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September 21,2010 C-1982-057/Seneca II-W Mine JRS GaJ Inspection Topic Summary NOTE: Y=Inspected N=Not Inspected R=Comments Noted V=Violation Issued NA=Not Applicable N -Air Resource Protection R -Roads N -Availability of Records R -Reclamation Success R -Backfill&Grading R -Revegetation N -Excess Spoil and Dev. Waste N - Subsidence N -Explosives N - Slides and Other Damage N -Fish&Wildlife R - Support Facilities On-site R -Hydrologic Balance N - Signs and Markers N -Gen. Compliance With Mine Plan N -Support Facilities Not On-site R -Other N - Special Categories Of Mining N -Processing Waste R -Topsoil COMMENTS This was a partial inspection of the Seneca II-W Mine conducted by Jim Stark and Dan Mathews of the Colorado Division of Reclamation,Mining and Safety(Division). SCC and permit area landowners, as well as the Office of Surface Mining(OSM) Denver Office, and the Bureau of Land Management(BLM) Little Snake Field Office, had been notified of the inspection. Christy Hulsman of the Office of Surface Mining, Jennifer Maiolo of the Bureau of Land Management and Jay James of Seneca accompanied us on the inspection. The weather was warm and overcast and the ground was dry. The purpose of this inspection was to conduct a Partial Phase I Bond Release(SL-03)inspection at the Seneca II- W Mine. The mine submitted an application for SL-03 on 14 July 2010. The Division deemed the application complete on 26 August 2010. The application was for the Phase I Release of approximately 414 acres of lands, mostly in the south extension portion of the mine. There were also several small areas in the north portion of the mine that were excluded from previous bond releases that were included in SL-03. Please see the individual inspection topics below for more detailed information regarding all of the SL-03 areas.The majority of the area requested for release was walked during the inspection. All of the data used to confirm the post-mining topography and permanent,post-mining drainage channels was collected with a Trimble GeoXT handheld GPS and Trimble Terrasync software. The data was analyzed with Trimble Pathfinder Office 3.1,ESRI ArcMap 9.3 and Microsoft Excel 2007. Prior to collecting data on 21 and 22 September 2010,an elevation correction point was taken at a known, surveyed point on the mine site and used to correct all of the elevation data collected by the Trimble GeoXT. The point the Division used was Seneca II-W survey point 3008, elevation 8076.82 feet,which is shown on the attached Inspection Maps 1 and 2. The Division's measured elevation at this point was 8036.2 feet. This gives a correction of+40.62 feet for all of the Division's measured elevation points. For the data review portion of the inspection(completed in the office)the Division reviewed Seneca II-W permit information including the approved Postmining Topography and Drainage Map, Exhibit 20-2—Post-Mining Topography and Drainage(engineer certified 28 August 2007 with TR-59 and 12 May 2010 with TR-68); the approved Postmining Channel Profiles for II-W South Exhibit 20-5.9, sheet 1 (engineer certified 30 January 2006 with PR-05); Exhibit 20-5.9 sheet 2(engineer certified 28 August 2007 with TR-59),Tab 20,Attachment 20- 1 —Post-Mining Drainage Channel Designs(revised May 2007 with TR-59)and SL-03 Exhibit D—As-Built Drainage Profiles(engineer certified 9 July 2010). Number of Partial Inspection this Fiscal Year: 3 Number of CoMete Inspections this Fiscal Year: 2 Page 2 of 18