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<br />(Page 21 <br /> <br />MINE ID # OR PROSPECTING ID # M-78-311 <br />INSPECTION DATE 07/17/97 INSPECTOR'S INITIALS TDG <br />OBSERVATIONS <br />This was a combination routine monitoring inspection and financial warranty evaluation done in response to a Succession of <br />Operator application to transfer the permit from the current permittee Ryan limited to Telluride Mining, Inc. Because the Successor <br />Operator, Telluride Mining, Inc. elected to waive their right to a 30 day processing time to allow the Division to recalculate the <br />Financial Warranty amount, the DMG permittee will continue to be Ryan Limited until the Successor Operator submits the required <br />Financial Warranty and becomes the new permittee. <br />Financial Warranty Amount <br />Since the recalculated bond amount for this operation is below the amount currently being held by the Division (S5,000.001, no <br />additional bond monies are required in order to complete the Succession of Operator process for the Hawkeye Mine. <br />Verification of Right to Enter <br />During the inspection the site contact person, Mick Carter, produced a surface and subsurface ownership map that to some eMent <br />clouded the issue of whether the current permittee Ryan Limited or the Successor Operator Telluride Mining, Inc. currently has the <br />right to enter the entire 9.7 acre State reclamation permit area and conduct mining operations within that area. As such, it will be <br />necessary that the permittee or Successor Operator provide adequate written documentation to the Division within 60 days verifying <br />that right of entry by the permittee or Successor Operator still exists. The Division has attached to this inspection report the correct <br />legal description, permit boundary, and original lease holder information taken from the approved Division of Minerals and Geology <br />Reclamation Permit Application for the Hawkeye Mine. <br />Routine Inspection Topics <br />Signs and Markers - No mine identification sign was in place at the time of the inspection, and no permit area perimeter markers <br />were observed. As such, a mine identification sign needs to be installed within the next 60 days at the entrance to the site. The <br />sign needs to show the DMG permit number IM-783111, the name of the site (Hawkeye Minel, and a statement that a reclamation <br />permit has been issued by the Colorado Division of Minerals and Geology. In addition, the permit area perimeter delineated on the <br />attached map of the site will need to be accurately marked on the ground by installing a series of durable perimeter markers at each <br />of the corner points shown on the attached map (points "HAWKEYE,2" through "HAWKWYE,7"1. This work will also need to be <br />completed within 60 days. <br />I & E Contact Address <br />NAME Mr. Joe Baldwin <br />OPERATOR Ryan Limited <br />STREET 1641 - 6500 Road <br />CITY/STATE/ZIP Montrose. CO 81401 <br />cc: Sr. Specialist, DMG <br />^ CE <br />^ BLM -Durango Office <br />^ FS <br />^ HW <br />^ HMWMD ICHI <br />^ SE <br />^ WOCD ICHI <br />^ OTHER <br />