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BEd <br />NorthWest Colorado Consultants, In <br />Geotedmieal / Environmental Engineering - Materials Testing <br />July 30, 2010 <br />Twentymile Coal Company <br />29515 RCR #27 <br />Oak Creek, CO 80467 <br />Attn: Mr. Jerry Nettleton <br />Job Number: 99-3983 <br />Subject: Quarterly Observation Report, Refuse Pile, <br />Foidel Creek Mine, Routt County, Colorado. <br />Mr. Nettleton, <br />RoCl. ?D <br />AUG02Z010 <br />pion of hexVaXnoJJ0n, <br />Lftwwg aid Sal <br />As requested, NWCC, Inc. (NWCC) has prepared this report outlining our observations made during the <br />second quarter of 2010 at the Refuse Pile, which is located at Twentymile Coal Company's (TCC) Foidel <br />Creek Mine in Routt County, Colorado. During this quarter, Tim Travis of NWCC visited the project site <br />several times between April 19 and May 28, 2010 to observe the construction of the core underdrain for the <br />Refuse Pile Expansion and on June 30, 2009 to provide the quarterly inspection/observations of the existing <br />Refuse Pile. <br />NWCC visited the project site eight times between April 19 and May 28, 2010 to observe the construction <br />of the core underdrain being constructed for the refuse pile expansion. The contractor, Bower Brothers <br />Construction, had prepared the subgrade materials and placed the drain rock and filter layers I and II for the <br />underdrain. The drain started approximately 100 feet west of the existing pond and extended <br />approximately 400 to 500 feet to the west. The underdrain appeared to be constructed in general <br />accordance with the plans and specifications. <br />No compaction tests were taken in Areas 2, 3 and 4 of the existing refuse pile during this quarter. The <br />materials that were generated from the wash plant were being stockpiled and not compacted at this time. <br />At the time of our site visit on June 30, 2010, we completed a cursory site inspection of the existing pile. <br />Based on our observations made during this visit, it appeared that the contractor was presently stockpiling <br />the refuse coal in Areas 2, 3 and 4 of the pile as well as along the newly constructed underdrain in the <br />refuse pile expansion area. <br />The surface drainage conditions generally appeared to be adequate across the top and sides of the existing <br />pile. However, the shallow erosion channel located on the east side of the refuse pile, as noted in our first <br />quarter inspection report, had not been repaired. We recommend that the channel be re-graded so that the <br />drainage does not concentrate in this area and cause further erosion. It should be noted that at the time of <br />(970) 879-7888 - Fax (970) 879-7891 <br />2580 Conner Ridge Drive - Steamboat Springs. CO 80487