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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-1985-023 <br />INSPECTION DATE 7(25/2007 <br />OBSERVATIONS <br />INSPECTOR'S INITIALS SSS <br />This was afollow-up inspection to the 9-7-2006 inspection where the lack of permit boundary markers was noted as a <br />problem. This inspection was also conducted to determine if clean-up and reclamation tasks had been performed to <br />lower the reclamation liability at the site. Russ Means (DBMS) accompanied during the inspection. <br />The affected area boundary markers were not observed. However, Mr. Hollenbeck indicated he was going to perform <br />final reclamation on the site. If final reclamation is initiated by September 12, 2007 and continues until completed, the <br />markers need not be installed. If reclamation is not initiated by that date then affected area markers must be installed by <br />that date, per the requirements of Rule 3.1.12 121 that state: The boundaries of the affected area will be marked by <br />monuments or other markers that are clearly visible and adequate to delineate such boundaries. The lack of boundary <br />markers was noted as a problem, with the corrective actionls) and correction date specified, in the previous inspection <br />report. The problem remains but is not re-iterated on the last page of this report. Failure to either initiate reclamation or <br />install the markers by September 12, 2007 may result in this matter being scheduled far an enforcement action hearing <br />before the Mined Land Reclamation Board. <br />In an effort to ensure the financial warranty remains adequate to reclaim this site per the requirements of the approved <br />reclamation plan, DRMS updated the reclamation cost estimate and attached it to the previous (9-7-2006) inspection <br />report. An unacceptable financial warranty increase was submitted to DBMS. Efforts to get the warranty corrected <br />have been unsuccessful. <br />It has also come to DRMS' attention that Hollenbeck Inc, has been administratively dissolved by the Secretary of State <br />due to non-payment of fees. To re-instate the corporation, these fees must be paid. If not re-instated, the permit would <br />need to be transferred to another entity from whom which DRMS could accept a financial warranty. <br />Documents for the increased warranty amount must be corrected to DBMS satisfaction by September 12, 2007. <br />Additionally, evidence of re-instatement of Hollenbeck Inc. with the Secretary of State or a correctly executed <br />Succession of Operator form for this permit must also be submitted to DBMS by September 12, 2007 to ensure the <br />financial warranty is acceptable. Failure to submit these documents, in acceptable form by September 7 2, 2007 may <br />cause this matter to be scheduled for an enforcement action hearing before the Mined Land Reclamation Board. If the <br />Board finds a violation, civil penalties could be issued, the permit could be revoked and the financial warranty forfeited. <br />Responses to this inspection report should be directed to Steve Shuey at the Division of Reclamation, Mining and Safety, <br />Grand Junction Field Office, 101 South 3rtl Street, Room 301, Grand Junction, Colorado 81501, phone number 970- <br />243-6368. <br />I & E Contact Address <br />NAME <br />OPERATOR <br />STREET <br />CITY/STATEIZIP <br />Duane E. Hollenbeck <br />Hollenbeck Inc. <br />P. O. Box 902 <br />Gunnison, CO 81230 <br />cc: Carl Mount -DRMS Denver Office <br />^ CE <br />^ BL <br />^ FS <br />^ HW <br />^ HMWMD (CH) <br />^ SE <br />^ WOCD (CH) <br />^ OTHER <br />