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Inspection Contact Address <br />Steve Baker <br />3B Enterprises, LLC <br />P.O. Box 1665 <br />Craig, CO 81626 <br />PERMIT #: M- 2001 -060 <br />INSPECTOR'S INITIALS: DMC <br />INSPECTION DATE: October 19, 2011 <br />OBSERVATIONS <br />This was a partial inspection conducted by the Division of Reclamation, Mining and Safety in <br />order to verify removal of the stockpiled coal mine waste material that had been imported to the <br />site from the Foidel Creek Mine. Jason Musick, with the DRMS coal program, Steve Baker, <br />representing the Operator, and Jerry Nettleton, with Twenty Mile Coal, LLC, were present <br />during this inspection. Photographs are included at the end of this report in order to illustrate <br />some of the conditions observed. <br />The Deakins Pit is located on the east side of Craig and accessed from East First Street. The site <br />is a 112c operation that includes a total of 57.5 permitted acres. The Division currently holds a <br />financial warranty amount of $40,600.00 for this site. Following the Division's July 25, 2011 <br />inspection of this site, this amount was determined to be inadequate. A surety increase (SI -1) <br />notice was sent to the Operator on October 21, 2011. The additional warranty amount of <br />$6,754.00 is required to be posted with the Division by December 20, 2011. <br />As part of the abatement plan for NOV CV- 2011005 issued to Twenty Mile Coal, LLC — Foidel <br />Creek Mine (C- 1982 -056), regarding improper disposal of coal mine waste, all of the imported <br />waste material stockpiled at the Deakins Pit was to be removed from the site. Completion of this <br />was confirmed during this inspection. The area where the stockpiles were located during the <br />July 25, 2011 inspection, north of the pit area, had been adequately "cleaned up ". <br />During this inspection, the water level in the pit was low enough to allow the backfilled slopes to <br />be observed in order to determine whether the material used to backfill these slopes appeared <br />consistent with the import fill notice approved by the Division through TR1 in 2009. As stated <br />by the Operator, the imported material was primarily used for construction of the north bank of <br />the pit. Much of the imported material had already been covered with native materials prior to <br />this inspection, except for a small portion (approximately 600 ft. located on the northeast side <br />of the pit. This material was mostly black and contained a significant amount of coal clasts, up <br />to several inches in diameter, and did not appear consistent with the above noted import fill <br />notice. This issue is currently scheduled to be addressed at the November 9 -10, 2011 Mined <br />Land Reclamation Board meeting. <br />Responses to this inspection report should be directed to Dustin Czapla at the Division of <br />Reclamation, Mining and Safety, Grand Junction Field Office, 101 South 3rd Street, Room 301, <br />Grand Junction, Colorado 81501, phone number (970) 243 -6299. <br />Page 2 of 2 <br />