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(Page 2) MINE ID # OR PROSPECTING ID '~ M-1981-325 INSPECTION DATE 8/26/04 INSPECTOR'S INITIALS ESC This was an inspection of the West Tennessee Pit conducted by Erica Crosby of the Colorado Division of Minerals and Geology. Chris Roeder of Webster Sand and Gravel was present during the inspection. The mine site is located 6 54 miles northwest of Leadville in Lake County, Colorado. A 112 Permit was approved on April 22, 1982 for a permit area of 139 acres, and 34 acres of maximum disturbance. The Division holds a reclamation performance bond in the amount of $33,500.00. A mine sign was posted at the entrance to the site, and permit boundary markers were noted. Mining has significantly progressed since the Divisions last inspection. Mining is currently taking place on the western end of the permit area. The active pit area is approximately 30 feet deep. A highwall is exposed on the western side for a length of approximately 1,000 feet. The upper 8 feet of the deposit consists of gravel, and the remaining 22 feet is mined for sand. The operator does not mine below the groundwater table. Areas in advance of the pit towards the southwest have been stripped of the 8 feet of gravel reserves. The Division is unclear as to the total acreage disturbed to date at the site. The Division will schedule the site for an aerial inspection, and determine the area of affected land based on the aerial photographs. The photographs will also assist the Division in recalculation of the reclamation bond. The $33,500.00 was set in 1982 for a maximum disturbance of 34 acres. Notice of any bond adjustment will be sent under separate cover. A topsoil pile was noted along the south corner of the permit area, but does not appear to be sufficient to reclaim the site to the required depth of 6-10 inches (replacement depth established in Division's memo of 2-18-1982). The operator stated that 60,000 tons of topsoil is currently being hauled in from the Homestead Trout Club. The material is available from a pond that has recently been dredged. In order for the operator to use this material for reclamation of site, the standards of Rule 3.1.5(9) must be met. Attached is a Dopy of the Rule that outlines the specifics of what will need to be included in the notice to use the material. as a substitute for topsoil. The notice must be submitted by October 29, 2004. Please see page 3 for further detail. The site consists of wash ponds, crushing and screening facilities and old mining related equipment. The mining equipment includes old trucks, loaders, pipes, trailers, oil drums and scraps of metal. This equipment appears to be abandoned, and not necessary for the current mining operation. The Division will include an estimated cost to remove all of this equipment in order to achieve the postmining land use of forest and wildlife habitat. A 2-3 acre area north of Tennessee Creek appears to have been disturbed by mining, and may be outside of the approved permit area. Chris Roeder was not sure if Webster Sand and Gravel mined this area. Once the aerial photographs are obtained and reviewed, the Division will make a final determination. If the area is outside of the permit boundary, the Division may need to conduct another inspection to determine if the operator may be in violation for mining outside the permit area. I & 8 Contact Address ^ CE NAME Daryl Webster ^ BL OPERATOR Webster Sand & Gravel ^ FS STREET PO Box 541704 ^ HW CITY/STATE/ZIP Grand Prairie, TX 75054-1704 ^ HMWMD (CH) ^ SE ^ WQCD (CH) Cc: Carl Mount; DMG~(via a-mail)