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(Page 3) <br />MINE ID # OR PROSPECTING ID # M-1977-297 <br />INSPECTION DATE 10/18/02 <br />INSPECTOR'S INITIALS WHE <br />Evidence of recent heavy precipitation was observed throughout the lower end of the permit area. <br />Tracks of Deer, Desert Big Horn, Mountain Lion, and man with dog were observed in the dried <br />mud. Erosion to the affected lands and sedimentation to off-site areas appeared to have been <br />appropriately minimized by the numerous sediment containment basins and sediment control <br />berms, previously constructed by the operator. However, the capacity of the sediment control <br />structures appeared to have been nearly consumed by recent precipitation events. Maintenance <br />of the sediment control structures appears necessary to ensure the continued function of the <br />structures and compliance with the performance requirements of Rule 3.1.5(3), 3.1.5(10), 3.1.6(1) <br />and 3.1.6(3). <br />Vent Hole: Concrete pad with steel plate cover for the vent hole appeared intact. The safety <br />fence surrounding the vent hole was sagging but sufficiently intact to further safeguard the <br />opening. <br />Burros 5 Shaft: The Burros 5 shaft had been backfilled during 1998 reclamation activities. Two <br />Butler type buildings with concrete foundation pads appeared intact. A steel water tank, visually <br />estimated at 3'H * 3'W * 6'L, was located on the slope above the buildings. A concrete pad and <br />vault remained from a previously removed building. <br />Burros 7 Shaft: The access road from the Burros 5 area to the Burros 7 area had been reclaimed. <br />The Burros 7 shaft had been backfilled during 1998 reclamation activities. During that same time, <br />reclamation backfilling and grading of the Burros 7 waste rock stockpile had been completed. The <br />headframe and hoist house remained intact, per BLM directives and as approved under TR-02. <br />Financial Warranty: DMG has estimated the current cost of reclamation at 520,227. Therefore, <br />the existing 523,250 financial warranty, posted with DOE, and the 5100 bond, posted with DMG, <br />appears sufficient to ensure completion of reclamation. Please find enclosed, copy of DMG's <br />11/6/02 reclamation cost estimation, totaling 520,227. <br />No problems or possible violations were observed. <br />Responses to this inspection report should be directed to the Division of Minerals and Geology, 701 <br />Camino del Rio, Room 125, Durango, Colorado 81301, Attn: Wally Erickson, phone no. 970-247- <br />5469. <br />I & E Contact Address <br />NAME Don Coram <br />OPERATOR Gold Eagle Mining. Inc. <br />STREET 845 East Main Street <br />C17Y/STATE2IP Montrose. CO 81401 <br />cc: Harry Posey, DMG <br />^ CE <br />^ BL <br />^ FS <br />^ HW <br />^ HMWMD (CH) <br />^ SE <br />^ WOCD ICHI <br />^ OTHER <br />