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i. .~ Colowyo Mine, pg. 3 Checked for permit boundary markers east of highway 13, and found them to be adequate. We inspected the other sediment ponds down-slope from the eastern disturbed and reclaimed areas. Gulch A pond was inspected, and Streeter pond was inspected and had a clear minimal discharge today. We next inspected the seismograph location on the west side of the mine off the permit area in the Wilson Creek area. We inspected the topsoil replacement at the east pit, 18 inches of topsoil is required. Colowyo worked to maximize their live handling of topsoil this year. We inspected the highwall miner operation in the west pit. This concluded the field inspection. On October 27 Mr. Walker conducted a very thorough office review of environmental monitoring and permitting records. Our review included the following: 30 CFR, Part 865 notice has been made to all Colowyo employees by their human resources department, current DMG permit term is 11/5/2002 through 11/5/2007 and there are no stipulations on this permit renewal that have not previously been satisfied, we reviewed Mr. Walkers previous inspection reports and noted maintenance items that have been resolved since the last DMG inspection, briefly reviewed DMG notice of violation CV-2004-001 issued 6/22/2004 for a violation of BLM coal ]ease provisions (trespass mining on un-]eased federal coal), we reviewed all quarterly inspection / RPE certification requirements including west pit excess spoil fill area, Streeter fill, quarterly inspections and annual recertification of sediment ponds and water impoundments were current through 2004, CDPHE / NPDES permit CO-45161 was reviewed and a 10/20/02 Colowyo letter to CDPHE reports non-compliant discharge(s) (settleable solids) from Prospect pond discharge(s) in July and August 2004 (this is mentioned above in the opening paragraph- the DMG/OSM oversight team will discuss these discharge events for possible offsite impact), quarterly spring, seep, and groundwater well monitoring and reporting appeared to be in order-groundwater wells were sampled for the 3rd quarter on 8131/04 and required surface water-stream sampling was conducted 9/16/04, liability insurance is current through 5/31/05, current bond (Liberty Mutual) has been updated through 10/8/04 in the amount of $19,500,000.00, annual reclamation reporting is current, and we reviewed recent blasting records that were in order. We held a productive close out meeting with Colowyo mine managers and discussed the results of the inspection and other items of interest regarding routine sediment pond maintenance, permit requirements, raptor study requirements, and future mine planning and permitting. This concluded the inspection. Please address any questions concerning this report to Henry Austin at haustin@osrru-e.~ov or to (303) 844-1400 x1466.