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(Page 31 MINE ID 11 OR PROSPECTING ID J/ M-1998-080 INSPECTION DATE 9/5/02 INSPECTOR'S INITIALS WHE Notice to Increase the Financaa! Warranty . Pursuant to Rule 4.2.1, and based upon the above described conditions, DMG has reviewed the current cost of reclamation, totaling 59,972. Therefore, the existing 56,347 financial warranty appears insufficient to ensure reclamation. Please find enclosed, copy of DMG's reclammation cost estimation, dated September 27, 2002, totaling 59,972. Please note that portions of the increased cost of reclamation result-from the operator exceeding the 3 acre affected area limitation, approved in the original application. Even though the operator may have exceeded the original 3 acre limitation, mining and reclamation activities appeared well within the approved permit boundary. Therefore, the acreage exceedence does not appear,to.be a violation of permit conditions or of the Act and Rules. However, the amount of financial warranty must be adjusted accordingly to accurately reflect the current cost of reclamation. Pursuant to Rule 4.2.112, the operator has 60 days from the signature date of this inspection report, to post 53,625 additional financial warranty to ensure a total financial warranty not less than 59,972. Alternately, the operator may elect to conduct reclamation on portions of the affected land to reduce the current cost of 'reclamation and thereby ensure the sufficiency of the existing financial warranty. Should the operator elect to conduct reclamation for portions of the permit area, the same deadline applies. If the operator disagrees with this Notice to Ihcrease the Financial Warranty, DMG will schedule the matter for a hearing before the Board.. Should the operator fail to ensure the sufficiency of the financial warranty by the statutory deadline, DMG may schedule the matter for Formal Board Hearing for possible violation for failure to maintaih the financial warranty. Such violation may result in permit revocation. Responses to this inspection report should be directed to the Division of Minerals and Geology, 701 Camino del Rio, Room 125, Durango, Colorado 81301,'Attn: Wally Erickson, phone no. 970-247- 5469. I & E Contact Address NAME OPERATOR STREET CITY/STATE2IP cc: Tom Gillis, DMG ^ CE Fred Hollev X BLM, Loren Wickstrom H & H Stone ^ FS P.O. Box 162 ^ HW Dove Creek, CO 81324 ^ HMWMD (CH) ^ SE ^ WOCD (CH) ^ OTHER