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August 8, 2012 C -1983- 059 /Terror Creek Loadout JRS <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 />R - Roads <br />N - Availability of Records <br />N - Reclamation Success <br />N - Backfill & Grading <br />N - Revegetation <br />N - Excess Spoil and Dev. Waste <br />N - Subsidence <br />N - Explosives <br />N - Slides and Other Damage <br />N - Fish & Wildlife <br />R - Support Facilities On -site <br />R - Hydrologic Balance <br />N - Signs and Markers <br />R - Gen. Compliance With Mine Plan <br />N - Support Facilities Not On -site <br />R - Other <br />N - Special Categories Of Mining <br />N - Processing Waste <br />R - Topsoil <br />COMMENTS <br />This was a partial inspection of the Terror Creek Loadout conducted by Jim Stark of the Colorado Division of <br />Reclamation, Mining and Safety. No representative from Terror Creek, LLC was present on the inspection. The <br />operation was not actively processing or loading coal at the time of the inspection. The Terror Creek Loadout will <br />be idled and will only be staffed and operational if an order for the specialty coal it produces was received. The <br />gate to the site is open, however, because a trucking company leases the shop and warehouse building. The Terror <br />Creek Loadout is not being put into temporary cessation and, as such, must continue to perform all maintenance <br />and monitoring as required by the approved pen The weather was warm and sunny and, despite recent rains in <br />the area, the ground was dry. <br />HYDROLOGIC BALANCE - Rule 4.05 Drainage Control 4.05.1, 4.05.2, 4.053; 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 />Impoundments 4.05.6, 4.05.9; Stream Buffer Zones 4.05.18: <br />- The sediment pond at the east side of the yard had a small pool of water in it and was not discharging at the time <br />of the inspection. The pond embankment was well vegetated and stable and no erosional problems were noted. <br />- The dugout pond was muddy but did not contain any water at the time of the inspection. The pond is an incised <br />pond. The area around the pond was well vegetated and stable and no erosional problems were noted. <br />- The roadside ditch contained some standing water but no water was flowing in the ditch at the time of the <br />inspection. The ditch was clean and stable, with no signs of any down - cutting or erosion. <br />- The ditch on the north side of the coal piles was dry at the time of the inspection. The ditch was clean and stable <br />and no erosional problems or down- cutting was noted. <br />GENERAL MINE PLAN COMPLANCE: <br />- The Terror Creek Loadout is a loadout only. Operations at the site include processing coal (sizing coal) and <br />loading trains. The site was not operating at the time of the inspection and will only be operational when an order <br />for coal is received. The ongoing operations at the site were consistent with what is approved in the pen <br />Number of Partial Inspection this Fiscal Year: 2 <br />Number of Complete Inspections this Fiscal Year: 0 <br />Page 2 of 6 <br />