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(Page 2) MINE ID # OR PROSPECTING ID # M-2000-158 INSPECTION DATE 02/03/06 INSPECTOR'S INITIALS ESC OB38RVAT2ON8 This oral a citizen complaint inspection of the S&H Pit, File No. M-2000-158 conducted by Erica Crosby of the Colorado Division of Minerals & Geology. The mine site is located approximately 2.5 miles northwest of Platteville in weld County, Colorado. Tim Pike of Platte: Sand & Gravel LLC. and Steven O'Brian of Environment Inc. were present during the inspection. The citizen complaint letter was sent by Stan Odenbaugh and received by the Division on January 17, 2006. Stan Odenbaugh's comments are underlined and in bold followed by the Divisi.on's comments. Area #1 Stockpile of imported material along river bank- This area is located south of the processing area. According to the operation, 800 tons of inert material was hauled in from ¢e local construction site. The operator intends to use this material for topsoil. The material was dark brown with clumps of vegetation. The material appeared clean, however, the Division was unable to find any information in the permit file regarding the approval of the disposal of inert material at the S&H Mine. in order for the operator to recla;.m the site using inert material, compliance with Rule 3.1.5(9) will need to be met. A copy of the rule regarding importing inert fill can be found under the Construction Material Rules and Regulations at the Division's web page located at www.m:ining.state.co.us. The Division considers this a problem that needs to be addressed. Please: see page 3 for compliance due dates. Area #2 Niniag Closer than 400 LF Limit to the River- The operator is currently mining within 400 feet of the South Platte River at the Sand Flats Lake area. Under the original permit approval, mining could take place within 400 feet of the river if riverside and pit side armoring is in place. The Division inspected the length of the river adjacent to the area being mined. Armoring along the river consists of large and small pieces of concrete for a length of 770 feet, and appears to be well anchored into the riverbank. According to the operator, HS Resources installed armoring in early 2000 in order to protect the gas well from possible flood damage. The question becomes when pit-side armoring needs to take place. According to a map titled "Pit Slope Armoring Plan Map" dated May 22, 2001, pit slope armoring is to be done in a1:1 areas noted in green (see attached map for further detail). In addition, information in the file states that mining within 250 feet of the riverbank can proceed with :appropriate armoring of the riverside bank of the berm, and within 150 feet where- appropriate armoring of both the riverside and pitaide banks of the berm is installed. The Division surveyed the distance from the pit to the river using the GPS, and the distance from the pit to the river ranged from 203 feet to 315 feet. See attached GPs map for further detail. Based on the surveyed distance, pit side armoring is required where mining encroaches within 250 feet of the river. The approved permit states that pit armoring will take place prior to April lar of each year. Based on the information in the permit, the operator must install pit side armoring along all sections of the site that have :been mined closer than 250 feet to the river. As an alternative, the operator may backfill portions of the pit to achieve the 250-foot distance to the river. Operator must demonstrate compliance in the form of photographs of pitside armoring or backfill of the pit a:n or before May 1, 2006. Area #3 8xpoeed Area of Slurry Wall Before Bond- The area in questions is around the Sharkey's Lake area. Bags of bentonite were stockpiled on the south end of Sharkey's Lake area. The perimeter of the pit area was also disturbed on the surface to delineate where the slurry wall would be located. There was no evidence of any physical construction of the slurry wall during the inspection. Under TR-03, the operator provided a detailed plan for construction of the slurry wall that entitled the operator to obtain a bond of 20$ to install the slurry wall. Since the inspection, the operator posted a reclamation bond in the amount of $1,123,000.00 to cover the 20& coat of slurry wall construction and the existing disturbed areas. In addition, on February 16, 2006, the MLRB reapproved the AM- O1 application. Therefore, the operator is now permitted to install the slurry wall around Sharkey's lake.