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<br />October 3, 1997 <br />Lorencito Coal Company, LLC <br />c/o Greystone <br />5990 Greenwood Plaza Boulevard, Suite 250 <br />Englewood, Colorado 80111 <br />Attention: Mr. Jerry Koblitz <br />Subject: New Elk -Coal Development Waste Pile <br />Lorencito Mine <br />Las Animas County, Colorado <br />Job No. 26,600 <br />Gentlemen: <br />0 <br />At your request we have reviewed our previous compaction testing at the New <br />Elk Coal Development Waste Pile. On September 6, 1997 we observed pile <br />conditions and excavated four test pits to obtain samples for laboratory testing. <br />Following is a discussion of the documents reviewed, the results of our previous <br />• compaction testing, and the results of our current test pit investigation. Following <br />sections discuss our opinions regarding the stability of the pile, the suitability of <br />placing pond dippings or ditch cleanings on the pile, alternative placement <br />recommendations for these material, and recommendations for future testing. <br />Compaction Testing <br />CTLIThompson, Inc. has performed compaction testing at the New Elk Coal <br />Waste Development Pile at approximately 3-month intervals in June, September, <br />November of 1995, and March of 1996. Around March 1996 mining operations were <br />ceased and additional coal waste has not been placed on the pile. The results of the <br />compaction testing are included in Appendix A. The compaction testing indicated <br />satisfactory compaction (greater than 90 percent of maximum dry density ASTM D <br />698). An exception was the last set of tests pertormed in March 1996. At this time we <br />recommended re-working of the surface of the pile and additional compactive effort <br />to obtain satisfactory compaction. <br />Test Pit Investigation <br />In September 1997 we visited the site to excavate test pits and observe pile <br />conditions. Test pit locations are shown on Fig. 1. At the time of our visit the surface <br />of the pile was approximately 120 feet wide. <br /> <br />CTL/THOMPSON, INC. <br />CONSULTING ENGINEERS <br />1971 WEST 12TH AVENUE ~ OENVER, COIORAD080204 ~ (303) 825-0777 <br />