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(Page 2) MINE ID # OR PROSPECTING ID #: M-1984-069 INSPECTION DATE: 9-13-07 INSPECTOR'S INITIALS GRM This inspection was conducted as part ofthe normal procedure established by the Colorado Division ofReclamation, Mining and Safety for permitted sites where citizen complaints have been received. On August 3, 2007 the Division was forwarded a complaint from the Executive Director's Office regazding a number of alleged activities at the Schmalz Pit, Permit No. M-1984-069. The complaint was registered by Mr. John Whitley and was addressed to Governor Ritter and State Attorney General John Suthers amongst others. Specific alleged activities are the dumping of sewage waste on site and the importation of materials that contain radioactive waste. Backeround• The Schmalz Pit has been a permitted 110c sand and gravel operation since 1984. 9.8 acres are permitted on private land located northwest of the town of Gunnison of which approximately 6 acres is disturbed. The Division holds a reclamation bond of $21,654.00 which was last updated in October of 2006. A review of inspection reports notes only minor issues which were addressed promptly by the operator. The permit file indicates a phone call was received by the Division in July of 2001 from an Yvette Maer concerning asphalt and possible sewage disposal on site. There aze no details as to the extent or exact location of the alleged activities. No other correspondence written or otherwise is noted concerning this issue until the 2007 written complaint. An inspection by the Division in September of 2000 notes no problems or issues with the site. In 2003 the current inspector visited the site and required the operator to submit a new map and mazk the permit boundaries. This cleared up a question of deposition of topsoil outside the permit boundaries and importation of fill. The topsoil was within the boundaries and the imported materials of wood and overburden like material were outside the permit and not related to the mining operation. In October of 2006 the inspector noted no issues that needed to be addressed. The Division was contacted by the Colorado Department of Public Health and Environment in June of 2007 by Mr. Philip Egidi of the Radiation Control Division. Mr. Egidi noted to the inspector the reception of the same letter that was forwarded to the Division. Mr. Egidi was investigating the possible dumping of mill tailings in the Schmalz Pit and asked questions regarding past inspections and the standing of the permit. Mr. Egidi forwarded a copy of his findings to the inspector which is attached to this report. A subsequent discussion with Mr. Egidi notes that he forwarded Mr. Whitley the contact for the Solid Waste Division for any further investigations regarding the site. Prior to the current inspection, the inspector received a call from Mr. Whitley regarding a water sample taken from the neazby creek. The inspector noted Mr. Whitley's initial attitude was very demanding and intense. The inspector gave Mr. Whitley the choice of slowing down or ending the conversation. Mr. Whitley opted to back offand discuss his issues. Mr. Whitley stated a sample of water and sludge was taken from the creek which indicated high contaminates associated with raw sewage which implicated the Schmalz Pit. Mr. Whitley noted the sample was taken near or at the creek and being held by someone from Gunnison Water Treatment. It was explained what the Division's jurisdictions were and that the water sample was a matter for CDPHE Solid Waste for which Mr. Whitley already had a contact. The inspector noted to Mr. Whitley that the Division would inspect the site and forward its findings to him as soon as possible.