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(Page 2) MINE ID # OR PROSPECTING ID # M-1977-348 INSPECTION DATE October 3. 2005 INSPECTOR'S INITIALS CBM This was an inspection conducted at the request of the operator to determine progress of reclamation activities and to consider partial release on some areas in the north and east of the present permitted area. These areas have been sold (but have not yet closed) and Holcim requested release since they will no longer have ownership control over these areas. Attending the inspection were Carl Mount of the Division of Minerals and Geology, Gordon Benton of Holcim and Bill Schinderlein of Applegate Group (consultant to Holcim). Acreage Release AR-01 was found complete and therefore submitted to the Division on September 8, 2005. The operator has reclaimed areas to the north of the active pit and is conducting large scale reclamation over the entire mine site this year. The areas subject to the acreage release request are the reclaimed areas in the far north part of the pit area (approximately 15 acres) and areas to the east of the haul road (east of Pits A5 and A6 and more or less the northern 2/3 of unmined Pit E4 and all of unmined Pit E5) that were never mined or disturbed by the mining operation. A graphic display of these areas is on maps submitted and received by the Division on August 30, 2005. The inspection revealed three problem areas that are the subject of this release request. Two gullies were found east of the haul road. One is located between Pit A5 and proposed Pit E5 towards the south part of both those pits. One is located near the north side and between these pits. If the operator wants to be released from these parts of the permit area, calculations and riprap armor sizing will have to be submitted to the Division and these plans will have to be approved and the areas treated with rock armoring prior to release. The other area found to be a problem are the bare rock dip slope walls of former pit A7. There were many acres that have not been covered with fines and revegetated that cannot be released at this time. Photos of all these areas are included as an attachment to this inspection report. Also, minor disturbances were noted to the east of the haul road. The operator should be aware that, with the boundaries for the release request as they are drawn on the maps received by the Division on August 30, 2005, the permit boundary will beat the easternmost present disturbance of the haul road and no disturbance will be allowed out of that area. This means that the haul road reclamation will have to proceed by pulling up material with a trackhoe or other piece of equipment that would not cause any disturbance to the east of the haul road. Othervvise, the operator could be cited for mining outside the presently approved boundaries or, if the disturbance were greater than 2 acres, for mining without a permit. The operator is encouraged to modify the release request map such that the above small disturbances to the east of the haul road and the unvegetated dip slopes are outside of the present release request area. The Division cannot approve the release request in its present state. Other options for map modification and reclaiming areas sc that they can be released immediately (riprap in gullies) were discussed and a mixture of these options (map modification, gully treatment) is possible. The Division is required to make a decision on the release request by no laterthan December 2, 2005. Please contact the Division before that time to complete whichever options the operator wishes to do or ask for an extension to the due date for Division decision on the acreage release revision. In general, reclamation on other areas of the mine is proceeding quite well. The operator has contracted to Peter-Kiewit to do the reclamation and this contractor has two D-10 and lwo D-9 bulldozers working on the project. Slopes in the A6 pit area are almost completely done but topsoil has not been replaced on some of the slopes in the northern part of the pit. The operator should attempt to replace brownish colored material over the grayish, shale material if revegetation success is wanted. It was clear from looking at other areas of the mine disturbance that vegetation cover over several growing seasons was much better on areas covered with the brawn colored material. Vegetation was very sparse on any dip slope that was not covered with any fines at all. Generally, post-law dip slopes that are not covered with fines and revegetated will not grow enough vegetation to be equal or exceed vegetation cover on surrounding undisturbed areas and, therefore, will not pass release requirements. Much sloping has been done in the A5 pit area also. The operator's contractor is blasting the eastern highwall in areas that cannot be ripped and dozed into the pit. Slopes are being established at from 2H:1 V to 3H:1 V. This is acceptable but the operator should be aware that the slopes that are being established have lengths of over 300 feet and the operator is encouraged to install some sort of erosion control in the form of contour terraces or furrows so slope lengths do not exceed 100 feet or even less depending on slope steepness. The operator may wish to contact the local office of the Natural Resource Conservation Service for suggestions on contour terracing or furrowing. Responses to this inspection report should be directed to Carl B. Mount at the Division of Minerals and Geology, Denver Office,