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(Page 2) <br />MINE ID d OR PROSPECTING ID # M-1977.298 <br />INSPECTION DATE 11/4;0 INSPECTOR'S INITIALS WHE <br />OBSERVATIONS <br />This inspection occurred as pan of DMG's review of the operator's request for release of 2 acres at the <br />D-2 shaft area and S383 reduction in financial warranty for completion of reclamation (SR-01). <br />The Deremo Snyder Mine is located approximately 5 miles west of Egnar, in portions of Sections 35 and <br />36, T43N, R2W, NMPM, and in portions of Sections 1 and 2, T42N, R2W, NMPM, San Miguel County. <br />The permit is approved for 35.69 acres affected area which includes the D-1 mine area, D-2 mine area <br />and Snyder mine area. Affected lands will be reclaimed to support wildlife habitat and general agriculture <br />post mining land use, Operator has commenced final reclamation for all lands affected by the mining <br />activity. DMG holds $132,938 financial warranty. <br />D-2 Shaft - The D-2 shaft, 4' diameter and 777' deep, was permanently safeguarded in accordance <br />with the plans approved in TR-04. The hoist and compressor building remain intact, by landowner <br />request and as approved in TR-04. The entire D-2 shaft area was surrounded by chain link security <br />fence. <br />Financial Warranty - DMG has reviewed its 12/17/02 reclamation cost estimation and has <br />determined that $132,555 financial warranty is sufficient to ensure reclamation. <br />Staff Recommendation for SR-01 -Observation made during the inspection and recorded in this <br />report indicate that the operator has completed reclamation for the lands enclosed within the security <br />fence at the D-2 shaft area in accordance with the approved reclamation plan and Act and Rules. On <br />December 4, 2003, DMG approved SR-01. <br />Inspection Topics Not Associated with SR-01 <br />Bigler Spoil Pile - Not addressed under SR-Oi. Backfilling, grading and topsoil replacement for the <br />waste rock stockpile had been completed in accordance with the reclamation plan and the Act and <br />Rules. Slopes were graded to stable configuration, not steeper than 3H:1 V, top of the stockpile had <br />been graded for drainage control. Vegetative cover was present but stressed due to regional drought <br />conditions. Vegetative cover did not appear sufficient for release requirements for all portions of the <br />Bigler Spoil Pile (Rule 3.1.10(1)). <br />D-1 Spoil Pile - Not addressed under SR-01. Backfilling, grading and topsoil replacement for the <br />waste rock stockpile had been completed in accordance with the reclamation plan and the Act and <br />Rules. Slopes were graded to stable configuration, not steeper than 3H:1 V, top of the stockpile had <br />been graded for drainage control. Vegetative cover was present but stressed due to regional drought <br />conditions. Vegetative cover did not appear sufficient for release requirements for all portions of the <br />D-1 Spoil Pile (Rule 3.1.10(1)). <br />D-2 Spoil Pile - Not addressed under SR-01. Backfilling, grading and topsoil replacement for the <br />side slopes of the waste rock stockpile had been completed in accordance with the reclamation plan <br />and the Act and Rules. Slopes were graded to stable configuration, not steeper than 3H:1 V. <br />Vegetative cover was present but stressed due to regional drought conditions. Petroleum <br />Contaminated Soils (PCS) had been relocated to the top of the spoil pile for final treatment in <br />