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PERMIT #: M- 2010 -049 <br />INSPECTOR'S INITIALS: PSH <br />INSPECTION DATE: December 12, 2013 <br />OBSERVATIONS <br />The Western Sugar Reclamation Land Development Project site was inspected by Peter Hays with the Division <br />of Reclamation, Mining and Safety (Division /DRMS) as part of the Division's monitoring inspection program. <br />The site was previously inspected by the Division on January 31, 2013. Mr. Brad Janes with Varra Companies, <br />Inc. ( Varra) was present during the inspection. <br />The Western Sugar site is approved for 102.18 total permit acres. The site operation and layout were mostly <br />unchanged since the last inspection. The processing plant and product stockpiles remain in Tract A. Mining <br />excavation in Tract B is complete. Backfilling and clay lining activities have continued in Tract B and appeared <br />close to completion. Active mining excavation was observed in Tract C. The required dewateringtrench has <br />been established around the perimeter of the tract and mining is progressing from the perimeter of the tract <br />towards the middle. Mining activities in Tract D have not started, however a ditch has been constructed in the <br />tract from the dewatering discharge ditch to the northeast corner of the tract. It appears the ditch was used <br />to divert discharge water to Tract D in the Durham Project site. The purpose of the water diversion is <br />unknown. <br />The Division currently holds a financial warranty in the amount of $292,210.00, which appears adequate to <br />complete reclamation based on the observations from this inspection. The approved post- mining land use for <br />the site is general agriculture. The Operator plans to submit an amendment in the future to change the post <br />mine land use to developed water resource. The Operator has dedicated water shares to account for the long <br />term augmentation requirement for the exposed groundwater. <br />The Operator stated the site was not impacted by the recent flood event in the region. No evidence of flood <br />damage was observed during the inspection. <br />Photographs taken during the inspection are attached. No problems were noted during the inspection. <br />Inspection Contact Address <br />Mr. Chris Varra <br />Varra Companies, Inc. <br />8120 Gage Street <br />Frederick, CO 80516 <br />Cc: Tom Kaldenbach, DRMS <br />Page 2 of 4 <br />