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July 8, 1998 Bowie Resources Limited P.O. Box 483 Paonia, CO 81428 Bowie No. 2 Mine complete, joint, oversight inspection partial, special focus insp. of haulroads lone 30 and July I, 1998 Participants: William A. Bear, Jr., Bowie Resources Limited (BRL) Jce Dudash, Colorado Division of Minerals and Geology (DMG) Henry Austin, Office of Surface Mining (OSM) 1 participated in a joint, complete, oversight inspection of the Bowie No. 2 Mine with the above participants. We also conducted a special focus inspection directed specifically at surface water runoff impacts from haulroads. Both inspections were conducted on June 30, and I resumed unaccompanied briefly on July 1 to make additional observations of the main haulroad entrance to the mine and roadside ditches along old State Highway 133. Weather conditions were hot and dry and ground conditions were dry throughout the mine. Mr. Dudash began the inspection by conducting an office review of required permitting and environmental monitoring documents. We also reviewed previous DMG inspection reports. Documentation reviewed included the following: The portal haulroad (main haulroad and mine access road) was RPE certified on 11/3/97 and [he gob pile haulroad was RPE certified on 1!9/98 (DMG required additional information for the gob pile haulroad certification and it is currently under review). Pond D (gob pile pond) as-built certification was checked by Mr. Dudash on 5/2l/98, pond B & C certifications checked by Mr. Dudash on 7/15/97, and all ditch designs on the mine site have been verified as adequate by Mr. Dudash. Permit stipulations 1 through 3 are ongoing and BRL hopes to have no. 4 (sewage treatment plant) requirements approved/permitted by late Summer and construction Fall of 1998. Stip 5 was terminated via approval of MR no. 6 (culverts on main haulroad). TR no. 2 is currently under review which proposes to add two tracts of additional coal, including Federal coal, and will make Bowie No. 2 a Federal mine. OSM Federal lands permitting branch (Larry Kline) has been notified of TR no. 2. NPDES permit is effective 7/1/97 through 6/30/2002 and includes outfalls for ponds B, C, and D. The sewage treatment plant will need to be added when it is approved. The stormwater management plan containing the spill prevention and control plan is on file as required. First quarter 1998 DMR's have been submitted indicating no discharge from the three ponds. First quarter gob pile inspections and compaction testing have been completed and RPE certification and photos of the underdrain system are contained in the fourth quarter 1997 inspection of the pile. Sediment pond quarterly inspections are current through the first quarter of 1998. Liability insurance is current through August 1998.