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(Page 2) MINE ID # OR PROSPECTING ID #: Mien-S~a INSPECTION DATE: n4/t4rn4 INSPECTOR=S INITIALS: TAS 1. A site inspection of the Empire Pit was made in response to the operator self-reporting a possible violation of the Colorado Mine Land Reclamation Act for Construction Materials & their permit. Vince Auriemma of the City of Golden & Maureen ]acoby of Banks & Gesso, and Stu Nieland of Kiewitt Western had met with the Division on April 8, 2004 to discuss the situation. Present during the inspection was Mr. Vince Auriemma of the City of Golden Dept, of Public Works. 2. On March 31, 2004 the Division of Minerals & Geology received an Annual Report & Progress Map from Banks & Gesso on behalf of the operator indicating that approximately 1.0 acre of product stockpiles have been located outside the permit area. This observation was made upon review of the Annual Report map generated from a current aerial photograph of the Empire Pit. 3. According to the recent Annual Report & as verified during the inspection, mining at the site was completed in 2003. Guanella Dam & Reservoir was approved for construction by the State Engineer's Office on May 20, 2003, and construction was approved and permission to fill the reservoir was granted by the SEO on March 29, 2004. The slopes around the reservoir have been graded to final reclamation contours, and will be re-vegetated this spring via seeding and mulching. Mined material is stockpiled within the east side of the permit area, and will continue to be processed on site for approximately 3-5 years depending on market conditions. The product stockpile area comprises approximately 8 acres and is located at the eastern end of the permit area. The site inspection confirmed these observations. Also, water was being routed into the reservoir at the time of inspection. Mr. Auriemma indicated that the reservoir will have a maximum depth of 40' and a storage capacity of approximately 2000 acre-feet. 4. The following observations were made during the inspection and evaluation of possible violation activity: : 0.96 acres of additional disturbance has been created by spillage or overflow of stockpiled product material in the southeast corner of the permit area (attached is a map showing the location of the various stockpiles located outside the permit area. the spillage was unintentional as the permit boundary was marked and the product stockpile was being added to from the center of the stockpile, which is well within the permit boundary the overflow averaged 25' outside the permit boundary in several locations and the height of the overflow averaged 15' the City of Golden is the landowner of the 0.96 acres where spillage occurred the City of Golden has already applied a fiber mulch & grass seed mix to the stockpile to help stabilize the pile from wind and water erosion Mr. Auriemma indicated that the stockpiled material will be screened and then removed off-site; Kiewitt Western is the subcontractor who is processing the stockpiled material the product stockpile is huge with only 1/8 of the pile located outside the permit boundary : digital photographs of the stockpile and spillage area(s) were taken and are attached to this report spillage occurred on area(s) that were previously a Flat sand gravel surface with no pre-existing vegetation there was no evidence of environmental harm noted the permit boundary has been well marked, spillage occurred by equipment operator who didn't notice markers because stockpiled material was piled very high in the center of the pile, resulting in spillage or overflow at the bottom 5. The product stockpiles are considered to be part of the mining operation. Therefore, the Division considers this matter to be a possible violation of Rule 3.1.5(3) and Section 34-32.4-116(4)(1) of the Colorado Land Reclamation Act for the Extraction of Construction Materials for failure to protect areas outside of the affected land from slides or damage during the mining operation and reclamation. As discussed on Apri18, 2004 the operator will complete one of the following corrective actions: A} Submit an application for a permit amendment to increase the permitted acreage by at least 0.96 acres and include the stockpile disturbance currently outside the permit boundary (such amendment application must include a demonstration of legal right to enter the 0.96 acre area of additional disturbance), or B) Remove the excess stockpiled material from the 0.96 acres outside the current permit area, reclaim the 0.96 acre disturbance according to the terms of the approved reclamation plan, and submit an application for a permit amendment to add at least 0.96 acres of additional disturbance and permit area (such amendment application must include a demonstration of legal right to enter the 0.96 acre area of additional disturbance).