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(Page 4) MINE ID # OR PROSPECTING ID # M-1998-080 INSPECTION DATE 9/5/02 INSPECTOR'S INITIALS WHE The following problems (PBI and/or possible violations.IPV) land suggested corrective actions) were identified during this inspection. The problems should be corrected by the dates given, or they will become possible violations. The possible violations should be corrected by the dates given to reduce their severity when considered by the Mined Land Reclamation Board. The inspector noted on the previous page should be notified of all corrective actions taken. PROBLEMS/POSSIBLE VIOLATIONS AND CORRECTIVE ACTIONS 1. Mine identification sign, required by Rule 3.1.12(1), was not observed. CORRECTIVE ACTION: By October 28, 2002, within 30 days from the signature date of this report, post a mine identification sign in accordance with Rule 3.1,12(1-. Please send photographs of the posted sign and markers to the DMG Durango Office, 701 Camino del Rio, Room 125, Durango, CO 81301, to the attention of Wally Erickson. 2. Pursuant to Rule 4.2.1, DMG has reviewed the current cost of reclamation and has determined that the existing 56,347 financial warranty is insufficient to ensure reclamation. DMG reclamation cost estimation, dated September 27, 2002, indicates that the current cost of reclamation totals 59,972. CORRECTIVE ACTION: Pursuant to Rule 4.2.1(2), please ensure that one of the two following options are completed by November 26, 2002, within 60 days from the signature date of this report: a. Post 53,625 additional financial warranty, to ensure a total financial warranty of not less than 59,972; OR b. Conduct reclamation on portions of the affected lands to ensure that the current cost of reclamation not exceed the existing 56,347 financial warranty. CORRECTION DATE October 28. 2002 PB or PV: PB TOPICISi: SM November 26. 2002 PB or PV: PB TOPICIS): FN Attachment: Certificate of Service Enclosure: DMG reclamation cost estimation,-dated 9/27/02, totaling 59,972