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March 7, 2012 C- 1981- 012/New Elk Mine JHB <br />EXCESS SPOIL and DEVELOPMENT WASTE — Rule 4.09 Placement; Drainage Control; Surface <br />Stabilization: <br />The operator continues to expand the DWDA No. 2 to the west as approved by TR60. An excavator was working <br />on the top of the DWDA pile to bring material up from the south side to adjust the slope to the approved design. <br />The machine operator said that a truck load of development waste was brought up about every two hours. Ditch <br />D12 on the north side of the pile needs additional shaping to assure runoff from the DWDA north slope remains in <br />the sediment control system, As NECC works the DWDA reshaping of this ditch (D12) will need to be <br />conducted as regular maintenance. <br />Ditch D14 on the south side of the DWDA has recently been reshaped and a waterline buried adjacent to ditch <br />D14. Bobby thought the waterline was buried 4 foot deep. The placement of the waterline must not interfere with <br />the maintenance of the sediment control system and ditch D14. Several stream buffer signs and disturbance area <br />markers that are placed on the berm to the south of ditch D14 have been knocked down. There was no sign that <br />any new disturbance had occurred outside of the approved marker locations. The stream buffer signs and <br />disturbance area markers were replaced within hours of the inspector noting their absence. <br />EXPLOSIVES — Rule 4.08 Distance Prohibitions 4.08.4; Warnings 4.08.4; Control of Adverse Effects 4.08.4: <br />Explosives storage area was inspected. No problems were noted in the explosives storage area. Signage was in <br />place, protective berms were in place. ATF License No. 5 -CO- 071 -33 -4L -00722 was available for review at the <br />TK Mining offices in the Warehouse. Ed Daniels, Safety Director for TK Mining, and Radar were the contacts for <br />blasting records with TK Mining. TK Mining is currently the holder of the explosives license and contractor for <br />blasting. The Mining operation currently has 29 certified blasters on the staff based on the shot -fire certifications. <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 />There are three sediment ponds on the mine site: Pond 4, Pond 7 and Pond 8, and 2 process water ponds Pond 1 <br />and Pond 6. NECC is planning to construct an overflow meter on the outfall of pond 1. NECC personnel, Shawn, <br />has been working with the Colorado Division of Water Resources to comply with requirements of DWR. No <br />change to the actual structure of the discharge structure should be made until this change is permitted with DRMS. <br />NECC is proposing to reduce to outlet structure from a 24" diameter pipe to a 10" diameter pipe. The proposed <br />design change needs to be submitted to the Division as a revision to the permit. <br />Pond 6 is still being dried out in anticipation of sediment removal and lining of this pond. Culvert C6, NW of pond <br />6, needs additional cover material over the culvert. Pond 8 was holding a pool of water but was not discharging. <br />An MSHA inspector voiced concern regarding seepage on the NE face of the pond 8 embankment during the <br />Division's close -out with Bobby Steele. During the time of the inspection the ground was damp with a thin <br />covering of snow on the embankment face. No soft or unusually wet areas were noted at the time of the <br />inspection. The sediment containment area at the NE of the Pond 8 embankment is due for sediment clean out. <br />Number of Partial Inspection this Fiscal Year: 8 <br />Number of Complete Inspections this Fiscal Year: 3 <br />Page 3 of 10 <br />