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January 19, 2012 C- 1981 - 018 /Deserado Mine JRS <br />GENERAL MINE PLAN COMPLANCE: <br />- The Deserado Mine has completed mining in longwall panel LWB -11 and just started mining in longwall panel <br />LWB -12. They have completed the 10 -left entries (longwall panel LWB -12 headgate) and they are almost to the <br />point along the west mains where they can start development on 11 -left (longwall panel LWB -13 headgate). <br />Mining is progressing as permitted and approved, as shown on Map 12 - B -Mine Plan. <br />PROCESSING WASTE /COAL MINE WASTE PILES — Rule 4.10 and 4.11 Drainage Control; Surface <br />Stabilization, Placement: <br />- The operator is currently stockpiling refuse for the winter on the corner of refuse pile RP -5a. They will continue <br />to stockpile the refuse until conditions allow for the proper drying and compacting of the refuse (rather than it <br />freezing), which is typically late spring or early summer. The remaining pile was well graded and stable and had <br />positive drainage. <br />- Refuse Pile RP -2/3/4 was well graded and compacted at the time of the inspection. There was no water pooling <br />on the surface of the pile and it appeared to have positive drainage. This pile will be inactive during the winter <br />months and all of the refuse will be stockpiled on pile RP -5a. There were several piles of coarse material at the <br />edge of the outslope of the pile, presumable to be pushed over the outslope to fill in minor rilling. <br />ROADS — Rule 4.03 Construction 4.03.1(3)/4.03.2(3) Drainage 4.03.1(4)/4.03.2(4) Surfacing and Maintenance <br />4.03. 1(5) and (6)/4.03.2(5) and (6) Reclamation 4.03.1(7)/4.03.2(7): <br />- The haul road to the refuse pile was well maintained and stable and no erosional problems were noted. There <br />was not a problem with fugitive dust during the inspection. <br />- The mine entrance road is a paved road. This road was well maintained and stable. <br />SUPPORT FACILITIES - Rule 4.04: <br />- The 10 -left vent shaft (return shaft 6) drilling is complete. The shaft has been lined and grouted. The mud pit is <br />still in place and will probably remain until it dries in late spring or early summer. At that time the mud pit will be <br />backfilled and the drill pad will be reclaimed to the extent possible. This area was stable and no problems were <br />noted. <br />DOCUMENTS RECEIVED: None <br />This concludes the Division's 19 January 2012 partial inspection for the Deserado Mine. <br />Number of Partial Inspection this Fiscal Year: 5 <br />Number of Complete Inspections this Fiscal Year: 2 <br />Page 3 of 6 <br />