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purpose of the permit. And that area occupied by that waste storage area could also be mined for sand <br /> thus generating income rather than being a liability with a comparatively high cleanup cost. <br /> Mining vs.Waste Storage Areas: Although it is clear that the permittee is responsible for whatever <br /> happens within the permit area, in this case, there needs to be a clear distinction made between land <br /> that is actually mined and land that is disturbed for other purposes. The mining of the sand is <br /> conducted by a contractor, Schmidt Construction Company, under a contract that was established with <br /> Rick Hunt. Thus,the 53.82 acres of mining disturbance is an important number as it establishes <br /> Schmidt's obligation for reclamation of that disturbance. Other disturbances, such as the waste yard, <br /> has nothing to do with the mining operation and Schmidt has never deposited any waste in that area. <br /> In fact, Schmidt has objected to that use as the waste yard is blocking access to sand that could be <br /> mined under their contract. This distinction has no impact on the bonding cost for reclamation <br /> established as a part of the permit, but is important in establishing who is responsible for the various <br /> disturbances within the permit area. <br /> Map: A map is provided which establishes the bonding boundary. As suggested by DRMS, this <br /> area is somewhat larger than the actual disturbance and allows for about 3 to 4 more acres for sand <br /> extraction. The boundary has no effect on the amount of eventual disturbance possible within the <br /> permit and has no effect on the mining or reclamation plans stated in the permit documents. It only <br /> establishes a limitation on the amount of disturbance that can occur without increasing the bond to <br /> some additional amount. It is understood that if affected land is reclaimed and released from bond as a <br /> result of successful reclamation that amount of land can be shifted to the rest of the bonding boundary <br /> so further mining can occur there. Alternatively, a single bond could be established for the entire <br /> permit area in which case the bonding boundary would become the eventual,total affected land <br /> boundary anticipated in the entire mining operation. At this time, the 70.85 acres defined by the <br /> bonding boundary seems most appropriate. <br /> Future Disposition of the Property: At present the property is in receivership with MidFirst Bank <br /> effectively being the permit manager. It is planned that the land holdings of Mr. Hunt will be auctioned <br /> in the near future. Thus, a new owner will then enter into the picture. As it is not known what the <br /> wishes will be of a new owner it seems prudent to keep activity in the permit area to a level that allows <br /> for free operation of the income producing mining within a defined bonding boundary. It is possible <br /> the new owner might not even want the operation on their property and will insist it cease and the land <br /> reclaimed. Or they might be interested in the income potential from future mining of the sand within <br /> the permit, which is only a very small part of the total land to be auctioned. If further adjustments are <br /> needed that should wait for a new owner to decide what the future will hold for the Miller Gravel Pit. <br /> Page 2 of 2 <br />