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July 12, 2006 Seneca Coal Company (SCC} P.O. Box 670 Hayden, CO 81639 Yoast Mine Complete inspection June ZZ, 2006 Participants: Dennis Jones, SCC Mike Boulay, Colorado Division of Minerals and Geology (DMG} Henry Austin, Office of Surface Mining (OSM) I participated in a complete inspection of the Yoast Mine with the above participants. This mine was selected by the joint DMG / OSM Oversight Team for evaluation during 2006. Weather conditions were hot and dry with localized showers in the area and ground conditions were dry. This inspection focused on offsite impacts. No offsite impacts were identified during the inspection. Mr. Boulay began the inspection by orienting the participants with appropriate maps from the approved DMG permit that we also took into the field for our use during the evaluation, and outlining the order of the different mine areas we would evaluate during the inspection. We also discussed the major permit revision SCC submitted to DMG for the Yoast Mine to revise the final reclamation plan. SCC determined during the fall of 2004 to phase out stripping operations at the Yoast Mine. Coal removal ceased at the end 2005, and the majority of SCC equipment is currently working at the Yoast Mine completing topsoil replacement on final graded areas. There is only one small area directly above sediment pond 12 that has yet to be final graded. Final reclamation will be completed here within 2-3 weeks and the SCC equipment fleet will then move to the Seneca II West mine to complete the remaining reclamation there. SCC also plans to complete final reclamation at the Seneca II West mine during 2006 also. Our first stop was at the pond 11 and 11 a watershed and we walked post mine channel (pm) 12 down to pond 11. The channel erosion repair, stilling basins, vegetation filters, etc., that were constructed here 2 years ago remaining in place and effective for stabilizing this drainway. We noted several Canada thistle and hounds tongue infestations a]ong the drainway that need to be treated this growing season. Pond 11 embankment and spillway area appear stable; the pond was full to capacity, and just barely discharging clear water. We made additional inspected stops and observations at the following: pond 10 was stable, full to capacity, and barely discharging clear water. Lower Annan drainway appears stable and the rock check dams have been effective in trapping and retaining sediment. We discussed whether these structures should have the sediment removed or allowed to reclaim themselves within the channel. The upper structure contains lots of coarse gravels and heavy sediments and probably should be left in place to reclaim itself within the channel flow system.