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III. COMMENTS - COMPLIANCE <br />Below are comments on the inspection. The comments include discussion of observations <br />made during the inspection. Comments also describe any enforcement actions taken during <br />the inspection and the facts or evidence supporting the enforcement action. <br />This was a complete inspection conducted by Kent Gorham of the Colorado Division <br />of Minerals and Geology. This former underground mine was reclaimed and reseeded <br />in 1996 and early 1997. The mine has achieved a Phase II bond release for the <br />majority of the disturbed area. Ron Thompson of Peak Project Management <br />represented Basin Resources Inc during the records inspection. A large storm <br />event pounded the area approximately one hour prior to this inspection. The <br />ground was wet and muddy with puddles in the low areas. <br />Availablilty of Records <br />The public copy of the mine records is kept at the New Elk mine site office <br />located 4 miles west of the Golden Eagle site. The liability insurance <br />certificate on file indicated an expiration date of July 1, 2002. Please ensure a <br />new certificate indicating the required coverage is on file prior to the next <br />complete inspection. All other records were found in compliance as indicated on <br />page 2a of this inspection report. <br />Hydrologic Balance <br />No damage or erosion was observed due to the heavy downpour. Other than road <br />culverts, very little routing of water occurs at this site. All sediment ponds <br />have been removed as approved. While field conditions allow, the operator should <br />ensure that all water monitoring sites for ground water are appropriately marked <br />and maintained. <br />Revegetation <br />The vegetation on the site still shows very little growth for the season. <br />However, soil moisture was better due to the rains immediately preceding this <br />inspection. Litter cover remains good and currently provides the majority of the <br />erosion protection. Vegetation at the two ventilation fan sites in Apache Canyon <br />is better, likely due to more favorable moisture and aspect. The NW-1 ventilation <br />site should be reseeded and mulched prior to winter. <br />Soil Methane Area <br />Due to the lack of moisture, evaluation of the area affected by methane <br />contamination returned no meaningful information. Recent rains should help <br />determine whether necrotic vegetation conditions have changed. <br />3 <br />