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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-1987-044 <br />INSPECTION DATE 12/21/05_ INSPECTOR'S INITIALS WHE <br />OBSERVATIONS <br />This inspection occurred as part of DMG's routine monitoring program for permitted operations. The <br />Walker Pit is approved for 3.4 acres affected land for extraction of an alluvial sand barfrom the Animas <br />River. Affected lands will be reclaimed to support pastureland post-mining land use. DMG holds $3,471 <br />financial warranty. Permit status is active. One photo accompanies this report. <br />Mining activities appear to be occurring within approved areas in accordance with permit conditions and <br />the Act and Rules. Given the minor requirements of the reclamation plan the $3,471 financial warranty <br />appears sufficient to ensure reclamation. <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. 970-247-5469. <br />I & E Contact Address <br />NAME Dave billion <br />OPERATOR Sandco.lnc. <br />STREET P.O. Box 4440 <br />CITY/STATE/ZIP Durango, CO 81301 <br />cc: Bruce Humphries, DMG <br />^ CE <br />^ BL <br />^ FS <br />^ HW <br />^ HMWMD (CH) <br />^ SE <br />^ WOCD (CH) <br />^ OTHER <br />