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(Page 3) • MINE ID # OR PROSPECTING ID # M-82-147 INSPECTION DATE 2/28/2001 INSPECTOR'S INITIALS TAS snowmelt runoff in pit bot~=om Stage 3 37-acre NE cell has been mined to shale bedrock and partially reclaimed, north & east slopes have been lined and graded to 3:1, west slope unlined and left at 2:1 - will be mined through, has exposed groundwater throughout floor of pit averaging 2' in depth 28-acre NL9 cell has been disturbed, mining is nearly complete, has approximately 6 acres of groundwater exposed in floor of pit and dewatering trenches 27-acre SW cell has been disturbed, mining is nearly complete, has approximately 3 acres of groundwater exposed in pit floor and dewatering trenches Stage 4 currently undisturbed farmland, approximately 225,000 cu.yd. fill material available for backfilling (material that is at least 2' above the na[ural groundwater surface) 5, A recent inquiry from the OSE indicates that current dewatering, dry mining, and water management practices at the Nyholt Pit require an approved well permit and an approved temporary substitute supply plan. Documentation of such approvals could not be produced at the time of inspection. The attached correspondence from the OSE indicates that the required approvals have been delinquent since 12/31/92. The Division considers these activities to be a violation of the mine and reclamation plan as well as the requirements of Rule 3.1.6(1). As a consequence, the Division requests that the operator complete one of the following options on or before June 12, 2001: Option A Submit written evidence from the OSE of compliance with all their permitting requirements for existing dewatering, dry mining, and water management activities at the Nyholt Pit aad their approval of the liner design. Submit a copy of the OSE approved liner design and specifications as a Technical Revision to the permit. (The Division will then recalculate the amount of financial warranty required). Option B Backfill all pit excavations and near surface depressions with exposed groundwater/process water to an elevation that is within four (4) feet of the ground surface or at least two (2) feet above the exposed water surface, whichever is higher. The backfill material should consist of overburden or clean, inert fill material. Option C Submit a financial warranty adequate to cover the cost of 100$ liner installation for the three (3) water stora!Ie facilities, ie: 18,500 linear feet of liner at a 3:1 slope. The Division has calculated a. total reclamation cost of $730,400 to accomplish such tasks. See attached reclamation cost estimate. Please see page 5 for corrective actions. In addition, the Division will be sending a Reason To Believe letter to the operator and scheduling this matter for consideration before the Colorado Mine Land Reclamation Board at the June 27-28, 2001 meeting.