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December 22, 2011 C- 1981- 012/New Elk Mine JHB <br />Inspection Topic Summary <br />NOTE: Y= Inspected N =Not Inspected R= Comments Noted V= Violation Issued NA =Not Applicable <br />N - Air Resource Protection <br />N - Availability of Records <br />N - Backfill & Grading <br />R - Excess Spoil and Dev. Waste <br />N - Explosives <br />R - Fish & Wildlife <br />R - Hydrologic Balance <br />R - Gen. Compliance With Mine Plan <br />R - Other <br />N - Processing Waste <br />R - Roads <br />N - Reclamation Success <br />N - Revegetation <br />N - Subsidence <br />N - Slides and Other Damage <br />R - Support Facilities On -site <br />R - Signs and Markers <br />N - Support Facilities Not On -site <br />NA - Special Categories Of Mining <br />R - Topsoil <br />COMMENTS <br />This was a partial inspection conducted by Janet Binns and Dan Hernandez of CDRMS. Mr. Bobby Steele <br />accompanied the inspection as the permittee, New Elk Coal Company, LLC's representative. The mine is an <br />active underground mine. The operation has constructed new portals; Bates portals, has developed new mains and <br />has recently reached the Blue seam coal. <br />The weather was cold with 5 -8 inches of fresh snowfall throughout the site. Snow continued to fall throughout the <br />inspection. <br />EXCESS SPOIL and DEVELOPMENT WASTE — Rule 4.09 Placement; Drainage Control; Surface <br />Stabilization: <br />The Development Waste Disposal Area continues to actively receive excavated development rock material. A <br />load of development rock was placed on the pile during the inspection. The Development Waste Disposal Area <br />(DWDA) is not being constructed as approved in the mine plan. DWDA is higher than designed and the side <br />slopes are steeper than allowed by the approved design. The Division issued NOV CV- 2011 -007 on December <br />16, 2011 for Failure to conduct coal mining and reclamation operations as approved in the permit application, and <br />failure to retain copies of the 3rd quarter refuse pile inspection and 3rd quarter development waste pile inspection <br />reports available at the mine office. <br />Abatement steps 1 and 3 for NOV -CV- 2011 -007 had not been complied with at the time of the inspection. <br />The side slopes of the DWDA remain steep but were not sloughing. Ditch D 12 on the north side of the DWDA <br />was snow covered but appeared unobstructed. <br />FISH and WILDLIFE — Rule 4.18: <br />A fox was observed crossing the reclaimed development waste pile. <br />Number of Partial Inspection this Fiscal Year: 6 <br />Number of Complete Inspections this Fiscal Year: 2 <br />Page 2 of 11 <br />