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November 27, 2012 X- 2012 -223- 11/2012 NOI -Oak Mesa Area JDM <br />Inspection Topic Summary <br />NOTE: Y= Inspected N =Not Inspected R= Comments Noted V= Violation Issued NA =Not Applicable <br />Y - Air Resource Protection <br />R -Roads <br />R - Backfill & Grading <br />R - Reclamation Success <br />N - Fish & Wildlife <br />N - Revegetation <br />R - Hydrologic Balance <br />NA - Slides and Other Damage <br />R - Gen. Compliance With Mine Plan <br />R -Signs and Markers <br />N - Other <br />R - Topsoil <br />COMMENTS <br />This was a coal explortation inspection of the active Oak Mesa Project permitted under NOI X- 2012 - 223 -11 <br />conducted by Jason Musick of CDRMS. The weather was clear and the ground was dry with areas of moisture due <br />to recent snowfall. Steve Weist and Bob May of Oxbow Mining, Inc and Elliott Russell of CDRMS accompanied <br />the inspection. <br />BACKFIL,L and GRADING — Rules 2.02(g) and 4.21.4(4): <br />Backfilling and grading has been completed at site OM- 12 -09, The site is flat with no evidence of offsite impacts. <br />Drilling operations have been completed at inspected site OM -12 -16 with backfilling and grading operations yet to <br />occur. <br />HYDROLOGIC BALANCE - Rules 2.02(f), 4.21.4(7), and 4.21.4(10): <br />The following sites were inspected in various stages of development, OM- 12 -09, OM-12-35, OM- 12 -43, OM -12- <br />16, and OM- 12 -26. All sites are flat with little to no gradient of the area. No hydrologic impacts were observed. <br />All disturbances were confined to the approved drill sites and road construction, with no evidence of off -site <br />impacts with regard to sediment leaving the site or fugitive run -off. <br />GENERAL MINE PLAN COMPLANCE - Rule 2.02(g) and 4.21.2(2): <br />The Oak Mesa Exploration project consists of 43 exploration holes located on both private and public surface lands. <br />At the time of the inspection, approximately 6 holes have been drilled or are in the process of drilling. No problems <br />were noted and the operations are being conducted as approved at the time of the inspection. <br />ROADS — Rules 2.02(2)(g) and 4.21.4(3): <br />Existing county and ranch roads utilized for drilling access have been improved by grading operations and <br />drainage. Newly constructed access roads to sites OM- 12 -09, OM- 12 -16, OM -12 -26 and the reservoir 41 by -pass <br />road are stable and graded with no problems noted. <br />RECLAMATION SUCCESS - Rule 2.02(g) and 4.21.2(2): <br />At the time of the inspection no sites have completed reclamation. Site OM -12 -09 has been backfilled and graded <br />and site OM -12 -16 has been sealed. No problems were noted in terms of reclamation progress. <br />Number of Partial Inspection this Fiscal Year: 0 <br />Number of Complete Inspections this Fiscal Year: 0 <br />Page 2 of 9 <br />