INSPEC22992

• Permit No: M1984043
• IBM Index Class Name: Inspection
• Doc Date: 5/31/2006
• Doc Name: Inspection Report
• From: DMG
• To: Pelino Inc.
• Inspection Date: 5/19/2006
• Media Type: D
• Archive: No

(Page 2)
MINE ID # OR PROSPECTING ID # M-1984-043
INSPECTION DATE 5/19/06
INSPECTOR'S INITIALS ESC
This was a citizen complaint inspection of the Jesse Lee site conducted by Erica Crosby of
the Colorado Division of Minerals and Geology. Scott Pelino of Pelino, Inc. and Clarence
Champion representing the landowner were present during the inspection. The site is located
3 miles southeast of Buena Vista in Chaffee County, Colorado.
On April 3, 2006 the Division received a citizen complaint letter from V. Paul Moltz
regarding concerns and possible violations in regards to the current Jesse Lee Pit which
include, boundary line locations, surface and groundwater, construction equipment storage,
traffic counts, reclamation, stormwater management, and air pollution permits. The
inspection report will address each of the topics noted in the citizen complaint letter;
Summary:
The Jesse Lee pit is a 110(2) surface placer operation, permitted for 9.8 acres. The
approved legal description is NE ~ of the NE ~ of Section 33, T 145, R 78W of the 6~" P.M. The
permit was issued on July 25, 1984. The permit was transferred from Pridemore Construction
to Kerr & Son Trucking on August 27, 1999. The permit was recently transferred from Kerr &
Son Trucking to Pelino, Inc. on February 6, 2006. The Division holds a reclamation bond in
the amount of $16,000.00. The approved postmining land use is rangeland.
Houndary Line Locations:
In the file, there appears to be two maps that depict the permit boundary location. The
first map depicts an area of 9.8 acres, which includes a parcel to the east that crosses the
Arkansas River. The second map depicts the lease tract west of the river that is 8.03 acres
in size. All of the past mining has occurred west of the Arkansas River, thus the 8.03-acre
tract map appears to be more relevant. The 8.03-acre track was recently surveyed by the
operator to determine the mining boundary limits.
The major problem appears to be the issue of the permit boundary location on the north end of
the site. A fence line on the northern permit area appeared to mark the northern boundary
location, which represented the section line between Section 28 and Section 33. However, the
site was recently surveyed and marked by the current operator, and it appears that the fence
line did not represent the section line between Sections 28 and 33. According to the survey,
the section line and thus northern permit boundary, is approximately 255 feet south of the
existing fence line.
Historically, the site has been disturbed by mining related activity as noted in the annual
report maps that are on file. Aerial photos dating back to 2001 depict this area as
disturbed by at least the previous mine operator, Kerr & Son Trucking. More recent
disturbance was noted in this area, but the operator has ceased mining in thin area until the
permit boundary issue is resolved.
The Division used a Trimble GeoXT Global Positioning System (GPS) to determine the permit
boundary of the mining operation based on the survey markers identified by the operator. The
Division collected data by traversing the permit boundary location, the area outside of the
permit area, and a retail sales area. The following acreages were noted:
The perimeter of the recently marked area west of the Arkansas River totaled 8.06
acres.
The area mined outside of the permit boundary to the north totaled 3.34 acres.
The storage area totaled 0.88 acres.
The data stored in the GPS unit was downloaded into the Pathfinder Office software. The
GeoXT has submitter level of accuracy. See attached map for further detail. Based on the data
collected by the GPS, the disturbed area outside the permit area is approximately 3.34 acres
(not including the storage area, see discussion below). Because the operator is approved for
a total of 9.8 acres (on only 8.03 acres west of the Arkansas River), mining operations have
been conducted outside of the approved affected area boundary. Therefore, there is a reason
to believe that a violation exiete for mining outside the approved affected area or that the
operator is mining without a permit.