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PERMIT #: M-1998-014 <br />INSPECTOR'S INITIALS: SJM <br />INSPECTION DATE: April 8, 2019 <br />OBSERVATIONS <br />This inspection was conducted as part of the Division of Reclamation, Mining and Safety's (Division) normal <br />monitoring program. Jason Burkey and Jeff Boone representing the Operator, Keith Hernandez representing <br />Holy Cross Energy were present during this inspection. Photographs are included at the end of this report in <br />order to illustrate some of the conditions observed during this inspection. <br />The site is located approximately 1.5 miles east of Gypsum, Colorado in Eagle County and accessed from Hwy. <br />6. <br />Affected area boundary markers (fencing) were in place and adequate. No off site damage was noted during <br />this inspection. <br />This inspection was completed as a follow-up involving a complaint from Holy Cross Energy that 5 power poles <br />were compromised by an irrigation ditch that runs parallel (east/west) to the southern boundary of the permit <br />area. While the irrigation ditch is within the permit boundary and within 200' of the affected lands, it is <br />determined by Division Staff that the irrigation ditch has erosional features and down cutting that is not <br />created by the Operator and mining activities. The Operator is not discharging water into the ditch, nor is the <br />Operator responsible for ditch mainaintence. There is hearsay that the irrigation ditch was realigned 20 years <br />ago by a previous Operator before Old Castle SW Group became the existing Operator. The Division has no <br />record of the irrigation ditch being moved or rerouted. It is determined that the power poles could be in <br />jeopardy because the irrigation ditch is eroding the banks of the ditch and the poles are placed within 18" of <br />the ditch in some areas. The Division recommends that the ditch company maintained by Bob Newby work <br />with Holy Cross Energy to create a more stable and solid solution for the stability of the power poles. The <br />Division has contacted Bob Newby and he has committed to temporarily fixing the areas of the irrigation ditch <br />that are near the power poles that could potentially compromised. Presently, there a 2 culverts that are <br />placed in the ditch near the power poles. Bob Newby has committed to realigning the culverts to convey <br />water and reduce the erosional issues near the power poles in the Spring 2019. <br />During the permit review for this inspection, Division staff has determined that in 2014 when the Gypsum <br />Ranch Pit was transferred to Old Castle SW Group by LaFarge West, Inc. not all of the Structure Agreements <br />were submitted as part of the Succession of Operators (SO -03). This is considered a problem at this time and <br />is outlined in the beginning of this inspection report. <br />Other outstanding issues involving permit compliance include a Financial Warranty Increase (SI -01) that dates <br />back to April 2017. This increase is $111,775.49 must be submitted and complete within 30 days of this <br />report. <br />Another outstanding issue is failure to submit a Technical Revision to the Division to address the erosion and <br />sloughing of material adjacent to the Eagle River in the northern portion of the permit area. Please refer to <br />the April 2017 Inspection Report regarding this issue. This is still considered a problem at this time and is <br />outlined in the beginning of this inspection report. <br />Page 3 of 9 <br />