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(Page 2) MINE ZD # OR PROSPECTING ID # M-1977-361 INSPECTION DATE 9/05/02 INSPECTOR'S INITIALS ESC This was an inspection of the Silica Quarry conducted by Erica Crosby of the Division of Minerals and Geology. George Martin of CEMEX, Inc. was present during the inspection. The Silica Quarry is a 110 sandstone quarry 9.9 acres in size. The permit was issued on June 4, 1978. The permit was recently transferred from Southdown, Inc. to CEMEX, Inc. on September 27, 2001. The Division holds a financial warranty in the amount of $223,700.00. The site is considered active, but no mining was taking place during the inspection. Loukonen Bros. Stone is mining the quarry with approval from CEMEX, Inc. The operator provided the Division with a lease agreement between the two parties. It appears that under this contract, up to 6,000 tons of material can be removed per year. A highwall exists on the west and north end of the site. Overburden and topsoil piles were noted. The reclamation plan states that highwalls will be reduced to 2h:ly slopes and topsoil will be replaced to a depth of 2" to 4". The site will then be revegetate to agricultural use with a dry pastureland seed mixture. The $223,700.00 financial warranty appears adequate to reclaim the site to these standards. A mine identification sign was noted at the mine entrance. However, no permit boundary markers depicting the permit boundary area could be located. Rule 3.1.12 of the Construction Materials Rules & Regulations require that markers be posted to delineate the permit boundary area. The operator will need to post the permit boundary markers and submit proof of compliance in the form of photographs by November 5, 2002. Please see Page 3 of the inspection report for further detail. I & E Coatact Address ^ CE NAME Mr. John Lohr ^ BL OPERATOR CEMEX, Inc. ^ FS STREET P.O. Box 529 ^ HW CITY/STATE/ZIP Lyons, CO 80540 ^ HMWMD (CH) ^ SE ^ WQCD (CH) Cc: Carl Mount; DMG (via electronic transmission)