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June 18, 2012 X- 2010 - 232- 00/New Elk Mine 2010 Exploration Program <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 - Backfill & Grading <br />N - Fish & Wildlife <br />N - Hydrologic Balance <br />N - Gen. Compliance With Mine Plan <br />N - Other <br />N - Roads <br />N - Reclamation Success <br />Y - Revegetation <br />N - Slides and Other Damage <br />N - Signs and Markers <br />N - Topsoil <br />COMMENTS <br />KAG <br />This was a coal exploration bond release inspection conducted by Kent Gorham of the Colorado Division <br />of Reclamation, Mining, and Safety. Shawn Arehart (on June 19th) and Vince Massaroti (both days) <br />represented New Elk Coal Company on the inspection. Bill Velarde of the Colorado Parks and Wildlife <br />Division was present on June 18th to inspect holes drilled on the Bosque del Oso State Wildlife Area. <br />A request for full bond release was received on May 9, 2012 from Agapito Associates on behalf of New <br />Elk Coal Company. According to the final 180 -day report, all operation and reclamation activities were <br />completed by April 2, 2011. Seventeen locations were drilled with monitoring wells established at two <br />locations, NE -01 -10 and NE- 06a -10 and NE- 06b -10, resulting in three monitoring wells. The inspection <br />began on the state -owned Bosque del Oso SWA the afternoon of June 18th <br />Site NE -12 -10 was found at the confluence of the left and right forks of Apache Canyon, clearly visible <br />using www.flashearth.com at 37 08'33.2" N 104 056'37.5 "W. The site is well vegetated with grasses and <br />forbs, with only a few annual weeds, with a noted plant or two of houndstongue. Sediment control <br />wattles anchored with wooden stakes and straw bales anchored with roof bolts were noted on the <br />downstream margins of the reclaimed area. The surface manager requested that the operator remove only <br />the metal roof bolts and scatter the straw bales over the reclaimed surface area. <br />Site NE -2 -10 was found in Ciruela Canyon along a pre- existing road. The reclaimed area is slightly - <br />sloping and found well vegetated and in good condition with no problems noted. The operator <br />constructed a riprap drainage along the eastern portion of the reclaimed area to handle any surface runoff <br />from the steep slopes above the reclaimed area. The site is clearly visible using www.flashearth.com at <br />3708'11.4"N 104055'10.8"W. <br />Site NE -3 -10 was found in an open area along a ridgeline above the Ciruela Canyon watershed at <br />coordinates 37 07'25.2 "N 104 055'21.3 "W. It was found well vegetated, with mulch from the hydro - <br />seeding still in -place and intact. <br />Site NE -4 -10 was found at coordinates 3707'10.5"N 104 057'37.3 "W. The site was found well reclaimed <br />with some large rocks placed on the reclaimed area. Some slash was present at the margins of the site but <br />Number of Partial Inspection this Fiscal Year: 0 <br />Number of Complete Inspections this Fiscal Year: 0 <br />Page 2 of 7 <br />