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STATE OF COLORADO <br />DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866 -3567 <br />FAX: (303) 832 -8106 <br />September 4, 2012 <br />Dennis Jones <br />Seneca Coal Company, LLC. <br />PO Box <br />Hayden, CO 81639 <br />RE: Peabody Sage Creek Mining, LLC, Peabody Sage Creek Mine <br />Second Quarter 2012 Impoundment Inspection Report <br />Permit C- 2009 -087 <br />Dear Mr. Jones: <br />COLORADO <br />Q I V I S I O N O F <br />RECLAMATION <br />MINING <br />SAFETY <br />John W. Hickenlooper <br />Governor <br />Mike King <br />Executive Director <br />Loretta E. Pineda <br />Director <br />The Colorado Division of Reclamation, Mining, and Safety ( CDRMS) have found the above referenced <br />reports to be in compliance with the following CDRMS regulation: <br />4.05.9(17) — Examined at least quarterly by a qualified person designated by the operator, for <br />appearance of structural weakness and other hazardous conditions. <br />4.05.9(17) — A copy of the report shall be submitted to the Division on a quarterly basis. <br />The second quarter sediment pond inspection reports were received by the Division on 30 August 2012. <br />Sediment pond inspections were conducted on June 6 June 11 and June 16 th . <br />Maintenance work conducted included repair of minor eroision on upstream face of Pond 004 caused by <br />animal burrows and the redesign and construction of the Lower Sump. All impoundments were <br />functioning as designed at the time of the inspection. Pond 002, Pond 003, Pond 004, and the sumps <br />were discharging at the time of the inspections, with the exception of the portal sumps. <br />It is noted that the saturated area at the toe of the upper sump, west of the culvert still exists. As <br />mentioned in previous Division inspection reports the origin of the water in this area should be <br />investigated and determined if the integrity of the embankment has a potential to be compromised. <br />If you have any questions feel free to contact me. (303) 866 -3567 ex 8134 <br />Sincerely, <br />Jason Musick <br />Environmental Protection Specialist <br />Office of Office of <br />Mined Land Reclamation Denver • Grand Junction • Durango Active and Inactive Mines <br />