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July 14, 2010 X-2010-232-00/New Elk Mine 2010 Exploration Program KAG <br />GENERAL MINE PLAN COMPLANCE - Rule 2.02(g) and 4.21.2(2): <br />This was a, coal exploration partial inspection conducted by Kent Gorham of the Colorado Division of <br />Reclamation, Mining and Safety. Al Weaver represented NECC. The weather on this day was warm and <br />ground conditions were dry. Activities as proposed were approved to commence as of July 9, 2010 under <br />this Notice; of Intent. <br />Drill site NE-12-10 is located generally at the confluence of the Right Fork and the Left Fork of Apache <br />Canyon, near the lower ventilation shaft of the New Elk Mine. The site is immediately adjacent to the <br />ephemeral stream channel in Apache Canyon. The disturbed area created by the operation was found <br />reclaimed, mulched and apparently reseeded. The site appeared to have been hydroseeded. Seeded <br />grasses were noted growing from the revegetated area, indicating reclamation likely occurred a number of <br />weeks prior to this inspection. Long erosion control wattles constructed of netting filled with wood chips <br />were observed around the perimeter of the reclaimed area. Many of the wattles have been disrupted and <br />scattered, likely by large animals. The operator should repair and re-position these wattles as soon as <br />possible. Other than the wattles, the site appeared in excellent condition. <br />Number of Partial Inspection this Fiscal Year: 0 <br />Number of Complete Inspections this Fiscal Year: 0 <br />Page 3 of 4 <br />Site overview, looking downstream from gate Scattered wattles between site and stream channel