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(Page 2) <br />MINE ID # OR PROSPECTING ID #M-1978-279 <br />INSPECTION DATE 3/15/02 <br />INSPECTOR'S INITIALS GRM <br />This inspection was conducted as part of the normal monitoring program of the Colorado Division of Minerals and Geology. <br />The Goldman Pit is located approximately 5 miles southeast of Silt, Colorado just off County Road 335. The weather was clear <br />and the site had minimal snow cover in shaded areas. The inspector was accompanied on site by Flag Resources <br />representative, Fred Frei, <br />The mine identification sign and affected area boundary markers are in place and in compliance with Rule 3.1.12. The sign <br />had been blown over and not visible, but was found. Although not listed as a problem in this report it is recommended that a <br />more permanent way to support the sign be employed. <br />It appears that fill material has been imported to the site for use as structural fill or visual berm. DMG records do not indicate <br />that the notice specified in Rule 3.1.5 (9) has been submitted for this backfill importation and placement. Please submit this <br />notice by the correction date specified in the Problems section of this report. The material appears to be overburden /topsoil <br />the operator stated was obtained from the county and being used as a visual berm. <br />The original mine plan calls for trenches and terraces to be used in the mining operation to reduce highwall height and maintain <br />stability. No documentation within the permit file is found to deviate from this plan. In it's current state it appears as if there <br />is not enough materials left to obtain the required 3:1 slopes and the mining methods do not conform to the permit. The current <br />highwall appears to be close to 50 feet in height and 400 feet in length in the west portion and around 20 feet high and 400 <br />feet in length along the southern portion. The lack of materials and mining method may have a significant impact on the <br />financial warranty now in place. <br />No significant infestations of noxious or other problematic weeds were noted on site during this inspection. Although to early <br />for new growth, no visible signs of noxious or problematic weeds was observed. <br />No significant erosional features were noted on the affected areas of the site. All storm water appears to be being contained <br />on site. <br />Responses to this inspection report should be directed to Russ Means at the Division of Minerals and Geology, Grand Junction <br />Field Office, 101 South 3ro Street, Room 301, Grand Junction, Colorado 81501, phone no. 970-241-1117. <br />I & E Contact Address <br />NAME Fred Frei <br />OPERATOR Flag Resources, Inc. <br />STREET 1412 CR 311 <br />CITY/STATE/ZIP New Castle. CO 81641 <br />cc: <br />^ CE <br />^ BL <br />^ FS <br />^ HW <br />^ HMWMD (CH) <br />^ SE <br />^ WOCD (CH) <br />^ OTHER <br />