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(Page 2) MINE ID # OR PROSPECTING ID # M-1998-105 INSPECTION DATE 12-8-2004 OBSERVATIONS INSPECTOR'S INITIALS SSS This was a routine inspection conducted as part of the Division of Minerals and Geology's on-going monitoring program for permitted mine sites in Colorado. The mine identification sign and affected area boundary markers are in place and in compliance with Rule 3.1.12. No significant infestations of noxious or other problematic weeds were noted on the affected areas of the site, primarily because these areas were only recently disturbed by initiation of mining this year. Mining was initiated this year, excavating approximately 1.5 acres of the northwest corner of Phase I. Processing operations have since been completed, with processing equipment removed from site. The permittee was loading trucks from ample product stockpiles created this summer. The pit slopes were under water, but the north and west slopes were reportedly sloped to final grade. The haul road has been constructed in a location other than that shown on the permit maps. Anon-permanent scale has been installed in the west end of the processing area with a topsoil stockpile located across the haul road to the northeast of the scales. These features, or their locations, are not accurately portrayed on the permit maps. The permittee will need to submit a revision to the permit to update the maps accordingly. See the corrective action and due date noted on the last page of this report. Due to the presence of tamarisk in and adjacent to the permit area, DMG highly recommends that reclamation be accomplished as soon as possible on mined out areas that can be isolated from future disturbance without hindering operations. Planting of native cottonwoods and willows, in a fairly high density, along the zone of moisture influence from the pit lake should help minimize tamarisk establishment in this zone. Measures should also be taken to ensure positive drainage from all disturbed areas to minimize areas of moist soil during the times when tamarisk are seeding. This site is permitted to operate a wash plant with a settling pond. These features are very conducive to tamarisk establishment. Proper operation of these facilities, to maintain either a dry surface, or a flooded area, can help minimize tamarisk establishment. DMG would be happy to provide additional information about operational measures that can be implemented in an attempt to prevent a tamarisk infestation in the permit affected area. With tamarisk now being listed as a noxious weed, a weed control plan for this site, that includes tamarisk controls, will need to be included in the permit. This plan can be included in the revision required as noted above. The stockpiled topsoil from the initial mining will need to be shaped to moderate slopes (3H:1 V recommended) and seeded if that material is not to be replaced on reclamation areas this spring. In an effort to ensure the financial warranty remains adequate to reclaim this site per the requirements of the approved reclamation plan, DMG has updated the reclamation cost estimate (copy enclosed). These calculations indicate the site is currently under-bonded. Therefore, pursuant to Section 34-32.5.117(4) of the Colorado Land Reclamation Act, adequate financial warranty must be submitted to DMG within 60 days of the mailing date of this report. Please review the enclosed figures as soon as possible and contact our office if any calculation errors are noted. Responses to this inspection report should be directed to Steve Shuey at the Division of Minerals and Geology, Grand Junction Field Office, 101 South 3rtl Street, Room 301, Grand Junction, Colorado 81501, phone number 970-243-6368. I & E ContactAddress NAME OPERATOR STREET CITY/STATE/ZIP Edward Settle Grand Junction Pioe and Suoolv Comoanv P. O. Box 1849 Grand Junction, Colorado 81502 cc: ^ CE ^ BL ^ FS ^ HW ^ HMWMD (CH) ^ SE ^ WOCD (CH) ^ OTHER