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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-1989-023 <br />INSPECTION DATE 08/24/2006 <br />INSPECTOR'S INITIALS DEG <br />This inspection of Permit Number M-1989-023 was conducted by Deb E. G6nima of the DMG. Clyde Couch (Permittee) and <br />Ben W inemiller (Operator) were present during the inspection. The site is located approximately 1 mile northwest of Proctor on <br />County Road 65. <br />Using a GPS unit, this inspector proceeded to calculate the current acreage of the permitted Caliche School Pit to ensure that <br />the permit boundaries were staked properly. The acreage was determined to be 1.87 acres at that time, and the approved <br />acreage for the site is 2.5 acres. The operator and permittee have met the requirements of the previously stated corrective <br />action by correctly marking the permit boundaries, and this inspector has photographic evidence of this. Therefore, Problem <br />No. 1 listed in the previous inspection report has been resolved. However, the operator still remains responsible for removing <br />the rusted metal debris on the mine site noted in the previous inspection report and submitting photos of this resolution to the <br />Division on or before September 7, 2006. Therefore, Problem No. 2 from the previous inspection report remains unresolved at <br />this time. <br />This inspector then worked with the Permittee and Operator to stake the perimeter of the offsite disturbed area. Once this area <br />was staked, this inspector calculated the acreage of only the non-permitted area to determine that 1.9 acres of the surrounding <br />area had been disturbed as a result of mining related activities. This additional disturbance is located solely to the south of the <br />current approved area, and is shaped like asemi-circle south of the haul road. Discussions with the Operator and Permittee <br />revealed that the desire for the area is to mine more deeply in the direction of the current permitted area, rather than extend <br />mining to the south or continue mining within the currently illegal mining operation. Therefore, the stakes were placed at the <br />southern extent of the disturbance with only enough of a buffer to allow the Operator to re-grade the southern portion of the <br />disturbance back to 3h:1v slopes, since mining is not anticipated to continue in this area. The Operator also stated that he <br />plans to obtain manure from a local resource and incorporate it into the topsail for the site once reclamation begins. <br />Additional topsoil stockpiles on site were noted, and will supply a sufficient amount for the entire disturbed area. At this time, no <br />material processing takes place on site, and there was no residual material stockpile. At the time of this inspection there <br />appeared to be no offsite erosion, and no long-term (greater than 72 hours) water retention was observed. The mine entrance <br />sign along with all permit boundary markers for both the permitted and non-permitted areas were in place by the time this <br />inspection was concluded. <br />This additional disturbance outside of the current permit boundaries constitutes a possible violation and a Reason to Believe <br />letter will follow this inspection report under separate cover. This letter will include instructions and a timeline for the impending <br />Mined Land Reclamation Board hearing. The need to appear before the Board was discussed during this inspection and this <br />inspector was reminded that the Permittee (Mr. Couch) leaves for Arizona for the winter on or around September 7i1' of each <br />year. Therefore, Mr. Couch requested that Mr. W inemiller be his representative at this meeting. In order for Mr. W inemiller to <br />represent Mr. Couch at the October Board Hearing, Mr. Couch and Mr. Winemiller need to submit a signed, notarized letter to <br />the Division stating this agreement prior to the hearing. In addition, it is also possible to conference call Mr. Couch for this <br />hearing. <br />As a result of these significant changes to the approved mining and reclamation plan on file with the Division, the Permittee and <br />Operator has decided to submit a full and complete Amendment to this permit, and bring all current disturbance under one <br />permit. Please refer to the enclosed DRMS Rules for all the steps, exhibits, and submittals involved. This inspector has <br />committed to supplying the Permittee and Operator with the current mapped permit boundaries from the use of the GPS unit <br />during this inspection. This package also includes (along with the Division Rules) a sample amendment application, and the <br />current Caliche School Pit permit information for your use. In order to consider the amendment package, it must be determined <br />to be complete by the Division and should be submitted along with the fee of $719. For additional information about the filing or <br />bond process, please contact Elizabeth Shelton at 303-866-4084.Once this application has satisfied the requirements of the <br />Division, a bond amount will be calculated and both Mr. Couch and Mr. Winemiller will be notified. <br />Mr. Couch inquired about filing his annual report for this site, and payment of his annual fee. His new addresses have been <br />updated in our permit system and Mr. Couch shall be receiving a notice to file his annual report and pay his annual fee shortly. <br />As a reminder, annual reports always require a map, regardless of whether any disturbance has occurred. <br />Responses to this inspection report should be directed to Deb E. Gbnima at the Division of Reclamation, Mining and Safety, <br />Denver Office, 1313 Sherman Street, Room 215, Denver, Colorado 80203, phone number 303-866-4179. <br />