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March 7, 2012 C- 1981- 012/New Elk Mine JHB <br />Light use road to 25,000 gallon potable water tank, 65,000 gallon Raw water tank, and 400,000 gallon water tank <br />was in good repair. The 25,000 gallon Potable water tank was constructed at the location that Ditch D18 crosses <br />the access road. NECC is proposing to relocate Ditch D18, and will submit a MR. <br />Grading of Ditch D34AA on the north side of the West Portal Access road has occurred recently. While grading <br />of the ditch is regular maintenance, the Stream Buffer signs have been removed and laid on top of the berm. <br />Stream Buffer signs should not be removed and no disturbance should occur within the area designated stream <br />buffer zone. Stream buffer zone signs and disturbance area boundary markers needed to be reinstalled as soon as <br />possible. (4.02.5) <br />SUPPORT FACILITIES - Rule 4.04: <br />The East portal (Allen portal) and Bates portal facilities area are very busy with vehicle parking, active truck <br />traffic, Coal processing and storage, and waterline installation. Activity remains within the sediment control <br />system. Ditches are well defined, remain unimpeded, and water from the facilities area was flowing to Pond 7. <br />Access to the Bates Portal area was blocked from the east for work on the pad. Bates portal area needs additional <br />grading to assure drainage doesn't pond in this area, and is directed into approved sediment control system. <br />Waterline installation is continuing. Concrete vaults are in place, waterline hook up is still in process. <br />Most of the slurry line has been placed on the ground. NECC is in the process of burying the slurry line under <br />road crossings. Slurry line is not complete to the slurry wells at this time. <br />SIGNS AND MARKERS — Rule 4.02: <br />Mine identification signs were present and included the required information at entrances to the mine site from <br />public roads. Signs were visible at the Jansen Loadout, at the RDA access road north of Colorado State Highway <br />12, the main haul road entrance south of Colorado State Highway 12, at access to Pond 8 embankment form <br />Highway 12, and at both Apache Canyon air shafts. <br />Disturbance area boundary markers at the RDA need to be relocated to agree with Map 11 (sheet 3). Some of the <br />disturbance boundary markers south of DWDA had been knocked over and two stream buffer signs had been <br />knocked over in the same area south of the DWDA. The operator replaced the markers south of the DWDA <br />during the inspection. The location of the DWDA is extremely close to the Purgatoire River, so keeping outside of <br />this stream buffer zone is critical. Ditch D 14 south of the DWDA has been reshaped. A waterline has been buried <br />in the vicinity of this ditch. <br />Disturbance area markers and stream buffer signs on the South side of the Purgatoire River but north of the active <br />facilities area remain undisturbed and in the approved location. <br />OFFSITE SUPPORT FACILIITES - Rule 4.04,4.28: <br />The Jansen train load out was inspected on March 7th. The weather was dry and windy. NECC has stored a large <br />stockpile of coal in the coal storage area in preparation for a unit train. NECC contracts with a third parry <br />contractor, Robison Trucking for loading of the rail cars. No coal has been shipped from the load out yet. Coal <br />Number of Partial Inspection this Fiscal Year: 8 <br />Number of Complete Inspections this Fiscal Year: 3 <br />Page 5 of 10 <br />