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(Page 21 MINE ID # OR PROSPECTING ID #: M-1987-178 INSPECTION DATE: 2-1-07 INSPECTOR'S INITIALS GRM OBSERVATIONS This inspection was conducted as part of the normal monitoring program established by the Colorado Division of Reclamation, Mining and Safety for permitted sites. The inspection was requested by the operator to discuss options for possib]e mine and reclamation plans in relation to irrigation ofthe reclaimed aeeas. Mr. AIIen Parkerson met the inspector on site. The 31 Road Pit is located at 31 Road and C %2 in Grand Junction Colorado. The 112c permitted site is actively mining and doing concurrent reclamation. The western portion ofapproximately 20 acres has been mined out and is currently under reclamation. The inspector notes slopes are 3:1 along the northern aspect of the pit. It is observed that approximately 2 to 3 feet of topsoil aze being distributed over the pit floor. There appears to be no debris or other materials mixed with the topsoil. Mining activities aze focused on the central part of the permit azea and working towards the east. The inspector noted the crusher and stacker working, with multiple piles of processed materials within the active mining area. No other equipment was noted at this time. The mine identification sign and affected area boundary mazkers aze in place and in compliance with Rule 3.1.12. The sign is posted at the main gate at the entrance to the facility. Boundary markers are primarily fence lines and day lighted ridge line to the north. The primary reason forthe inspection/visit was to discuss the possibilities of running pipe from the irrigation head gate to the reclaimed area for irrigation of agricultural crops. The current plan calls for water to be pumped from the existing pond up to the fields. The operator is exploring the piping option to eliminate the need for pumping by using gravity feed. The main issue is whether the proposed change would be a Technical Revision or an Amendment. The inspector conferred with Denver Supervisor Cazl Mount and it was decided that the proposed change would have to be an amendment. The reason being is that the azea were the piping would be laid is outside the permit boundaries and there would be some disturbance although probably minor in construction. The other issue is if there was for some reason a break in the pipe, it would cause off=site damage if not included within the permit boundaries. This takes into account that the land is owned by the operator and that the piping would remain after the reclamation was completed. The operator's options are to either a) submit an amendment to add in the area from the head gate to the permit boundary, b) move forward with a possible amendment for the entire area under expansion consideration, c) submit a new permit application for the azea and note the irrigation piping or d) continue as originally planned and use pumps for the reclaimed areas. No other issues were noted at this time. The financial warranty was reviewed in 2002. Substantial reclamation work is under way and no issues are noted at this time. The Bond will be recalculated next time so that work done can be credited or when an amendment is filed.