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August 24, 2010 C-1981-019/Colowyo Coal Mine J <br />Inspection Topic Summary <br />NOTE: Y=Inspected N=Not Inspected R=Comments Noted V=Violation Issued NA=Not Applicable <br />N - Air Resource Protection R - Roads <br />N - Availability of Records R - Reclamation Success <br />R - Backfill & Grading R - Revegetation <br />N - Excess Spoil and Dev. Waste N - Subsidence <br />N - Explosives N - Slides and Other Damage <br />R - Fish & Wildlife N - Support Facilities On-site <br />R - Hydrologic Balance N - Signs and Markers <br />N - Gen. Compliance With Mine Plan N - Support Facilities Not On-site <br />R - Other N - Special Categories Of Mining <br />N - Processing Waste R - Topsoil <br />COMMENTS <br />- This was a Partial Phase I/II/III Bond Release for the Colowyo Mine conducted by the Colorado Division of <br />Reclamation, Mining and Safety. The inspection was in response to Colowyo's Partial Phase UII Bond Release <br />application SL-04 and their Partial Phase III Bond Release application SL-05. The inspection was conducted on <br />24-26 August 2010 with a close-out meeting conducted on the morning of 27 August 2010. Jim Stark, Sandy <br />Brown and Dan Mathews of the Division, Kurtis Blunt and Jennifer Sekulski of Colowyo and Steve Viert and <br />Jesse Dillon of Cedar Creek Associates were present for the inspection. The weather was warm and sunny and the <br />ground was dry during the inspection. <br />The Phase I, II and III Bond Release areas are shown on Inspection Maps 1, 2 and 3, respectively. This inspection <br />report details the observations from the field as well as the data obtained with the Trimble GeoXT handheld GPS <br />unit. The Division will also conduct an office review of the vegetation data submitted as part of the Phase II and <br />III Bond Release and the sediment loss data submitted as part of the Phase II Bond Release. The Division will <br />forward any comments regarding this data to Colowyo under separate cover. The current proposed decision date <br />for the SL-04 and SL-05 Bond Release applications is 26 October 2010, although this could be extended based on <br />the data review and possible adequacy questions. <br />BACKFILL and GRADING - Rule 4.14 Contemporaneous Reclamation 4.14.1; Approximate Original Contour <br />4.14.2; Highwall Elimination 4.14.1(2)(f); Steep Slopes 4.14.2, 4.27; Handling of Acid and Toxic Materials <br />4.14.3; Stabilization of Rills and Gullies 4.14.6: <br />- Colowyo has applied for a Phase I Bond Release for portions of the East Pit, West Pit and Section 16 Pit. These <br />areas were inspected to determine if Colowyo has backfilled and regraded the areas to the approved post-mining <br />topography, as shown on Map 19. Numerous grade points were taken in these areas during the Division's 19 July <br />2010 inspection and the 24-26 August 2010 inspection. The following tables show the location s and elevations of <br />these points. These points are also shown on Inspection Maps 4, 5 and 6 as well as their associated cross-section <br />and data tables (all attached at the end of the inspection report). <br />Number of Partial Inspection this Fiscal Year: 3 <br />Number of Complete Inspections this Fiscal Year: 0 <br />Page 2 of 39