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(Page 2) MINE ID # OR PROSPECTING ID #: M-1981-068 INSPECTION DATE: 7-13-06 OBSERVATfONS INSPECTOR'S INITIALS GRM This inspection was conducted as part of the normal monitoring program established by the Colorado Division of Minerals and Geology. The Loesch Pit is located on the north side of Interstate 70 near the Rifle Airport Exit. Doug Grant, Representative for Grant Brother Construction accompanied the inspector on site. The mine identification sign and affected area boundary markers are in place and in compliance with Rule 3.1.12. The sign is located at the entrance to the site. Boundary markers include fence lines and t-posts that clearly delineate the boundaries of Phase 1. The site is currently active. The inspector observed loaders and hocks shipping materials. Five stockpiles of various processed and pit run material were observed. The screening operation was also working at the time. No significant dust was noted. Roads leading into the site and within the pit are in good repair. All stormwater is contained on site. Sedimentation ponds are working very well. Discharge ponds are clear, with fish noted darting about. No significant infestations of noxious or other problematic weeds were noted on site during this inspection. The operator has an active weed control program that includes tamarisk and Russian Olive abatement. Although knapweed and other noxious species are present in the immediate area, there were no infestations observed other than a few tamarisk and Russian olive that are to be treated. The operator is doing a very good job of reclamation as mining is completed. The northern and western slopes of Phase one have been sloped, top soiled and seeded. Pubescent and Western Wheat Grasses were noted as doing very well. Some rice grasses and native shrubs appear to be coming in as well. In recently sloped azeas, annual non- noxious weeds such as kochia are holding the soils while grasses are establishing. No unnecessary trash or debris was observed, although some old equipment is stored along the north boundary line. Fuel tanks aze either self contained secondary containrnent or within approved structures for that purpose. The Reclamation Liability was recalculated in 2003. The inspector will update the estimate using agreed upon tasks and noting reclamation already accomplished. No issues or problems noted at this time. Responses to this inspection report should be directed to Russ Means at the Division of Minerals and Geology, Grand Junction Field Office, 101 South 3rd Street, Room 301, Grand Junction, Colorado 81501, phone no.970-241- 1117. I & E Contact Address cc: ^ CE NAME: Doug Grant ^ BL OPERATOR: Grant Brothers ^ FS STREET: P.O. Box 1027 ^ ~' CITY/STATE/ZIP: Basalt, CO 81621 ^ HMWMD (CH)