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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 quarterly inspection of the McClave Canyon Mine. Operator contact Rodney Head was present during the mine site inspection. Weather was clear and mild. One item of concern was discussed with operator representatives Walter Whitledge and Rodney Head prior to the mine site inspection. The issue discussed was the pending permit transfer from Lodestar Energy Incorporated (LEI) to Central Appalachia Mining (CAM). The federal coal leases have been assigned to CAM, as a consequence of the LEI bankruptcy proceedings, but the lease assignments have not been approved by BLM. The Division may not be able to approve the permit transfer until BLM approves the lease assignment to CAM. BLM has not approved the assignment, because of a royalty payment default by LEI. The operator representatives stated that CAM was willing to pay the required amount, but they had received conflicting information from Minerals Management Service (MMS) regarding the amount owed. Following the inspection, I contacted Karen Purvis of the BLM State Office, Solid Minerals Branch. Ms. Purvis stated that she also had received conflicting information from Minerals Management Service (MMS) regarding the royalty amount that would need to be paid. She indicated that the royalty issue was limited to Loose #0125439, and she further stated that the issue could be resolved in one of two ways; CAM could pay the required amount or CAM could refuse to pay and the amount could be taken from the lease bond. I passed this information along to my superiors in the Denver office. Availability of Records Required records were on file and up to date through the 3r° Quarter, 2003. Refer to the attached DMG AVA/LABILITY OF RECORDS form. Roads The haul road was properly maintained. Coal was being loaded and hauled during the inspection, and the road and coal handling areas were properly watered to suppress dust. Hydrologic Balance Water level in the sediment pond was approximately 3 feet below the primary spillway elevation. Maintenance items noted in the previous inspection report had been addressed. Specifically, a small quantity of pond cleanout material had sloughed over the berm of the designated containment area. This material had been properly cleaned up and the stored material had been properly moved back away from the berm. Also, the office area silt fence had been re-set and rocky material had been placed immediately in front of the silt fence to prevent undercutting. However a small hole was observed in the silt fence material at the north end. The silt fence will need to be repaired or replaced.