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(Page 2) MINE ID # OR PROSPECTING ID # M-1998-014 INSPECTION DATE 3-14-2003 INSPECTOR'S INITIALS SSS This was apre-operational inspection of the area proposed to be added into the permit through the Amendment No. 1 application (AM-01) process. The first part of this inspection was consumed by helping Allen Sorenson (DMG Denver) with the process of taking measurements and visual observations of the north edge of Phase II where a large overburden stockpile has been placed at the crest of a steep slope that is actively being eroded by the Eagle River some 60 feet below. This area of the slope is identified as being unstable in a stability analysis submitted with the original permit application. Mr. Sorenson will be forwarding a separate inspection report for this portion of the inspection. The report will include an engineering evaluation ofwhetherthe stockpiled overburden on the crest of this slope exacerbates the instability of this slope, potentially causing slope failure resulting in various types of off-site damage. The remainder of the acreage to be incorporated into the permit lies along the current north permit boundary to the east and west of the portion of slope noted above. The Eagle River moves away from the toe of the slope and does not actively erode the base of the slope in any area except that described in the paragraph above. To the east of the evaluated slope lies a slope that gets decreasingly steep and high as it progresses eastward. This slope is fairly well vegetated with patches of trees and brush. The vegetation is primarily located on the lower portions of the slope, with exposed gravel slopes on the upper portions. There are some fences within this proposed area that need to be included in the appropriate exhibits of the AM-01 application. No springs were noted along this slope. There are two locations along this slope that have small two track roads cut into the face that provide access to the flood plain pastures below. The western portion of the amendment area consists of a small wooded drainage in the north-facing slope with a road cutting through it, just west of the Phase 1/Phase 2 delineation line. West from that drainage lies a long ,relatively flat-topped ridge where a topsoil stockpile and old ranch yard is located. There are several mining related disturbances in this currently unpermitted area such as the topsoil stockpile and the road through the drainage. These features were apparently created by the previous operator at the site, though those claims have not been substantiated. Due to the absence of an inspection, normally conducted when a successor operator takes over a mine site, the condition of the site at that time was not documented. Therefore, because this documentation is not available, because the former operator is no longer a viable company, and because the successor operator has submitted the AM-01 application to incorporate all off-site mining related disturbance into the permit area, DMG is not pursuing enforcement action for these off-site disturbances. There are several structures within the western portion of the amendment area that need to be included in the appropriate exhibits of the AM-01 application. These structures include, but are not limited to, sheds, fences corrals, roads and powedines. There are also additional features within the current permit boundary that are not shown on the application maps. These features and their construction details need to be included in the permit exhibits and their removal needs to be incorporated into the reclamation plan and cost estimate. The well, shown on the mining plan map, located on the north boundary of the Phase 1 proposed affected area appears to be an exposed pipe to a buried oil sump. The pipe shows oil at a depth of approximately 3 feet below the top of the casing. There is a shaft on the top of the casing that holds two sprockets with two chains that hang down into the oil. It is unknown what this is, but the operator indicated that he would research this and identify this structure. Responses to this inspection report should be directed to Steve Shuey at the Division of Minerals and Geology, Grand Junction Field Office, 101 South 3f° Street, Room 301, Grand Junction, Colorado 81501, phone number 970-243-6368. I & E Contact Address NAME OPERATOR STREET CITY/STATE/ZIP Rodnev Johnson Lafarste West Inc. P. O. Drawer 368 Glenwood Sarinas. Colorado 81602 cc: ^ CE ^ FS ^ HW ^ HMWMD (CH) ^ SE ^ WOCD (CH) ^ OTHER