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July 27, 2011 <br />Inspection Topic Summary <br />NOTE: Y= Inspected N =Not Inspected R= Comments Noted <br />N - Air Resource Protection <br />N - Availability of Records <br />Y - Backfill & Grading <br />N - Excess Spoil and Dev. Waste <br />N - Explosives <br />N - Fish & Wildlife <br />Y - Hydrologic Balance <br />N - Gen. Compliance With Mine Plan <br />N - Other <br />N - Processing Waste <br />C -1981- 022 /Elk Creek Mine <br />V= Violation Issued NA =Not Applicable <br />Y - Roads <br />N - Reclamation Success <br />N - Revegetation <br />N - Subsidence <br />N - Slides and Other Damage <br />Y - Support Facilities On -site <br />Y - Signs and Markers <br />N - Support Facilities Not On -site <br />N - Special Categories Of Mining <br />Y - Topsoil <br />COMMENTS <br />BFB <br />INTRODUCTION: <br />This was a partial inspection of the Elk Creek Mine conducted by Brock Bowles and Sandy Brown of the <br />Colorado Division of Reclamation, Mining and Safety on July 27, 2011. Jim Kiger, Environmental Manager for <br />Oxbow Mining, LLC (OMLLC) was present for the entire inspection. The weather condition was sunny and <br />warm with afternoon thunderstorms. The ground conditions were dry. Gob vent borehole drill pad sites were <br />inspected. <br />HYDROLOGIC BALANCE: <br />Drainage Control 4.05.1; Siltation Structures 4.05.5, 4.05.6: <br />Drill pad site GVB- 17 -02B and GVB -17 -08 were inspected. Site GVI3- 17 -02B was recently drilled and was being <br />prepared for degassing operations. A clean water diversion ditch was not noticed above the drill pad site but a <br />runoff sediment control berm with waddles was installed below the site (photo 1). The mud pit was full of water <br />and surrounded by a sediment control berm and an orange safety fence (photo 2). At site GVB -17 -08 the drillers <br />had just completed installing the last steel casing. The mud pit was full of water and no spillage was noted. <br />ROADS: <br />Construction 4.03.2(3), 4.03.3(3); Drainage 4.03.2(4), 4.03.3(4); Surfacing 4.03.2(5), 4.03.3(5); Maintenance <br />4.03.2(6), 4.03.3(6): <br />The Bear Creek access road and the light used roads to the drill pads sites were inspected. Bear Creek access road <br />was rough but passable. The light use roads were stable, rough yet passable for equipment. Drainage from the <br />access roads is routed to low spots along the road. The operator was reminded to maintain straw bales or other <br />control measures to minimize off -site sedimentation. <br />SUPPORT FACILITIES 4.04: <br />Number of Partial Inspection this Fiscal Year: 1 <br />Number of Complete Inspections this Fiscal Year: 0 <br />Page 2 of 6 <br />