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<br />(Page 21 <br /> <br />MINE ID # OR PRO:iPECTING ID # M-87-064 <br />INSPECTION DATE 11 /23198 INSPECTOR'S INITIALS WHE <br />OBSERVATIONS <br />This inspection occurred as part of DMG routine monitoring plan for permitted operations. John Dillon <br />accompanied the DMG inspector throughout the inspection. Mining operations were dormant during the time <br />of this inspection. Operator had not commenced in-stream excavation activities for this season. However <br />processing operations were active. DMG holds 56,800 financial warranty. <br />The Dalton Land & Cattle Pit is approved for 67 acres affected area, for excavation of alluvial materials <br />deposited above the low water elevation of the Animas River. Affected area within the river channel, 52.5 <br />acres, extends Ei000' upstream from CR 252, Trimble Lane bridge. Material stockpile and processing yard, <br />approximately 1.4.5 acres, is located along the west bank of the Animas River, immediately upstream from <br />Trimble Lane bridge. The approved reclamation plan indicates that the processing yard will be reclaimed to <br />support pasture land and wildlife habitat post mining land use; reclamation of the Animas River channel <br />includes removal of low water crossing culverts, haul road, isolation dikes and grading to conform with <br />undisturbed portions of the channel. <br />Mine entrance/haul road was well maintained. Permit area was sufficiently delineated. Previous mining <br />operations appeared to have been limited to approved areas. Excavation operations had not commenced for <br />the year, mining equipment and low water crossing culverts were not observed within the Animas River <br />channel. Operator has installed concrete blocks (8'L " 3.5'W " 3.5'H) along approximately 500' of the east <br />channel bank to stabilized against erosion. Concrete blocks were laid in terrace configuration, 3 tiers high. <br />Records - DMG records indicate that the operator has submitted the annual fee for 1998. However, the <br />annual report form was returned to DMG without being completed. Please find enclosed, copy of the blank <br />annual report form, as received by DMG. Submittal of an annual report is required by Rule 1.15. Please <br />complete the enclosed annual report form and return to the DMG Durango Office, 484 Turner Drive, Building <br />F, Suite 101, Durango, CO 81301, by December 31, 1998. <br />COE Permit - During December 1996, the US Army Corps of Engineers issued Permit Na. 199475346 to <br />Sandco, for the Dalton Land & Cattle Pit, under the authority of Section 404 and 401 of the Clean Water Act. <br />Financial Warranty - DMG has reviewed the cost of reclamation for the Dalton Land & Cattle Pit and has <br />determined that the current financial warranty, in the amount of 56,800, is insufficient to ensure reclamation. <br />DMG preliminary reclamation cost estimation totals 574,022. Pursuant to Rule 4.2.1(2) the operator has sixty <br />l60) days from the date of this notice to provide additional financial warranty to total not less than 574,022. <br />DMG reclamation cost estimation is based upon the approved reclamation plan and current conditions <br />observed during the inspection. The operator is encouraged to contact DMG staff at the DMG Durango Office, <br />phone 247-5469, to discuss permitting options and/or modifications to the existing permit whereby the cost <br />of reclamation may be reduced significantly. <br />I & E Contact Addre:~ <br />NAME John Dillon <br />OPERATOR Sandco.lnc. <br />STREET P.O. Bax 4440 <br />CITY/STATE/ZIP Durango. CO 81302 <br />cc: Tom Gillis, DMG <br />X COE, Nick Mezei <br />^ BL <br />^ FS <br />^ HW <br />^ HMWMD (CHI <br />^ SE <br />^ WOCD (CHI <br />^ Other <br />