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(Page 2) . MINE ID # OR PROSPECTING ID # M-79-195 INSPECTION DATE 3/9/2001 INSPECTOR'S INITIALS TAS 1. A site inspection was made of the Road Runners Rest II as part of the Division's on-going hydrologic investigation of alluvial sand and gravel operations in the Henderson area. The hydrologic investigation is in response to a number of citizen complaints received during 2000 from groundwater and surface water users in the Henderson area. The complaints allege offsite hydrologic impacts from one or more active mining operations in the Henderson area. Please see attached copies of the complaint letters. Present during the inspection was Steve O'Brian, consultant and representative for the operator. 2. Road Runners Rest II is permitted for a total disturbance of 175.8 acres. The mining plan originally specified wet mining with no dewatering. The mine plan was revised on August 6, 1998 via Technical Revision No. 3 to allow for dewatering and dry mining methods with the condition that "No pit dewatering may occur until Sububuran Sand & Gravel Co, has provided evidence that they have satisfied all appropriate requirements of the Office of the State Engineer." The reclamation plan specifies creation of one (1) large, unlined groundwater fed lake. The post-mining land uses are private recreation and wildlife habitat. The operator has posted a financial warranty of $68,500 in the form of a Certificate of Deposit. 3. On December 22, 1999 the Division approved the operator's request for a revision to the reclamation plan for a revised configuration of the lake shore to maximize potential water storage capacity and a change of post-mining land use for Z.I6 acres of batch plant, office, and shop area to industrial/commercial. The amount of financial warranty required by the Division for such revision is $120,000. To date, the operator has not submitted a replacement warranty of $120,000 or a supplemental warranty of $51,500 as requested in the December 23, 1999 approval letter. The Division considers this matter to be a problem that will require corrective actions. Please see page 4 for details. 4. The Denver Water Board and the South Adams Water & Sanitation District is now the surface owner of Road Runners Rest II via purchase agreement. Suburban Sand & Gravel Co. has retained right of entry to complete mining and reclamation. Mr. O'Brian estimates that mining will be completed at the pit within two (2) years. 5. The pit was being dewatered and dry mined at the time of inspection. Water was being pumped from the south lake and mining was occuring in the "finger" area separating the north and south lakes. The 2000 Annual Report received January 11, 2001 indicates 100.35 acres of lake surface. This inspector & Mr. O'Brian estimated that the lake surface/pit excavation averages 26' in depth for the south lake and 27' in depth for the north lake. The north lake is approximately 45 acres in size and contains at least 7' of water. The south lake is approximately 55 acres in size and contains approximately 30 acres of exposed groundwater ranging from 3' to 8' in depth. 6. A recent status report from the Office of the State Engineer (OSE) indicated that a temporary substitute supply plan and well permit are necessary for dewatering and dry mining practices at the Reclamation Pit No. 1; neither have been issued by the OSE. The OSE has listed the operator as °non-responsive" with respect to the required permits. (Please see attached OSE correspondence). The Division considers this matter to be violation of the mine plan (as specified in Item 2 above) and Rule 3.1.6(1) which states "Disturbances to the prevailing hydrologic balance of the affected land and of the surrounding area and to the quantity or quality of water in surface and groundwater systems both during and after the mining operation and reclamation shall be minimized by measures, including, but not limited to a) compliance with applicable Colorado water laws and regulations governing injury to existing water rights ... As a consequence of this violation, the Division requests that