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XBOW MINING LLC <br />ENGINEERING INSPECTION <br />EAST YARD, WEST VALLEY FILL AND II WEST <br />COAL MINE WASTE DISPOSAL PILES <br />The approved Oxbow Mining, LLC (OMLLC) Mine permit includes a requirement for quarterly inspections of <br />coal mine waste piles for stability. The inspection is to be performed by a registered engineer or other qualified <br />professional specialist, who is experienced in the construction of earth and rockfill embankments. On December <br />20, 2011 visual inspections were performed of the East Yard, West Valley Fill and II West coal mine waste <br />disposal areas. Compaction tests were performed during the quarter, copies of which are included herein. <br />EAST YARD - The East Yard disposal area has reached its design capacity, and no new waste material has been <br />placed since June of 2001. The revegetated slope was inspected for signs of erosion or instability. No erosional <br />features were noted on the slope. The covering of the waste pile is considered complete. Nothing was observed <br />during the inspection that would indicate the pile has a potential for structural failure. <br />WEST VALLEY FILL — During the third quarter, no waste was hauled to the West Valley Fill area. The refuse <br />pile was surveyed at the approximate 6228.8' elevation. The active waste storage area will continue to be an <br />interim storage area for refuse rehandled later to II West and a staging area for miscellaneous projects . <br />The revegetated outslope located between the fill slope toe to the approximate 6200' elevation was inspected for <br />signs of erosion and instability. No erosional features were noted on the slope. The third bench (approximate <br />6200' elevation) setback remains established for the final lift of waste material and the ramp constructed on the <br />waste pile to provide access to the II West Coal Refuse Facility light use road and haul road. These two roads <br />continue to be utilized. No springs or seeps were noted. Surface drainage control features are performing <br />according to the plan. Nothing was observed during the inspection that would indicate the West Valley Fill has a <br />potential for structural failure. <br />II WEST — The II West disposal area received approximately 420 CY additional coal mine waste during the <br />fourth quarter of 2011. The elevation of II West is at the approximate 6122.6' elevation. The material continues <br />to be worked to meet compaction requirements. Three successful compaction tests were conducted (a copy <br />attached.) The rock underdrain crest continues to be extended to accommodate additional waste. The extended <br />crest of the 2011 regraded outslope was seeded on December 2, 2011 with the Table 3 mix. The portion of the <br />outslope area seeded in 2010 remains stable with no rills or gullies. The 2010 seeding establishment performed <br />well during 2011. Older seeded areas are performing according to plan. No springs or seeps were noted. Surface <br />drainage control features are performing according to the plan. A portion of the East Surface Rock Channel <br />remains temporarily covered with fabric and road materials while being used as an access ramp to the pile. <br />Nothing was observed during the inspection that would indicate the II West Fill has a potential for structural <br />failure. <br />C k <br />nspected by James A.Cer <br />C1� <br />Thomas C. Anderson Date <br />Colorado Licensed Professional Engineer No. 14726 <br />3737 Hwy 133 • P.O. Box 535 • Somerset, Colorado 81434 USA <br />TEL (970) 929 -5122 • FAX (970) 929 -51 77 <br />