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III. COMMENTS - COMPLIANCE <br />Below are comments on the inspection. The comments include discussion of observations <br />made during the inspection. Comments also describe any enforcement actions taken during <br />the inspection and the facts or evidence supporting the enforcement action. <br />This was a partial inspection conducted by Kent Gorham of the Colorado Division of <br />Minerals and Geology. Ron Thompson of Peak Project Management represented Basin <br />Resources Inc during the inspection. Ground conditions were dry and the weather <br />was hot. This former underground mine site is reclaimed. <br />Availability of Records <br />A copy of the liability insurance certificate was reviewed at the Tri-State <br />Railyard office. The amount of insurance coverage was S1 million and coverage <br />expires July 1, 2002. This information meets the requirements of Rule 2.03.9. <br />Signs and Markers <br />Signs in Wet Canyon will be removed prior to the July inspection. <br />Revegetation <br />Dry conditions prevail at this site. Smooth brome grass is actively flowering as <br />evidenced by tiny yellow flowers littering the ground around the plants. Vetch <br />plants are setting seed heads. The reclaimed portal area mentioned in last month's <br />report is showing growth of annual weeds and seeded grasses. This area will <br />continue to be observed over the coming months for any sign of die-out or necrotic <br />effects of possible methane contamination of the soil. Scotch thistle plants were <br />noted sporadically around the site and were mechanically removed as encountered. <br />These and other weeds on the site should be controlled as necessary using <br />herbicide or mechanical methods. No evidence of trespass grazing was observed. <br />The reclaimed areas of pond 3 and pond 4 are progressing well. Both areas should <br />be sprayed for weeds in the very near future. Mowing the pond 3 area, which was <br />reclaimed as pastureland, may be beneficial. Overall vegetative cover is good at <br />both locations. <br />The reclaimed area of the NW-1 fan site was traversed on foot. Vegetation is <br />sparse at this site and consists of numerous annual weeds and a few grasses. <br />Interseeding of this area is advised. <br />Soil Methane Monitoring <br />The area of methane contamination in the soil east of the mine permit area was <br />observed. Smooth brome and annual weeds (pigweed?) were noted on the two <br />reclaimed gas well pads. Patchy bare areas exist on both of these reclaimed areas <br />3 <br />