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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-1991-146 <br />INSPECTION DATE 4/30/03 <br />INSPECTOR'S INITIALS WHE <br />OBSERVATIONS <br />This inspection occurred as part of DMG's monitoring of permitted sites. The ZMK Gravel Pit is <br />located approximately 5 miles north of Ouray, in portions of the NW Y4 of the SW '/< of Section 2, <br />T44N, RBW, NMPM, Ouray County. The reclamation permit is approved for 8.72 acres affected <br />area, for extraction and processing of alluvial materials from the Uncompahgre River channel. <br />Affected lands will be reclaimed to support industrial post mining land use. DMG holds 53,750 <br />financial warranty. Permit status is active. Material processing was occurring during the <br />inspection. <br />Mine identification sign was posted at the mine entrance. Affected area was appropriately <br />delineated. Mining related activities were confined to approved areas. Three groundwater <br />monitoring wells, arranged in a NW to SE alignment and extending through the permit area, <br />were intact. Material screen and various stockpiles of material were present on the pit floor. <br />Depth of the excavation appeared within the 10' limitation of the permit. Pit area appeared <br />stable, evidence of slumping, sliding, excessive erosion or off-site damage was not observed. <br />Pit area appeared dry, river flow was confined to the low flow main channel. <br />On 12/12/01, DMG calculated the cost of reclamation at 53,292. Conditions appeared similar to <br />the conditions observed during the 12/12/01 inspection. Therefore, the existing 53,750 financial <br />warranty appears sufficient to ensure reclamation. <br />No problems or possible violations were observed. <br />Responses to this inspection report should be directed to the Division of Minerals and Geology, 701 <br />Camino del Rio, Room 125, Durango, Colorado 81301, Attn: Wally Erickson, phone no. 970-247- <br />5469. <br />I & E Contact Address <br />NAME Richard Zannett <br />OPERATOR ZMK Construction, Inc. <br />STREET P.O. Box 1817 <br />CITY/STATE/ZIP Ouray, CO 81427 <br />cc: Harry Posey, DMG <br />X COE, Nick Mezei <br />^ BL <br />^ FS <br />^ HW <br />^ HMWMD (CH) <br />^ SE <br />^ WOCD (CH1 <br />X R. Larson, Monadnock Mineral Services <br />