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(Page 2) MINE ID # OR PROSPECTING ID # M-1998-104 INSPECTION DATE 9/26/05 INSPECTOR'S INITIALS ESC OBSBRVATION3 This was an inspection of the Pine Ridge Pit conducted by Erica Crosby of the Colorado Division of Minerals and Geology. Kayette Hutchison and John Hollenbeck of ACA Products, Inc. were present during the inspection. The site is located 6 miles south of Leadville in Lake County, Colorado. The Pine Ridge Pit is a 112 sand and gravel operation, permitted for 102.4 acres whereas only 60 acres will be disturbed at any given time. The 112 permit was issued on April 27, 1998. Prior to this date, the site was permitted under M-1981-303 operated by Pine Ridge Development Company. The operator was required to obtain a new 112 Construction Materials Permit due to mining outside of the permit area. The Division holds a reclamation bond in the amount of $65,965.00. The approved postmining land use is industrial/commercial. The following observations/problems were noted during the inspection; 1. A mine identification sign was observed at the entrance to the site. Permit boundary markers were noted on site with the exception to the boundary markers to the west. The operator will need to post permit boundary markers to delineate the western boundary area. See page 3 for compliance due dates. During the inspection it was noted that the Templeton Ditch was relocated along the north permit boundary area to facilitate the mining operation. The ditch was rerouted from the northwest corner along the northern property to the location of the entrance road. Water was running through the ditch at an undetermined rate up until the entrance road where it went into a small pipe. From there, water was flood irrigating the adjacent property. According to the approved permit, ACA Products is to maintain a 15-foot off set distance from the ditch and mine up to the ditch at a 4h:ly slopes. Rather than maintain the 15-foot off set distance, ACA Products rerouted the ditch. This change is not reflected in the approved permit. The operator will be required to file a revision to the permit to address the relocation of the Templeton Ditch. The revision must contain a description of the rerouted ditch, revised maps (mine plan and reclamation plan maps), a design of the relocated ditch, and notarized agreements from the owner(s) of the ditch consenting to the rerouting of the ditch. See page 3 for compliance due dates. Topsoil and overburden piles were noted along the perimeter of the permit area. The piles will need to be stabilized to prevent wind and water erosion. The operator will need to file a revision to the permit to address stabilization of the topsoil and overburden piles. See page 3 for compliance due dates. Mining was actively taking place during the inspection. Product stockpiles were noted in the bottom of the pit. On the north side of the pit, mining related debris has been placed in the bottom of the pit. The material consists of trees, brush, screens, conveyors, cable, oil drums and other waste items. This material is not considered inert as defined by Rule 1.1(20). "Inert Material" means non-water-soluble and non- putrescible solids together with such minor amounts and types of other materials, unless such materials are acid or toxic producing, as will not significantly affect the inert nature of such solids. The term includes, but is not limited to earth, sand, gravel, rock concrete which has been in a hardened state for at least sixty days, masonry, asphalt paving fragments, and other inert solids. The operator will be required to remove the material noted above from the pit area. See page 3 for compliance due dates. If the operator intends to backfill inert material in the pit (concrete or asphalt fragments), Rule 3.1.5(9) requires the operator to notify the Division in writing if inert structural fill generated outside of the approved permit area will be used to backfill an excavated pit. Until such notice is received the operator may not backfill inert material in the pit.