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(Page 2) MINE ID # OR PROSPECTING ID #: M-1995-057 INSPECTION DATE: 9-7-06 OBSERVATIONS fNSPECTOR'S INITIALS GRM This inspection was conducted as part of the normal monitoring program established by the Colorado Division of Reclamation, Mining and Safety for permitted sites. The Rudibaugh Pit was scheduled for a regular inspection next spring however, due to a pending Board Hearing for Failure to pay Annual Fees the inspection became a High Priority. Attempts to contact the operator have been unsuccessful as the contact phone number is no longer in service. The inspector attempted personal contact at the Rudibaugh residence but was also unsuccessful there. The mine identification sign and affected area boundary markers are in place and in compliance with Rule 3. I.12. The sign is located at the entrance to the mine. Boundaries are marked t-posts and fence lines. An issue over whether an area between the permit boundaries and the road right-of--way apparently has been resolved. The existing fence line appears to have been adjusted to ensure any disturbance is within the permit area. A review of the approved Site maps is inconclusive and very close. Therefore, the inspector feels the issue has been resolved. The reason for the inspection being made a high priority is the Lack of payment of the annual fees. Attempts to contact the operator by phone and mail were unsuccessful because the contact information is no longer valid. The lack of~roper contact information is being listed as a problem with corrective actions at the end of this report. The site is active with equipment on site. A screener and loader were noted on site with several stockpiles of processed materials. The site has 2 primary areas of excavation, one near the west side and one over by the southeast corner of the permit. The excavations are approximately 10 feet in depth and have highwall wall length totals of around 200 feet. The inspector noted several vehicles on site. While 2 appear to be mechanically sound, there are 2 that must be removed from the permit area. A rolled Jeep and a vintage thick are creating an unsightly mess. It is incumbent upon the operator to keep the permit area free of debris and in an orderly manner. Junk cars within the permit area are considered deleterious to the site. Thi s is the second incident where items of concern have been placed within the permit boundaries. The first was a burnt out mobile home that had to be removed. The placement of iunk vehicles within the permit area is listed as aproblem with corrective actions at the end of this resort. The old truck noted above is being used as a dumpster. The inspector noted large amounts of herbicide and other chemical containers in the back of the vehicle and on the ground. Petroleum containers where also observed on the ground with soil staining. The improper storage of hazardous materials is noted as a problem with corrective actions at the end of this report. 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}. Clearly, 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.