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August 29, 2012 C- 1981 -033 /13ear Mine MPB <br />Inspection Topic Summary <br />NOTE: Y= Inspected N =Not Inspected R °Cornments Noted V= Violation Issued NA =Not Applicable <br />N - Air Resource Protection <br />N - 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 />R - Slides and Other Damage <br />N - Fish & Wildlife <br />N - Support Facilities On -site <br />R - Hydrologic Balance <br />N - Signs and Markers <br />N - Gen. Compliance With Mine Plan <br />N - Support Facilities Not On -site <br />N - Other <br />N - Special Categories Of Mining <br />N - Processing Waste <br />N - Topsoil <br />COMMENTS <br />This was a partial inspection of the Bear No. 3 Mine conducted by Mike Boulay of the Colorado Division of <br />Reclamation, Mining and Safety on August 29, 2012. There was not a company representative present during the <br />inspection. Bear Coal Company's coal permit C- 1981 -033 expired on July 19, 2012 and Bear Coal Company is <br />not renewing their permit. The Division will be pursuing bond forfeiture. Weather conditions were clear and <br />warm and ground conditions were dry. <br />HYDROLOGIC BALANCE -Rule 4.05 <br />Drainage Control 4.05.1, 4.05.2, 4.053; Siltation Structures 4.05.5, 4.05.6; Discharge Structures 4.05.7, 4.05.10; <br />Diversions 4.05.4; Effluent Limits 4.05.2; Ground Water Monitoring 4.05.13; Surface Water Monitoring 4.05.13; <br />Drainage — Acid and Toxic Materials 4.05.8; Impoundments 4.05.6, 4.05.9; Stream Buffer Zones 4.05.18: <br />The hillside seep was inspected and continues to flow at a low rate. The color of the seep is orange - brown. There <br />is some pooling of water at the base of the hill in a location covered by thick vegetation. During this inspection I <br />discovered that the seep discharge has been directed to North Fork of the Gunnison River as opposed to the <br />treatment pond. This occurred recently since DRMS's last inspection of July 23, 2012. A black corrugated plastic <br />pipe has been installed from the pool of water located near the base of the hillside and runs to the west and <br />discharges to the ground surface above the level of the river (see Photograph No. 1). The seep water flows <br />downhill a short distance and discharges into the river (Photo No. 2). The seep outflow was formerly regulated by <br />CDPHE under Colorado Discharge Permit System Number C00044377. Bear Coal's CDPS permit was <br />terminated on June 27, 2012. Since no treatment prior to discharge is required; discharging directly to the river is <br />appropriate. However, the flow is causing some minor erosion across the river bank. The final plan to control the <br />seep discharge is to construct a permanent open channel form the hillside seep to the North Fork of the Gunnison <br />River. The inlet of the treatment pond is shown in Photograph No. 3 as seen in the photo there is no inflow to the <br />pond from the hillside seep discharge. <br />Number of Partial Inspection this Fiscal Year: 2 <br />Number of Complete Inspections this Fiscal Year: 0 <br />Page 2 of 6 <br />