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September 12, 2011 <br />X- 2006 - 223 -07 /Oxbow 2006 North Elk Creels License KAG <br />Inspection Topic Summary <br />NOTE: Y= Inspected N =Not Inspected R= Comments Noted V= Violation Issued NA Applicable <br />N - Air Resource Protection <br />N - Backfill & Grading <br />N - Fish & Wildlife <br />N - Hydrologic Balance <br />N - Gen. Compliance With Mine Plan <br />N - Other <br />N - Roads <br />R - Reclamation Success <br />N - Revegetation <br />N - Slides and Other Damage <br />N - Signs and Markers <br />N - Topsoil <br />COMMENTS <br />RECLAMATION SUCCESS - Rule 2.02(a) and 4.21.20: <br />This was a bond release inspection for coal exploration activities conducted under a Notice of <br />Intent (NOI) for exploration of coal involving the removal of 250 tons or less. Jim Kiger, <br />Environmental Manager at Oxbow Coal Company, was present during the inspection. All <br />reclaimed roads and drill sites included in this Notice of Intent (NOI) are located south of the <br />mine facility area in rugged terrain on lands owned by Oxbow Coal Company, BLM, US Forest <br />Service, and private interests. A sampling of reclaimed roads and drill sites were observed by <br />pedestrian survey as well as viewed for a distance on an opportunistic basis. In many cases, <br />reclaimed exploration roads and sites are comingled with methane degas disturbances covered <br />by the Oxbow mining permit and bond. For specific details, please refer to the NOI Final <br />Reclamation Report. <br />It appears that sites under this NOI may have been drilled in 2006 but were permitted through <br />the 2004 and 2005 NOI programs. One site attributed to X- 2006 - 223 -07 is site ECM - 2004 -38, <br />located on lands owned by Hotchkiss Ranches. Observations of this site were included in the <br />report for NOI X- 2004 - 223 -05. <br />Three sites were reclaimed under this NOI as per the Final Reclamation Report; ECM- 05 -19, <br />ECM- 05 -34, and ECM- 04 -38. The operator states that a roadless issue is holding up final <br />reclamation of drill sites ECM -05 -24 and ECM- 06 -30. As per correspondence received <br />September 22, 2010 regarding this project, the applicant is requesting a partial bond release for <br />all sites under this NOI excepting locations 24 and 30. <br />The operator is commended for completing exemplary reclamation work in difficult terrain. <br />Nothing observed during the two day inspection would preclude the release of all exploration <br />bond for this project with the exception of what is required for the two sites involved in the <br />roadless issue as noted. <br />Number of Partial Inspection this Fiscal Year: 0 <br />Number of Complete Inspections this Fiscal Year: 0 <br />Page 2 of 3 <br />