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III. COMMENTS -COMPLIANCE Below are comments on the inspection. The comments include discussion of observations made during the inspection. Comments also describe any enforcement actions taken during the inspection and the facts or evidence supporting the enforcement action. This was a complete inspection of the New Horizon Mine conducted on September 20, 2006 by Mike Boulay of the DMG. Ross Gubka of Western Fuels-Colorado (WFC) was present during the entire inspection. Weather conditions were cloudy and cool. Ground conditions were initially dry at the site. Part way through the inspection, it began raining fairly heavy with significant lightening. No coal was being loaded or hauled from the mine at the time of the inspection, because the Nucla power plant was shut down for planned maintenance. Therefore the mine site was also shut down and there was very little activity at the site. WFC had a crew drilling exploration holes at an off-site location north of the mine site. The crew had to stop for the day due to the rainstorm. Availability of Records All required records were on site and available for review. Please see the attached records checklist at the end of this inspection report. Signs and Markers Mine identification signs were properly displayed at mine site entrances. Topsoil mazkers and permit boundary mazkers were in place where required. Roads Haul roads and access roads were maintained and in good condition throughout the site. Road ditches were very well maintained. WFC did a good job at making the required repairs to Ditches C11 and C17 following the July 10'" rainstorm that damaged the ditches. WFC also conducted maintenance on all road ditches site wide. The rainfall event that occurred on the afternoon of this inspection did not produce enough runoff to create flow in any of the containment ditches. Hydrologic Balance Sedimentation Ponds 007, 008, 009, and 014 were viewed during this inspection. Pond 007 was the only pond dischazging. Discharge from this outfall is primarily the result of water being pumped from the pit. Pond 008 was retaining a significant amount of water but not dischazging. Ponds 009 and 014 were essentially dry. Pond 012 could not be accessed due to the muddy conditions resulting from the rainstorm. Pond inlets, embankments and dischazge structures were stable at Ponds 007, 008, 009, and 014. The pit area was inspected and water was being pumped from the pit at the time of the inspection.