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September 11, 2012 C- 1981- 008/New Horizon Mine JLE <br />Inspection Topic Summary <br />NOTE: Y= Inspected N =Not Inspected R= Comments Noted V= Violation Issued NA Applicable <br />Y - Air Resource Protection Y - Roads <br />N - Availability of Records N - Reclamation Success <br />R - Backfill & Grading R - Revegetation <br />Y - Excess Spoil and Dev. Waste N - Subsidence <br />N - Explosives N - Slides and Other Damage <br />N - Fish & Wildlife N - Support Facilities On -site <br />R - Hydrologic Balance N - Signs and Markers <br />R - Gen. Compliance With Mine Plan N - Support Facilities Not On -site <br />NA - Other N - Special Categories Of Mining <br />NA - Processing Waste R - Topsoil <br />COMMENTS <br />This was a partial inspection of the New Horizon Mine; DRMS File No. C- 1981 -008 operated by Western Fules - <br />Colorado, LLC. I, Jared Ebert of the Colorado Division of Reclamation, Mining and Safety conducted the <br />inspection. Ross Gubka of Western Fules accompanied me on the inspection. The weather was cloudy and wane <br />during the inspection. <br />BACKFILL and GRADING — Rule 4.14; Contemporaneous Reclamation 4.14.1; Approximate Original Contour <br />4.14.2; Highwall Elimination 4.14.1(2)(f); Steep Slopes 4.14.2, 4.27; Handling of Acid and Toxic Materials <br />4.143; Stabilization of Rills and Gullies 4.14.6: <br />The Operator has finished mining in the Morgan property. It appears the pit has recently been backfilled partially <br />with spoil and bench 1 material is being placed in two lifts at the eastern end of the pit. <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 />Pond 7 was holding water and discharging. The primary spillway was clear of debris and the embankments were <br />stable. <br />Pond 8 was holding water but the headgates were closed so the pond was not discharging. The primary spillway <br />was clear of debris and the embankment was stable. The inlet was stable and clear of debris. <br />Pond 9 was dry and not discharging. The inlet appeared stable and the outlet was clear of debris. <br />Pond 11 was holding a small amount of water near the primary spillway. The primary spillway was clear of debris <br />and the headgates were closed. The flume was in place and stable. <br />Number of Partial Inspection this Fiscal Year: 2 <br />Number of Complete Inspections this Fiscal Year: 1 <br />Page 2 of 5 <br />