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XBOW MlN/NG,LLC ,^ <br />SECOND QUARTER 2006 <br />The approved Oxbow Mining, LLC (OMLLC) Mine permit includes a requirement for quarterly inspections of <br />coal mine waste piles for stability. The inspection is to be performed by a registered engineer or other qualified <br />professional specialist, who is experienced in the construction of earth and rockfill embankments. On June 3Q <br />2006 visual inspections were performed of the East Yard, West Valley Fil] and II West coal mine waste <br />disposal aeeas. <br />EAST YARD -The East Yazd disposal area has reached its design capacity, and no new waste material has <br />been placed since June of 2001. The revegetated slope was inspected for signs of erosion or instability and <br />vegetation establishment. No erosional features were noted requiring repairs to revegetated aeeas. To cover the <br />remaining portion of the pile (ramp azea), additional topsoil substitute material (approximately 410 cy) has been <br />placed on the pile access ramp working from east to west. The covering of the waste pile is considered <br />complete. The ramp will be seeded in the coming fall. Nothing was observed during the inspection that would <br />indicate the pile has a potential for structural failure. Safety berms continue to be required by the Mine Safety <br />and Health Administration on the remaining downhill edge of the access ramp. <br />WEST VALLEY FII,L -The West Valley Fill had received additional waste material (approx 3,580 cy) during <br />the second quarter of 2006 up to the approximate 6224' elevation. Compaction tests are required, as necessary, <br />based upon the amount of material added to the waste area. Three (3) compaction tests were conducted (on <br />5/02/06) demonstrating compliance with the design requirements. A copy of the fmal test report is attached. <br />The revegetated outslope located between the Fill slope toe to the approximate 6200 elevation was inspected <br />for signs of erosion and instability. No erosional features were noted requiring repairs to any vegetated areas. <br />The third bench (approximate 6200 elevation) setback remains established in preparation for the final lift of <br />waste material and the ramp constructed on the waste pile to provide access to the II West Coal Refuse Facility <br />light use road and haul road. These two roads continue to be utilized. No springs or seeps were noted. Surface <br />drainage control features aze performing according to the plan. Nothing was observed during the inspection that <br />would indicate the West Valley Fill has a potential for structural failure. <br />II WEST - No coal mine waste material has been hauled to II West. The status of the area remains as initial <br />construction with initial topsoil removal, light use road and haul road use. <br />3737 Hwy 133 P.O. Box 535 Somerset, Colorado 81434 USA <br />TEL (970) 929-5122 FAX (970) 929-5777 <br />ENGINEERING INSPECTION <br />EAST YARD, WEST VALLEY FILL AND II WEST <br />COAL MINE WASTE DISPOSAL PII,ES <br />