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(Page 3) MINE ID # OR PROSPECTING ID # M-77-436 INSPECTION DATE October 27, 1999 INSPECTOR'S INITIALS TAS Department of Health. The disturbance in the Parcel E area is not consistent with the approved conditions of the mine plan for several reasons. First, mining is approved for wet mining with no dewatering. The problem of dry mining was also noted by the Division in its August 28, 1998 inspection report although the requested corrective measures were not completed by the previous operator. Second, the Parcel E area disturbance is outside the scope of the maximum disturbances allowed under the terms of Technical Revision No. 1 approved by the Division on March 20, 1996. (The unreclaimed pit area shall not exceed 13 acres, the topsoil and overburden stockpile areas shall not exceed 4 acres). See attached 3/20/96 approval letter and conditions. The Division considers the current disturbance in the Parcel E area to be a problem that will require corrective actions. In order to resolve this problem, the Division requests that the operator submit two (2) separate technical revisions on or before December 24, 1999. One technical revision will need to address the change from wet mining to dry mining techniques. This revision request must include an assessment of hydrologic impacts expected to groundwater in the affected land and surrounding area during mining. At a minimum, the revision request should include an inventory of all well owners within 600 feet of the dewatered pit during maximum disturbance, a map showing the location of all such wells, an assessment of the cone of depression expected during maximum pit disturbance, and an assessment of whether any of the well owners will be adversely affected. A second technical revision will need to address the maximum disturbance expected an any one time and include associated reclamation costs for such disturbance. At a minimum, this revision request should include the cost to reclaim all existing disturbances at the Tower Pit No. 1. See page 5 for corrective actions. Finally, the 11 acre disturbance in the Parcel E area is considered to be a problem as the existing financial warranty is not adequate to cover the cost of reclamation for this disturbance. In order to cover the outstanding reclamation liability created by the additional 11 acre disturbance, the Division requests that the operator submit an additional $11,000 financial warranty or replacement warranty of $69,000 on or before December 10, 1999. See page 5 for corrective actions. 8. Review of the reclamation plan for the Tower Pit No. 1 indicates that the approved seed mix for shoreline and surrounding areas consists of only three (3) grasses to be drill seeded at a rate of only 2.65 lbs/Acre P.L.S. The Division recommends that the operator review the approved seed mix (blue grama, sideoats grama, and western wheatgrass) and evaluate whether a revised seed mix and seeding rate might be more appropriate for the sandy soil and post- mining land use desired at the Tower Pit No. 1. The Division is willing to provide technical assistance and/or recommendations for a revised (improved) seed mix. Any desired changes to the approved seed mix will need to be submitted to the Division for approval. Such changes can be processed via the technical revision process.