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Interoffice Memorandum <br />To: Leigh Simmons <br />From: Zach Trujillo <br />Subject: New Elk Mine — Review of New Elk Waste Bank Inspection Reports <br />Date: 4/10/2013 <br />Leigh — <br />Three disposal areas were inspected by New Elk Coal Company, LLC and included in their report, the Development <br />Waste Disposal Area (DWDA) south of State Highway 12 and west of the main facility Access Road, the Development <br />Waste Disposal Area #2 located south of State Highway 12 and east of the main facility Access Road, and the Refuse <br />Disposal Area (RDA) located north of State Highway 12 and the Middle Fork of the Purgatoire River. Construction has <br />been completed on the DWDA as well as reclamation of the surface. <br />After my review of New Elks Fourth Quarter Waste Bank Inspection Reports for the year 2012, 1 find the report in <br />compliance with the following rules: <br />1. 4.09.1(11)(a) —The fills were inspected quarterly for stability by a registered engineer during the placement and <br />compaction of fill materials and revegetation period. <br />2. 4.09.1(11)(c) —Rule 4.09(11)(c) is no longer applicable during this stage of construction. <br />3. 4.10.2(2)(a) — The fills were inspected by a registered engineer experienced in construction of similar earth and <br />waste structures. <br />4. 4.10.2(2)(b) — The inspections included the necessary test to evaluate potential hazards to human life and <br />property. None were observed. <br />5. 4.10.2(2)(c) — Steepness of slopes, seepage and other visible factors which could indicate potential failure were <br />considered within the inspections. No signs of instability, erosion or seeps were observed. <br />After my review of New Elks Fourth Quarter Waste Bank Inspection Reports for the year 2012, 1 find the report not in <br />compliance with the following rules: <br />1. 4.09.1(11)(b) —New Elk Mine's DWDA, DWDA #2 and RDA were inspected on December 20, 2012 and received <br />by the Division on April 4, 2013. A qualified registered engineer should provide to the Division a certified report <br />within two weeks after the inspection that the waste banks are being constructed as specified in the design <br />approved by the Division. <br />The following are some key notes from New Elk Mine's Waste Bank Inspection Reports: <br />• Refuse placement has been completed on DWDA #2 and has been shaped all but the east end of the pile. The <br />operator is evaluating alternative uses for the area which may result in a future revision. <br />• A 36" vertical cement culver placed in the middle of ditch D -14 restricts flow and should be removed. <br />[This section of culvert has been removed. See report of 1/28/2013 inspection. LDS] <br />• The east upland diversion ditch affiliated with the RDA has been regraded to ensure positive ditched. Culverts C- <br />75 and C -76 have been removed. <br />• Culvert C -41 needs to be repaired or replaced as portion of the culvert has partially collapsed. <br />