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August 22, 2012 X- 2010 - 231 -0I /Sage Creek Project JDM <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 - Roads <br />N - Backfill & Grading <br />R - Reclamation Success <br />N - Fish & Wildlife <br />N - Revegetation <br />N - Hydrologic Balance <br />N - Slides and Other Damage <br />N - Gen. Compliance With Mine Plan <br />N - Signs and Markers <br />N - Other <br />N - Topsoil <br />COMMENTS <br />RECLAMATION SUCCESS - Rule 2.02(g) and 4.21.2(2): <br />The sites inspected included 13 exploration holes drilled under NOI X- 2010 - 231 -01. Holes CCU, 057, 062, 055, <br />063, 054, 059, 051, 056, 053, 052, 050, 061 and 049 were inspected. Hole CCU060 was included on the Final <br />Reclamation Report Map, but was not drilled. <br />The boreholes were abandoned and reclaimed in compliance with rule 4.073 by refilling them up to 10 feet from <br />the surface. Cement was used to fill the hole up to 3 feet from the surface and the remainder filled with drill <br />cuttings. The holes were marked by a t -post and aluminum cap. Abandonment reports dated 03 May 2011 were <br />provided to the DRMS for each hole. <br />Each abandoned exploration drill site location was confinned utilizing a Trimble GeoXT GPS unit with final drill <br />site coordinates provided in the NOI permit. The results of the inspection, including example photographs of a <br />portion of the 13 holes is provided below. <br />All access roads and drill pads were reclaimed. All 12 sites appeared to be well vegetated, with some sites <br />exhibiting more vegetation than others. All sites appeared to be well vegetated and showed no signs of erosion, <br />damage, evidence of roads, or any other problems. Hole CCU053 displayed a minimal amount of houndstoungue <br />rosettes,; however these contributed very little to the overall disturbance of the site. CCU 057 was found to be <br />buried beneath the Peabody Sage Creek Mine topsoil stock pile. During the inspection there was no evidence that <br />the drilling had occurred with the exception of the t -post at each location. <br />Based on this inspection, it is determined that all 13 of the exploration holes inspected were properly abandoned <br />and the drill sites were adequately reclaimed. All reclaimed exploration drill sites remain stable. <br />SEALING OF DRILLED HOLES AND UNDERGROUND OPENINGS — Rule 4.07 See Above <br />Number of Partial Inspection this Fiscal Year: 0 <br />Number of Complete Inspections this Fiscal Year: 0 <br />Page 2 of 5 <br />