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April 16, 2012 <br />1.0 INTRODUCTION <br />Page I <br />New Elk Coal Company (NECC) is in the process of expanding the New Elk Mine, <br />located approximately 12 miles west of Weston, Colorado in Las Animas County. A portion of <br />the mine development includes the construction of a new (West Portal) mine waste rock disposal <br />area (DWDA). <br />Agapito Associates, Inc (AAI) conducted a geotechnical site investigation on March 8 <br />and 9, 2012 in support of design efforts for the new DWDA. Samples of the mine development <br />waste rock were also obtained in order to determine their physical properties. This report <br />addresses the engineering aspects of the proposed West Portal DWDA design. AAI understands <br />that the proposed DWDA will contain mine waste rock produced during the life of the mine. It <br />is anticipated that development waste rock will be produced at various rates during mine <br />development however, it has been estimated that a storage capacity of approximately 170,000 <br />cubic yards (yd 3) are available if the proposed DWDA is ultimately constructed as recommended <br />with 3(H):1(V) side slopes. <br />The locations for the exploratory borings (131-1-38, 131-1-39, BH -40, 131-1-41, and DS -1) <br />along with the proposed footprint of the DWDA are illustrated in Figure 1. <br />1.1 Purpose and Scope <br />The purpose of this report is to provide the results of the field investigation, consisting of <br />an assessment of the soil and rock conditions at the project site, establishing soil and rock <br />engineering properties, and providing recommendations for foundation preparation and waste <br />rock placement. This report presents the results of the field investigation and laboratory analyses <br />which provide the basis for the design and construction recommendations pertaining to the <br />proposed West Portal DWDA. <br />The scope of the investigation included: <br />• Perform subsurface explorations as needed and collect representative samples of the <br />development waste rock and DWDA foundation materials; conduct appropriate <br />geotechnical laboratory tests to determine engineering characteristics and properties for <br />design considerations. <br />• Provide recommendations regarding foundation preparation and waste rock pile <br />configuration(s) i.e., slope and bench geometry. <br />• Evaluate potential geologic hazards at the site and determine the depth to groundwater, if <br />encountered. <br />1.2 Limitations of Report <br />The geotechnical investigation and recommendations contained herein were driven by the <br />results of the site investigation and design philosophies pertaining to the intended land use as <br />they were envisioned at that time. Although every effort was made to conduct the geotechnical <br />investigation appropriately for the requirements of this project, both the site conditions and their <br />Agapito Associates, Inc. <br />