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III. COMMENTS -COMPLIANCE Colovryo C-1981-019 25 July 2006 ~~ Pg 1 /7 Below are comments on the inspection. The comments include discussion of observations made during the inspection. Comments also describe any enforcement actions taken during fhe inspection and the facts or evidence supporting the enforcement action. This was a complete inspection of the Colowyo Mine conducted by Jim Stark of CDMG. The inspection was conducted on 25 and 26 July 2006. Records were checked on the afternoon of 25 July 2006. Tony Tennyson accompanied me on 25 June 2006 and the morning of 26 July 2006, Tay Tonoai accompanied me on the afternoon of 25 July 2006 and the afternoon of 26 July 2006 and Andy Thompson, the dragline engineer, accompanied us on the afternoon of 25 July 2006. Tay Tonozzi was present on the morning of 25 July 2006 to discuss ongoing and future permitting actions. The mine was actively mining coal and hauling coal to the loadout at the time of the inspection. A train was being loaded on the morning of 25 July 2006. The weather was warm and overcast and the ground was dry. On the morning of 25 July 2006 Tay Tonoai and I discussed current and future permitting actions. On 3 July 2006 the Division received Permit Revision 02. PR-02 was called complete on 13 July 2006. PR-02 proposes to incorporate an additional 6,050 acres into the permit boundary and allow for mining in the South Taylor Creek area. The revision proposes mining up to 17 seams of coal and includes plans for highwall mining. There are still three outstanding Technical Revisions at the Colowyo Mine. Technical Revision 63 proposes a new post-mining topography for West Pit and'the unreclaimed areas of the East Pit. Included with this revision are changes to the designs of the post-mining drainage channels. Technical Revision 64 proposes to suspend the quarterly monitoring requirements for the Streeter Fill and the Section 16 Fill (excess overburden stockpiles). Phase I and Phase II bond releases have been approved for both of these fills. Technical Revision 65 proposes expanding mining in the Section 16 Pit to the south, eventually meeting up with the proposed South Taylor Pit. While at the Colowyo Mine the operator hand-delivered the responses to Technical Revision 63 and the second quarter 2006 DMR's. Availability of Records: -The records were checked on the afternoon of 25 July 2006. All of the necessary were available at the mine's office. Kurtis Blunt of CCC hand delivered the second quarter 2006 DMR's at the time of the inspection. See the DMG Availability of Records checklist attached at the end of this inspection report for more details. Signs and Markers: -All of the necessary signs (including mine ID signs, disturbed boundary signs, stream buffer signs and blasting signs) were in place as required and contained all of the necessary information.