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June 7, 2012 C- 1981- 008/New Horizon Mine MPB <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 />N -Availability of Records <br />N - Backfill & Grading <br />NA - Excess Spoil and Dev. Waste <br />R -Explosives <br />N - Fish & Wildlife <br />R - Hydrologic Balance <br />Y - Gen. Compliance With Mine Plan <br />R - Other <br />NA - Processing Waste <br />INTRODUCTION: <br />Y -Roads <br />N -Reclamation Success <br />N - Revegetation <br />NA - Subsidence <br />NA - Slides and Other Damage <br />N - Support Facilities On -site <br />N -Signs and Markers <br />NA - Support Facilities Not On -site <br />N - Special Categories Of Mining <br />N -Topsoil <br />COMMENTS <br />This was a partial inspection of the New Horizon Mine conducted on June 7, 2012 by Mike Boulay of the DRMS. <br />Ross Gubka of Western Fuels- Colorado (WFC) was present during the entire inspection. Weather conditions were <br />sunny and warm. Ground conditions at the mine site were dry. Coal was not being loaded and hauled from the <br />mine at the time of the inspection, as the active pit was being prepared for blasting. <br />EXPLOSIVES — Rule 4.08 <br />Distance Prohibitions 4.08.4; Warnings 4.08.4; Control of Adverse Effects 4.08.4: <br />During the inspection, I observed an overburden cast blast at Bench 2 of the South Pit. Prior to the blast, Ross <br />Gubka of WFC set up seismographs at three locations (nearest structures) to monitor the blast. Photograph No. 1 <br />is at Pat Enstrom's property looking south toward the pit area and Photograph No. 2 is the overburden blast <br />location being surveyed. Prior to the blast the area was sprayed with water to aid in dust suppression. A safety <br />meeting /briefing was held between WFC and their blasting contractor prior to the blast. The operator sounded <br />warning and all clear signals prior to and after the blast, respectively. WFC maintains detailed records of all <br />blasting activities at the mine site. Photographs 3 and 4 were taken just before and during the blast taken from a <br />safe vantage point at the south end of the pit boundary looking to the north. <br />HYDROLOGIC BALANCE - Rule 4.05 <br />Drainage Control 4.05.1, 4.05.2, 4.05.3; 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 />Mining at the New Horizon North (NHN) Mine is expected to begin in 2012. The first cut will begin at the <br />location of the "Old Peabody Nucla Mine Highwall" and will proceed to the north. The backfill area (spoils) <br />below the high -wall will be redisturbed by facilities, a sediment pond, and overburden and topsoil stockpiles. <br />Number of Partial Inspection this Fiscal Year: 11 <br />Number of Complete Inspections this Fiscal Year: 4 <br />Page 2 of 7 <br />