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May 30, 2012 C- 1991- 078/Hamilton Mine <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 <br />Y - Roads <br />N - Availability of Records <br />R - Reclamation Success <br />Y - Backfill & Grading <br />Y - Revegetation <br />N - Excess Spoil and Dev. Waste <br />N - Subsidence <br />N - Explosives <br />Y - Slides and Other Damage <br />R - Fish & Wildlife <br />R - Support Facilities On -site <br />R - Hydrologic Balance <br />R - Signs and Markers <br />N - Gen. Compliance With Mine Plan <br />N - Support Facilities Not On -site <br />N - Other <br />N - Special Categories Of Mining <br />N - Processing Waste <br />N - Topsoil <br />COMMENTS <br />JLE <br />This was a surety release (SL3) inspection of the Hamilton Mine DRMS file number C- 1991 -078. The site is <br />operated by Honeywood Coal Company. I, Jared Ebert and Sandy Brown of the Colorado Division of <br />Reclamation, Mining and Safety conducted the inspection. Mr. John Rich of Honeywood Coal Company and Jim <br />Stover his consultant accompanied us on the inspection. The application for Phase III bond release was submitted <br />on December 21, 2011 and it was deemed complete on February 28, 2012 after the Division received the proof of <br />publication. This is the third surety release application submitted for the Hamilton Mine and it is designated SL3. <br />This has been a very dry winter /spring. Site conditions reflect this with dry soil and little new vegetative growth. <br />FISH and WILDLIFE — Rule 4.18: <br />Many signs of deer and elk were observed throughout the site. <br />HYDROLOGIC BALANCE - Rule 4.05 <br />Drainage Control 4.05.1, 4.05.2, 4.053; Siltation Structures 4.05.5, 4.05.6; Discharge Structures 4.05.7, <br />4.05.10; Diversions 4.05.4; Effluent Limits 4.05.2; Ground Water Monitoring 4.05.13; Surface Water Monitoring <br />4.05.13; Drainage — Acid and Toxic Materials 4.05.8; Impoundments 4.05.6, 4.05.9; Stream Buffer Zones 4.05.18: <br />Alluvial wells 4 -7 were inaccessible during the inspection. The wells were located on Reams Construction <br />property. We approached Mr. John Reams the landowner to gain access to the property to evaluate the condition <br />of the wells. At first Mr. Reams said that at least two of the wells are still in place and that he wanted them left as <br />is. Mr. Reams pointed out a well located north of State Route 141 and the well casing was visible (likely AW -5). <br />Ms. Brown informed the Operator and Mr. Reams that the wells would need to be permitted by the Division of <br />Water Resources in order for them to remain installed. After this statement, Mr. Reams said all of the wells were <br />destroyed. However, given Mr. Reams previous statements and the visible well, it does not appear all of the wells <br />Number of Partial Inspection this Fiscal Year: 8 <br />Number of Complete Inspections this Fiscal Year: 4 <br />Page 2 of 5 <br />