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March 27, 2012 C- 1981 - 022 /Elk Creek Mine BFB <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 R - Roads <br />N - Availability of Records N - Reclamation Success <br />N - Backfill & Grading N - Revegetation <br />N - Excess Spoil and Dev. Waste N - Subsidence <br />R - Explosives N - Slides and Other Damage <br />N - Fish & Wildlife R - Support Facilities On -site <br />R - Hydrologic Balance N - Signs and Markers <br />N - Gen. Compliance With Mine Plan N - Support Facilities Not On -site <br />R - Other N - Special Categories Of Mining <br />R - Processing Waste R - Topsoil <br />COMMENTS <br />INTRODUCTION - This was a partial inspection of the Elk Creek Mine conducted by Brock Bowles of the <br />Colorado Division of Reclamation, Mining and Safety on March 27, 2012. Jim Kiger, Environmental Manager for <br />Oxbow Mining, LLC (OMLLC) was present for the inspection. Weather conditions were sunny and warm. The <br />ground conditions in the facility areas were dry. Bear Creek Road was also dry. <br />AIR RESOURCE PROTECTION — Rule 4.17: <br />There was a large amount of coal in the coal stockpile area, stacking tubes were in operation, bulldozers <br />were stacking coal and a coal train was being loaded. There were no signs of fugitive dust on site or off. <br />EXPLOSIVES — Rule 4.08 Distance Prohibitions 4.08.4; Warnings 4.08.4; Control of Adverse Effects 4.08.4: <br />The area around the detonation cap and explosive locker was free of debris and vegetation. <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 />Ponds Al, B and substation had standing water and appeared to be functioning properly (photo 1). Ponds <br />C, E and east yard were dry and appeared to be functioning properly (photo 2). Pond D had standing water and the <br />primary drainage was still leaking water to the approved NPDES discharge point. Jim Kiger said pond D is <br />capable of handling spring runoff /storms and is scheduled to be cleaned in June at which time the leak will be <br />repaired. <br />The ditch and sediment traps along the west valley haul road, entry road and east yard haul road are clean, well <br />maintained and appear to be functioning properly. <br />The North Fork of the Gunnison River was very muddy during this inspection. <br />Number of Partial Inspection this Fiscal Year: 6 <br />Number of Complete Inspections this Fiscal Year: 3 <br />Page 2 of 5 <br />