2012-05-08_INSPECTION - C1981008

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Apri130, 2012 C- 1981- 008/Neiv Horizon Mine MLT Surface Water Monitoring 4.05.13; Drainage — Acid and Toxic Materials 4.05.8; Impoundments 4.05.6, 4.05.9; Stream Buffer Zones 4.05.18: • The CCC Ditch was running full at the time of the inspection, as observed at the splitter box located at the northeast corner of the permit area (Photos 7 and 8). The San Juan Mountains received a less- than - average snowpack during the winter of 2011 -2012; available flow in the San Miguel River may drop off early this year, with associated impacts on agricultural production. • Pond 007 was receiving flow from the reconstructed "San Miguel Draw" (Photo 9), but the level in the pond was still below that at which discharge will occur. • Pond 008 had no inflow, and no discharge was occurring. • Pond 009 was completely dry. Mr. Gubka said that the rain gauge that was previously mounted on the pond's embankment has been relocated to the New Horizon North permit area. • For the first time since it was dewatered, Pond 011 was completely dry. • The western end of Pond 012 continues to hold a small pool of water, with numerous cattails growing. • Pond 013 was discharging, but inflow was intermittent, depending upon whether overflow from the elevated water tank was occurring. GENERAL MINE PLAN COMPLANCE: • Coal removal operations were active in the northern portion of the pit, on the Western Fuels property. 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 4.03.1(5) and (6) / 4.03.2(5) and (6); Reclamation 4.03.1(7) / 4.03.2(7): At some future date, Western Fuels will modify the alignment of BB Road so that it is centered on the section line as it heads west from the intersection with 2700 Road. REVEGETATION — Rule 4.15 Vegetative Cover; Timing: All of the side roll sprinklers were in operation on the reclaimed Irrigated Pasture areas located east of 2700 Road. Fields owned by Staats, Moore, Goforth, Guire, Burbridge, Western Fuels, and Benson were being irrigated at the time of the inspection. SPECIAL CATEGORIES OF MINING — Rules 4.22 through 4.27: Prime Farmland — Rule 4.25 Salvage of Lift A topsoil and Lift B subsoil from the Morgan property has been completed. At this western limit of the permit area, the soil resources are not as thick as what was observed several cuts to the east. "Lift A" varied from less than 12" to approximately 18" in thickness. I also observed some notable undulations in the top surface of the "Bench 1" overburden that lies beneath Lift B (Photo 10). Number of Partial Inspection this Fiscal Year: 8 Number of Complete Inspections this Fiscal Year: 4 Page 4 of It