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May 31, 2012 C- 1981- 008/New Horizon Mine SB1 <br />Inspection Topic Summary <br />NOTE: Y= Inspected N =Not Inspected R= Comments Noted V= Violation Issued NA =Not Applicable <br />Y - Air Resource Protection N - Roads <br />N - Availability of Records N - Reclamation Success <br />R - Backfill & Grading R - Revegetation <br />N - Excess Spoil and Dev. Waste N - Subsidence <br />N - Explosives N - Slides and Other Damage <br />Y - Fish & Wildlife N - Support Facilities On -site <br />R - Hydrologic Balance Y - Signs and Markers <br />Y - Gen. Compliance With Mine Plan N - Support Facilities Not On -site <br />N - Other N - Special Categories Of Mining <br />N - Processing Waste R - Topsoil <br />COMMENTS <br />This was a partial inspection of the New Horizon mine site. Weather was clear, warm and dry. <br />This year has been unusually dry and ground conditions, especially reclaimed dryland pasture, <br />are reflective of the dry conditions. <br />At the time of this inspection the operator was working in the active pit on the Morgan property. <br />Mr. Gubka commented that as the pit has progressed west the coal quality has gone down. A <br />large fault was observed in the pit that complicates overburden and coal removal. <br />Mr. Gubka showed us the CC ditch take out for the irrigation lines that supply the mine property. <br />BACKFILL and GRADING — Rule 4.14 Contemporaneous Reclamation 4.14.1; Approximate Original <br />Contour 4.14.2; Highwall Elimination 4.14.1(2)(f); Steep Slopes 4.14.2, 4.27; Handling of Acid and Toxic <br />Materials 4.14.3; Stabilization of Rills and Gullies 4.14.6: <br />The operator is continuing with the backfilling and grading of the active pit areas. The shovel was shut <br />down for approximately 10 days due to some MSHA concerns. It had just started up again recently. <br />Mr. Gubka explained that the last pit on the Morgan property will be narrower than previous pits. Bench 1 <br />overburden removal has not yet been totally removed from the last pit on the Morgan property. <br />Following the March 15, 2012 inspection, the Division requested that WFC provide information regarding the <br />elevations of replaced spoil, surface spoil, and /or topsoil placed to date on the Morgan and WFC parcels. The <br />purpose of this data will be to evaluate the mine's compliance with the approved post- mining topography. At the <br />time of the inspection, this data had not been submitted to the Division. <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 />Number of Partial Inspection this Fiscal Year: 12 <br />Number of Complete Inspections this Fiscal Year: 4 <br />Page 2 of 5 <br />