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PERMIT #: M- 1988 -081 <br />INSPECTOR'S INITIALS: MAC <br />INSPECTION DATE: February 24, 2015 <br />OBSERVATIONS <br />The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety <br />(Division). Harry Covey and Dennis Covey were both present for the inspection. The Phil Sheridan Lode is <br />located approximately 6 miles west of Boulder, Colorado. The site is permitted for 1.9 acres and the post - <br />mining land use is residential. <br />Availability Of Records: <br />A review of the permit file found that Division does not a copy of the Operator's legal right to enter the <br />property. The permit was transferred to Mr. Harry Covey in 2006 and proof of a legal right to enter the <br />property to conduct mining and reclamation was not provided to the Division at that time. The failure to <br />demonstrate a legal right to enter the property has been cited as a problem and will require corrective action <br />by the Operator. Please see the first page of this report for additional details. <br />Explosives: <br />A small cinder -block shed which houses detonators is located at the northeast corner of the site; the shed was <br />securely locked. Another large cinder -block shed is located at the northwest corner of the site which houses <br />powder and blasting caps; this shed was also securely locked. According to the Operator, both of the sheds are <br />empty. <br />Financial Warranty: <br />The Division holds a financial warranty in the amount of $6,100.00. As part of this inspection the Division <br />performed a complete bond calculation to determine if the existing financial warranty is adequate to complete <br />reclamation at the site. Notice of any increase to the financial warranty will be sent under separate cover. <br />Gen. Compliance With Mine Plan: <br />No mining was taking place at the time of the inspection. The site contains a small shed near the entrance of <br />the site, which houses equipment. The shaft entrance is located to the west of the shed and a hoist sits over <br />the shaft. The entrance to the shaft is blocked by a door that is securely locked. The winch house, located to <br />the west of the shaft, houses the winch and the compressor. The roof of the winch house has recently been <br />replaced. In addition, the retaining wall behind the winch house has been replaced with a cinder -block wall in <br />an effort to prevent the hillside behind the winch house from sloughing off. <br />According to the Annual Report submitted to the Division on August 13, 2014, the last time mining was <br />conducted at the site was in 1996. The Operator informed the Division that he has collected samples from the <br />mine in 2013 and 2014. Active mining includes the development or extracting of a mineral from its natural <br />occurrence, and /or, the following other activities on affected land: transportation, concentrating, milling, <br />evaporation, and other processing. Active mining does not include general site maintenance. The Act and <br />Rules require operators who are not continuously mining to file a notice of Temporary Cessation. Pursuant to <br />Rule 1.13.5(1), if the Operator temporarily ceases production of the mining operation for 180 days or more, <br />the Operator must file a notice of Temporary Cessation in writing to the Division. The failure to place the Phil <br />Sheridan Lode operation into Temporary Cessation has been cited as a problem and will require corrective <br />action by the Operator. Please see the first page of this report for additional information. <br />Page 2 of 5 <br />