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(Page 2) MINE ID # OR PROSPECTING ID # M-1977-348 INSPECTION DATE October 25, 2005 INSPECTOR'S INITIALS CBM OBSERVATIONS This was an inspection conducted at the request of the operator to determine progress of reclamation activities and to further consider conditions and boundaries of the partial release on areas in the north and east of the present permitted area. These areas have been sold (but have not yet closed) and Holcim requested release since they will no longer have ownership control over these areas. Attending the inspection were Carl Mount of the Division of Minerals and Geology, Gordon Benton of Holcim, Kallie Bauer and Bill Schenderlein of Applegate Grcup (consultant to Holcim). Acreage Release AR-01 was found complete and therefore submitted to the Division on September 6, 2005. The operator has reclaimed areas to the north of the active pit and is conducting large-scale reclamation aver the entire mine site this year. The areas subject to the acreage release request are the reclaimed areas in the far north part of the pit area (approximately 15 acres) and areas to the east of the haul road (east of Pits AS and A6 and more or less the northern 2/3 of unmined Pit E4 and all of unmined Pit E5) that were never mined or disturbed by the mining operation. A graphic display of these areas is on maps submitted and received by the Division on August 30, 2005. Maps received by the Division of Minerals and Geology on November 2, 2005 (following this inspection) superceded these maps. The inspection of October 3, 2005 revealed three problem areas that were within the area that is the subject of this release request. The October 25, 2005 inspection revealed that the two gullies found east of the haul road have been treated adequately with riprap and, subsequent to the inspection, the Division of Minerals and Geology has received information indicating that the riprap material used was hard and durable enough and bedded correctly so that it will serve the purpose of adequately controlling erosion in the gully areas. The other area found to be a problem in the October 3, 2005 inspection are the bare rock dip slope walls of former pit A7. The maps received on November 2, 2005 have removed this area from the proposed release area. In addition, minor disturbances were still noted to the east of the haul road. The operator has now adequately graded the safety berm on the east side of the main haul road. The limit to the release area is just at the base of this regraded berm. The operator should be aware that, with the boundaries for the release request as they are drawn on the maps received by the Division on November 2, 2005, the permit boundary will be at the easternmost present disturbance of the haul road and no disturbance will be allowed east of the haul road from approximately the halfway point of pit A5 to the north. If disturbance to the east occurs, the operator could be cited for mining outside the presently approved boundaries or, if the disturbance were greater than 2 acres, for mining without a permit. Since the operator has changed the maps defining the release area and treated areas of possible increased erosion to control such erosion, the Division of Minerals and Geology is approving Acreage Release Request No. 01 as of October 25, 2005. The official letter approving such request will be sent under separate cover as soon as the Division analyzes the exact acreage contained within the permit area at the present time and justifies the total acreage amounts in its database. During the inspection the angle of repose slopes just west of the W indsor Reservoir and Canal Company Ditch (which bounds part of the southernmost permit area near the cement plant site) were inspected. Some of these slopes appear to be vegetated sufficiently to pass bond release criteria and the operator is encouraged to define these areas and change the reclamation plan for these areas only to allow leaving the angle of repose slopes. This could be done as a technical revision to the permit. No accelerated erosion seems to be taking place on these slopes and there are mature shrubs growing on them at this time. In general, reclamation on other areas of the mine is proceeding well. The operator has contracted to Peter-Kiewit to do the reclamation and this contractor had two D-10 and two D-9 bulldozers working on the project during the inspection. Slopes in the A6 pit area are almost completely done but topsoil still has not been replaced on some of the slopes in the northern part of the pit along the west facing slope (east pit slope). The operator should attempt to replace brownish colored material over the grayish, shale material if revegetation success is desired. It was clear from looking at other areas of the mine disturbance that vegetation cover over several growing seasons was much better on areas covered with the brown colored material. Much sloping has been done in the A5 pit area also. The operator's contractor is blasting the eastern highwall in areas that cannot be ripped and dozed into the pit. Slopes are being established at from 2H:1 V to 3H:1 V. This is acceptable but the operator should be aware that the slopes that are being established have lengths of over 300 feet and the operator is encouraged to install some sort of erosion control in the form of contour terraces or furrows so slope lengths do not exceed 100 feet or even less depending on slope steepness. The operator may wish to contact the local office of the Natural Resource