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(Page 2) MINE ID # OR PROSPECTING ID # M-1998-071 INSPECTION DATE 04/25/07 INSPECTOR'S INITIALS ESC OBBBRVATION3 This was a pre-operation inspection of the Fryrear Pit conducted by Erica Crosby of the Colorado Division of Reclamation, Mining and Safety. Randy Schafer and Dick Fryrear were present during the inspection. The 112c Conversion Application (CN-O1) was received by the Division on March 6, 2007 for an increase in permit area from 9.9 to 40 acres. The site is located approximately 15 miles south of Haxtun in Yuma County Colorado. Mining will proceed towards the northwest. The clay gravel pit is currently 20-30 feet deep. water was noted in the pit from the 4/24/07 storm that measured 5" of precipitation. Water was entering from a small swale. The water will eventually discharge from the pit on the south end of the property and cross the county road. Mining will not continue until the water has discharged and evaporated from the site. The operator intends to mine the pit in 10 acre parcels, reclaiming the site before it moves into the next parcel towards the northwest. The operator anticipates a pit mining depth of up to 50 feet. Slopes on the existing pit have been graded to 3h:ly or less. Mining is currently taking place on the east side of the pit. Permanent man-made structures were noted adjacent to the site. in particular on the north side of the permit, power lines are within 200 feet of the affected area. The operator stated that they will not encroach within 100 feet of the lines and County Road N. On the south end of the site, the operator will need to address the existing access road and identify the access road on one of the exhibits. The operator will need to ensure that owners of structures are notified of the Conversion Application. i & B Contact Addreea ^ CE NAME Mr. Richard Fryrear ^ BL OPERATOR ^ FS STREET 08085 Co. Rd. 13 ^ HW CITY/STATE/ZIP Haxtun, CO 80731 ^ HMWMD (CH) ^ SE ^ WQCD (CH) Cc: Carl Mount; DBMS Randy Schafer