstone Pit is located approximately 2 miles northeast of Palisade and accessed from Rapid Creek Road. The main entrance is located off of Interstate 70. The site is a 112c operation that includes a total of 141.92 permitted acres, with the maximum disturbed acreage at 22.50 acres. According to Mr. Fontanari, drilling activities and test pits were dug to estimate the resources under an easement/right of way that crosses the Fontanari property with Xcel Energy. Drilling took place in the Fall of 2015. This easement/right of way is for a powerline managed by Xcel Energy. Xcel increased the easement from 25 feet in width to 50 feet in width to replace existing power poles with new ones, thus the increase in width of easement/right of way. Drilling was conducted adjacent to the power poles to estimate the amount of resource within the new boundaries of the easement. According to Mr. Fontanari, fifteen drill holes were drilled, ranging from 20 -50 feet in depth and 4 inches in diameter. Drilling was conducted by Steve Kissinger of Kissinger Drilling, according to Mr. Fontanari. The holes were plugged with drill cuttings and cement. There was very little evidence of the drilling that took place. The footprints of the drill pads were less than 100 square feet each. Six drill holes were reported within the permit boundary and nine were on Mr. Fontanari's property outside of the permit boundary. One Test pit was dug at the base of a pond estimated to be 37 feet deep located on property belonging to a Mr. Jason Carey. The test pit was backfilled at the time of inspection. The pond, however, was dry. The second test pit was estimated to be 4 feet wide by 10 feet long by 27 feet deep. The second test pit is located on Mr. Fontanari's land. At the time of inspection the second test pit was backfilled and reclaimed. The drilling activity outside of the permit boundary is estimated to be less than 950 square feet of surface disturbance. Due to the limited disturbance (ie.,<1,600 sq. ft.) the Division does not require a Notice of Intent (NOI) to prospect at this time. The Division also concluded that the drilling and test pits were assessment work related to the easement/right of way for the Xcel power line, not directly related to any future mining activities. For the drilling activity within the permit boundaries of Western Slope Flagstone, the Division is requesting a Technical Revision to revise the Mine and Reclamation Plans to include the change that exclude mining in the new easement areas, maps of the location of the drill holes, and any Plugging and Abandonment reports for drill holes completed. The updated maps need to reflect the new easement location parameters with Xcel Energy, as well as any commitments for buffer zones that exclude mining for stability reasons. This is noted at as a problem at the beginning of this inspection report with a corrective action date of 3/24/2017. Page 2 of 5