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STATE OF COLORADO DIVISION OF MINERALS AND GEOLOGY Department of Natural Resources 1313 Sherman St., Room 215 Denver, Colorado 80203 Phone: (303) 866-3567 FAX: (303) 832$706 Date: December 12, 2005 To: David A. Berry, Coal Program Manager From: Daniel I. Hernandez, Senior Environmental Protection Specialist RE: Status of Mountain Coal Company Compliance with DMG Letter Of December 1 2005 Pertaining to Lay-Down Area and Fire-fighting Foam Spill in Section 31, T13S, R90W, Gunnison County, Colorado OLORADO ( V I S I O N O F IIN SRALS EOLOGY BiII Owens Governor Russell George Executive Director Ronald W. Cattany Division Direttor Natu21 Resource Trustee Mountain Coal Company (MCC), permittee of the West Elk Mine in Gunnison and Delta Counties, informed DMG on October 21, 2005 that they were "dealing with a spon corn circumstance" in the mine's underground workings. MCC discussed the need for surface borehole drilling for the purpose of injecting water, nitrogen and fire-suppressant foam into the mine so as to control the circumstance. MCC subsequently submitted, and DMG reviewed and approved, several revisions to the West Elk Mine permit in support of these activities. On November 14, 2005, MCC informed us that during the weekend of November 12-13, 2005, a rainstorm had knocked over six empty barrels offire-suppressant foam concentrate stored at a "lay- down area" near the Dry Fork of Minnesota Creek, and that rain had transported foam concentrate residue from the barrels into the Dry Fork. MCC informed us that the presence of foam in downstream Minnesota Creek had been reported to MCC during the morning of November 12, 2005 by the Delta County Sheriff's Office and the US Forest Service's Paonia Ranger District Office. On November 15-16, 2005, DMG inspected the "lay-down area" and the potentially affected sections of Minnesota Creek and the Dry Fork of Minnesota Creek. DMG determined that the presence of the foam concentrate was not visible in the streams at that time; that activities occurring at the lay-down area were related to coal exploration, mining, and fire-fighting activities; and that the "lay-down area" was not described in the West Elk Mine permit or aDMG-approved NOI. DMG sent a letter to MCC dated December 1, 2005 directing them to conduct six measures by certain dates to address these matters. The following describes the status of MCC's compliance with these measures: Measure #1: Submit an NOI or an NOI Amendment for the Lay-Down Area Due Date: 12/9/05 Status: Complied With Ahead of Due Date MCC was directed to submit either an NOI or an amendment to an existing NOI that adequately addressed all exploration-related activities occurring, or anticipated to occur, at the lay-down area. An amendment to existing NOI CX-2005-212-006 was submitted on 11/17/05, Office of Office of Colorado Mined Land Reclamation Active and Inactive Mines Geological Survey