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est Geotechnical /Environmental Engineering • Materials Testing Apri14, 2005 Twentymile Coal Company 29515 RCR #27 Oak Creek, CO 80467 Attn: Mr. Jerry Nettleton Job Number: 99-3983 Subject: Quarterly Observation Report, Refuse Pile, Foidel Creek Mine, Routt County, Colorado. Mr. Nettleton, As requested, NWCC, Inc. has prepazed this report outlining our observations made during the first quarter of 2005 at the Refuse Pile, which is located at Twentymile Coal Company's (TCC) Foidel Creek Mine in Routt County, Colomdo. During this quarter, we visited the project site on March 31, 2005 to provide our quarterly inspection/observations. At the time of our site visit on Mazch 31, 2005, we completed a site inspection of [he pile with Mt. Jerry Nettleton of Twentymile Coal Company. Based on our observafions made during this visit, it appeazed that the contractor was presently stockpiling'the refuse coal in Area 2 of the pile. Based on our discussions with Mr. Nettleton, It also appeared that they had recently knocked down and graded out the stockpiles of refuse coal that had been placed in Area 2'h. The surface drainage conditions observed in Area 2'/z appeared to be adequate. Howevez, approximately 2 to 12 inches of standing water was observed at the northwest corner of Area 2%z and along the east side of the temporary access/haul road at the west side of the pile. We recommended that a ditch or culvert be placed across the temporary road so that the standing water is allowed to flow into the designated drainage channel at the extreme western edge of the pile. At the time of our visit, we did not observe any signs of instability, structural weakness or hazardous conditions at the pile. However, it should be noted that the site was covered with approximately 1 to 4 inches of snow at the time of our site visit, which limited our observations. As suggested, the water levels in the monitor wells installed on October 23, 1997 and December 9, 1999 were measured during this quarter on a monthly basis. A table and graphs showing the monthly water levels aze attached. We were advised that the mine had produced approxitrtately 25, 972 cubic yazds of waste coal during the month of January 2005: 25,603 cubic yards during February 2005: and approximately 29,365 cubic yazds during Mazch 2005. It is our understanding that the fines being produced at the wash plant, which consists of 10 to 20 percent of the total materials being produced, aze being pumped underground into the mine. (970) 879-7888 • Fax (970) 879.7891 2580 Copper Ridge Drive • P.O. Box 775226 • Steamboat Springs, CO 80477