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GCC <br />December 27, 2012 <br />State of Colorado <br />Division of Reclamation, Mining 86 <br />1313 Sherman Street, Room 215 <br />Denver, Colorado 80203 -2273 <br />Attn: Marcia Talvitie, Reclamation <br />Re: King II Mine <br />Pond Quarterly Inspection <br />4th Quarter 2012 <br />Dear Mr. Kaldenbach, <br />Sincerely, <br />Tom Bird <br />Manager, Coal Services <br />GCC Energy, LLC <br />Safety as a Value" <br />Safety <br />Specialist <br />Telephone: 970 385.4528 <br />Facsimile: 970 385 4638 <br />GCC Energy, LLC <br />6473 County Road 120 <br />Hesperus, Co 81326 <br />JAN 0 4 2013 <br />Division of Rec,famatioa, <br />Mining & Safoty <br />An inspection of the pond at the King II mine was performed on December 27, 2011 for <br />the 4th quarter of 2012. The pond contained a large amount of snow. The pond <br />embankment, in- slopes and spillway all also covered with about 12" of snow; however <br />all appeared stable with no evidence of slumping, settling or excessive erosion. All <br />features appeared to be in place and functioning as designed. <br />Please call Tom Bird at (970) 385 -4528 x 6503 if you have any questions or comments. <br />