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July 17, 2012 C- 1981- 012/New Elk Mine <br />Inspection Topic Summary <br />NOTE: Y= Inspected N =Not Inspected R= Comments Noted V= Violation Issued <br />Applicable <br />R - Air Resource Protection <br />N - Availability of Records <br />R - Backfill & Grading <br />R - Excess Spoil and Dev. Waste <br />N - Explosives <br />N - Fish & Wildlife <br />R - Hydrologic Balance <br />R - Gen. Compliance With Mine Plan <br />R - Other <br />R - Processing Waste <br />COMMENTS <br />Y - Roads <br />N - Reclamation Success <br />R - Revegetation <br />N - Subsidence <br />N - Slides and Other Damage <br />R - Support Facilities On -site <br />R - Signs and Markers <br />N - Support Facilities Not On -site <br />N - Special Categories Of Mining <br />R - Topsoil <br />I':' <br />NA =Not <br />This was a partial inspection conducted by Janet Bums of CDRMS. The mine suspended production on July 11, <br />2012. The Decision to suspend production was a decision by NECC and not a result of enforcement actions. <br />Many of the NECC personnel have been laid off until operations resume. NECC's press release projected a 60 <br />day suspension of operations from July 11, 2012. Based on NECC information, five NECC personnel remain for <br />environmental surface activities, four underground miners were active underground at the time of the inspection. <br />Approximately 35 NECC employees remain active with the New Elk mine during the suspension. <br />The weather was warm and partly cloudy, with thunderstorms forming in the afternoon. NECC personnel reported <br />0.25 inches of rain the afternoon of 7/17/2012. The inspection began at the Trinidad office at 9:00 aim, 7/17/2012. <br />Ron Thompson was not in the office, so the inspector proceeded to the mine side west of Trinidad. Upon arriving <br />at the mine site, the guard shack is closed and padlocked. The inspector proceeded to Bobby Steele's office, but <br />the office building was empty. The inspector then progressed to the main office. Few NECC personnel were <br />observed on the mine site. Equipment was idle, thought the conveyor to the RDA was operating, and a loader was <br />placing development waste on the DWDA conveyor spur. CDOT contractors continue to work on the State <br />Highway No. 12 acceleration /deceleration lane project. <br />Jennifer Byrd of HR was in the office and attempted to contact NECC staff via radio. Bobby Steele was at the <br />Lorencito Mine completing maintenance repairs at that mine. Vince Massaroti was located and accompanied the <br />inspector. <br />At 1:00 pm, after talking with Mr. Steele, it was decided to meet him at the Lorencito site, due to equipment <br />scheduling. The inspector temporarily suspended the New Elk inspection until the morning of 7/18. <br />AIR RESOURCE PROTECTION — Rule 4.17: <br />NECC pumps water from Sediment pond No. 7 to fill water trucks for dust suppression. Although no water trucks <br />were observed spraying during the inspection, dust off the roads, coal stockpiles, development waste piles, and <br />facility areas was not a problem. <br />Number of Partial Inspection this Fiscal Year: 1 <br />Number of Complete Inspections this Fiscal Year: 0 <br />Page 2 of 11 <br />