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January 11, 2012 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 />Y - Explosives <br />N - Fish & Wildlife <br />R - Hydrologic Balance <br />R - Gen. Compliance With Mine Plan <br />R - Other <br />R - 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 />Y - 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 of CDRMS. Mr. Bobby Steele accompanied the <br />inspection, and represented New Elk Coal Company. Mr. Bob Bosie, surface coordinator, accompanied the <br />inspection representing TK Mining. <br />The weather was cold and snowing throughout the inspection. <br />The mine is an active underground mine. The operator is currently developing mains at the Bates portal, and <br />continues to pull rock out of the portal for disposal on the development waste area (DWDA). Approximately <br />15,000 tons of coal are currently stored at the loadout. NECC has not shipped coal from the load out. Mr. <br />Bosie expected that TK Mining will be in coal early next week. <br />EXCESS SPOIL and DEVELOPMENT WASTE — Rule 4.09 Placement; Drainage Control; Surface <br />Stabilization: <br />The DWDA continues to receive development waste rock. The operator is placing and compacting material on the <br />west end of the pile. Ditches on the south side have been well defined and Culvert C13 remains in place. <br />HYDROLOGIC BALANCE - Rule 4.05 Drainage Control 4.05.1, 4.05.2, 4.05.3; Siltation Structures 4.05.5, <br />4.05.6; Discharge Structures 4.05.7, 4.05.10; Diversions 4.05.4; Effluent Limits 4.05.2; Ground Water <br />Monitoring 4.05.13; Surface Water Monitoring 4.05.13; Drainage — Acid and Toxic Materials 4.05.8; <br />Impoundments 4.05.6, 4.05.9; Stream Buffer Zones 4.05.18: <br />Material has been removed from the RDA collection ditch. <br />Approved drainage at the former topsoil stockpile 42 west of the RDA conveyor have been reestablished and <br />unauthorized fills and culverts have been removed as required by NOV -CV- 2011 -008 abatement step No. 2. <br />Pond 7 filtration system is on south side of the embankment. Bobby stated that this system is effective in allowing <br />Number of Partial Inspection this Fiscal Year: 7 <br />Number of Complete Inspections this Fiscal Year: 2 <br />Page 2 of 10 <br />