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(Page 2) MINE ID # OR PROSPECTING ID # M-2006-003 INSPECTION DATE 2/24/06 INSPECTOR'S INITIALS ESC O83HRVATION3 This was a pre-operation inspection of the Parker/Dersham Sand and Gravel Site, File No. M- 2006-003, conducted by Erica Crosby of the Colorado Division of Minerals & Geology. Jeff Gregg of Hall Irwin Corporation and Danna Ortiz of Civil Resources, LLC were present during the inspection. Hall Irwin Corporation filed a new 112 Construction Materials Application with the Division on January 17, 2006. The Division's recommendation due date is set for April 17, 2006. One objection to the application has been filed to date, Kerr Mc-Gee, regarding future development of oil/gas wells. The mine site is located approximately 0.75 miles west of Highway 85 on Baseline Road just north of the City of Brighton in Weld County, Colorado. The site is north and south of the Hall-Irwin Baseline Resources Site, permit no. M-1997-056. The applicant proposes a 52.3- acre permit area on two separate parcels owned by Valerie & Robert Parker and Lot Holding Investments, LLC iformerly Dersham). Most of the property is currently under agricultural production. The proposed poatmining land use is pasture land and developed water resources. Phases 1 and 2 are on the Parker property. The area will be dry mined and reclaimed to pastureland. According to the operator, material will be conveyed to the Baseline Resources site. In addition, all dewatering and sediment controls will be located on the Baseline property. The operator will need to account for these features in the Baseline permit in the form of a revision to the permit. Material from Baseline will be used to backfill the pit above the ground water table. The operator will need to address the importation of inert fill into the permit area as specified in Rule 3.1.5(9). A ditch that will be mined through and relocated will separate Phases 1 and 2. The operator will need to obtain a notarized letter from the owners of the ditch to allow for the mining and relocation of the ditch. The dewatering of a pit without a slurry wall in place may have adverse impacts to adjacent well owners. Impacts to surrounding well owners will need to be addressed by the applicant. Phase 3 is located on the Lot Holding investments, LLC iformerly Dersham) property. This area will be sealed off with a slurry wall prior to the exposure of groundwater. Slopes will be mined at 3h:ly to protect the liner and avoid future backfilling of the pit. The landscape sales yard will be moved from the Baseline site into Phase 3 of the Parker/Dersham site in order for the current yard area of the Baseline pit to be mined. The NRCS recommends that 12" of topsoil be replaced over the mined area. The operator proposes tat 6" is to be replaced. Very little topsoil was noted on site, but the operator agreed to have soil teat taken to determine the depth of topsoil on the two properties. Issues noted above will be included in the Division's forthcoming adequacy review letter. I & S Contact Address ^ CE NAME Jeff Gregg ^ BL OPERATOR Hall Irwin Corporation ^ FS STREET 301 Centennial Drive ^ HW CITY/STATE/ZIP Milliken, Colorado 80543 ^ HMWMD (CH) ^ SE ^ WQCD (CH) cc: Carl Mount; DMG Danna Ortiz; Civil Resources, LLC