2015-03-03_INSPECTION - M2002120 (2)

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PERMIT #: M- 2002 -120 INSPECTOR'S INITIALS: ECS INSPECTION DATE: February 24, 2015 OBSERVATIONS This was a Surety Reduction (SR) inspection conducted by DRMS at the Hall Irwin Bernhardt Resource site. There are 286.14 acres currently permitted at this 112c site. The inspection was conducted by Eric Scott of DRMS. The DRMS representative traveled to the site with permittee representative Mark Johnson of Bestway Concrete at approximately 1130. DRMS noted that recently very limited mining activity had taken place within the previously disturbed area; otherwise, the site appeared to be in a very similar condition as the previous 2012 inspection. On January 23, 2015 a SR revision was requested by the permittee based on the approval of the slurry wall by the SEO, backfill of a smaller settling pond along the south border of the site, and the limited nature of the current disturbance at the site. DRMS believes that, although a bond reduction based on the completion and SEO approval of the slurry wall may be appropriate, the bond proposed in the SR provided ($328,826) would be insufficient to reclaim the existing disturbance at the site, let alone any additional future mining activity. For reference, the initial bond calculation in the 2002 permit application for phase 2 was itself $806,000. Reclaiming just the current disturbance at the site would include at a minimum: sloping of the banks of the current excavation within the slurry wall to 3:1 or flatter, backfill of the almost 6 acres of exposed groundwater north of the slurry wall area to at least two feet above water level, grading out all the remaining disturbed but un -mined areas, replacing the topsoil, and revegetation as approved in the current reclamation plan for the site. The permittee should provide a revised reclamation estimate that includes estimated costs for at least the above items, as well as any additional disturbance planned within the next 12 months and the standard indirect costs to DRMS by Friday, March 13 if the SR process is to continue. Please also be aware that this permit was a "stipulated" approval by DRMS and that there are conditions still outstanding that will need to be complied with as mining progresses. These conditions include: Stipulation 3 which states "The operator shall not mine outside the Pod 1 until they prove to the satisfaction of the Division of Minerals and Geology that their mine plan has clearance through the U.S. Fish and Wildlife Service" (due to concerns about Preebles Jumping Mouse Habitat and; Stipulation 4 for mining within 200 feet of the river which states "The presence of any mined slopes, graded slopes and /or backfilled slopes at the Bernhardt Resource site that are steeper than 5:1 and within 200 feet of the river during the period between April 1 and October 1would be a violation of mined land reclamation permit M2002- 120 ". DRMS therefore strongly encourages the permittee to thoroughly review the site file and become familiar with all permit requirements — including those made during the adequacy review process - before full scale mining resumes to avoid any inadvertent violations of the permit. Inspection Contact Address Mark Johnson Bestway Concrete Company 301 Centennial Dr. Milliken, CO 80543 Page 2 of 2