2016-10-25_INSPECTION - M2010062

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PERMIT#: M-2010-062 INSPECTOR'S INITIALS:TCW INSPECTION DATE:October 18,2016 OBSERVATIONS This was a routine monitoring inspection conducted by TC Wait of DRMS; Mr. Chad Haines was present representing the Operator. Mr. Haines has been working the site with permission from the Operator, Mr.Tim White. The site is located south of the Cimarron River in the southeastern corner of Baca County, about 10 miles west of Elkhart, KS. The site was last inspected in October 2010 at permitting. The permit area is 138.1 acres, however,the allowed disturbed area is 10 acres. Based on aerial photography(GoogleEarth, 8/15/16), the affected area is approximately 1.6 acres. Access to the site was via roads 667 and 6003 from western Kansas, then over the dry river channel of the Cimarron River to the south bank. The previous access route had been washed out from floods and has not been re-established. Portions of the permit area appear to be within the flood plain of the Cimarron River. At the time of this inspection, the site was dry and mining operations were occurring along the southern bank of Cimarron River. The entrance road was marked with the permit sign and the permit boundaries were marked with t-posts. Additionally, Mr. Haines has marked the boundaries of the 10 acres of maximum disturbance with posts. Native topsoil has been preserved along the eastern edge of the excavation, however the topsoil has not yet established vegetation and was prone to wind erosion. Mr. Haines indicated that the topsoil had only been present for the past month in this area. No reclamation work has been done at this point. No groundwater has been exposed to date, however, Mr. Haines indicated that he may excavate to a depth that would expose groundwater. If mining operations will expose groundwater, the Operator must comply with the Act for the Extraction of Construction Materials and Minerals, Section 34-32.5-116(4)(h)that requires reclamation plans to ensure minimization of disturbances to the prevailing hydrologic balance, including disturbances to the quantity of water in the area affected by mining and in the surrounding areas. The Mineral Rules and Regulations, Rule 3.1.6 (1)(a) requires compliance with Colorado water laws and regulations governing injury to existing water rights both during and after mining. Rule 3.1.7 pertains to groundwater, including complying with state Water Quality Control Commission standards and regulations. State law requires that any person exposing groundwater must obtain a well permit from the SEO pursuant to 37-90- 137(11). Operators which expose groundwater must also obtain a water-court approved augmentation plan. Minimal erosion was noted on the site, but will likely increase as more area is exposed. The Operator should work to establish vegetation on topsoil and stockpiles and minimize exposure to wind and water that could increase erosion. Several tamarisk trees were noted within the permit area, as well as throughout the Cimarron River valley. The Operator should implement a weed control plan to eliminate the tamarisk from the mine area. The site is generally stable and in good condition. RECOMMENDATIONS: 1. As mining progresses, the Operator should work to establish the final stable grades. Page 2 of 7'