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(Page 2} MINE ID # OR PROSPECTING ID # M-1977-208 INSPECTION DATE 2/03/05 INSPECTOR'S INITIALS ESC OSS&RVATION3 This was an inspection of the Lyons Quarry conducted by Erica Crosby of the Division of Minerals and Geology, Eric Hodek of CEMEX, Inc., Maureen Jacoby of Banks & Gesso, Raymond Petros, Jr. of Petros & White and Judson Hite the attorney representing the Caribou Springs Ranch were present during the inspection. The purpose of the inspection was to inspect the area associated with the acreage release request (AR-O1) submitted by CEMEX, Inc. on January 6, 2005. The permitted property south of Hygiene Road contains Pits E and F and Waste Area #2. In 1985, the area south of Hygiene road was sold to James Guercio and converted to the Caribou Springs Ranch Subdivision. The 1977 Mining and Reclamation Permit contains 1,422.54 acres. The southern portions of the E and F Pits and the Waste Area #2, totaling 288 acres, were released in 1991. CEMEX is requesting that the remainder of E and F pits be released from the permit, which total 155 acres. In 1980, the Division approved a Technical Revision to the Lyons Quarry that revised the reclamation plan for the E and F Pits. The revision addresses shale waste to initially be disposed in the A and B pits. When mining in the E-Pit has progressed far enough, the waste shale and overburden from pits A, C and D were deposited into the final mined out area of the E-Pit. In addition, the E-Pit lake was to be eliminated, putting the entire region back to pastureland. According to the 1997-1998 Annual Reclamation Report, final portions of the E-Pit were reclaimed using the dryland seed mixture approved in the original permit application of 1977. On December 23, 2004 the Division approved a technical revision (TR-03) to the permit. A portion of the revision addressed the current reclamation status of the E and F pits. According to the revision, the F-Pit was never disturbed by mining related activity. The F-Pit area has been subdivided into to residential lots. The reclamation plan was revised to reflect this change, including a paved access road and one residence on the Lind property. According to the annual reclamation reports, the E-Pit was reclaimed in 1997-1998. The pit was backfilled with shale and overburden and topsoil was replaced. The backfilled pit slopes from west to east and contains slopes less than 3h:ly. The reclaimed slopes appear stable, and no significant erosion features were noted. Snow was present on site, but vegetation cover and species could be observed. Grass species note on site are representative of the 1977 approved dryland seed mixture. The grass species noted include sideoats grams, crested wheatgrass, intermediate wheatgrass and tall wheatgrass. Cover over the site was good, and weeds were not observed. Drainage for a portion of the site concentrates in the middle of the pit and is released through a culvert under the paved access road. Rip-rap material has been placed at the inlet of the culvert. A natural drainage pattern has formed above the rip-rap, and is approximately 12" to 18" in depth. The area is stable, and vegetation is encroaching the area, The F-Pit area was not disturbed by mining related activity, so the area was assessed from the access road. No mining related features were noted. Based on the reclamation noted in the E-Pit and the fact that the F-Pit was not disturbed by mining, the Division will approve the acreage reduction request in the amount of 155- acres. With the entire property released south of Hygiene road (including the 288-acre release in 1991), the new permit area for the Lyons Quarry will be 979.54 acres. The current reclamation bond in the amount of $8,076,100.00 will not change as a result of this release request. Approval of the release will be sent under separate cover.