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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-1978-314 <br />INSPECTION DATE 05/02/07 INSPECTOR'S INITIALS ESC <br />OSSRRVATIONS <br />This was a surety reduction inspection of the King Mountain Sand and Gravel site conducted by <br />Erica Crosby of the Colorado Division of Reclamation, Mining and Safety. Mike Jones of King <br />Mountain Gravel, LLC. was present during the inspection. <br />King Mountain submitted a surety reduction request on October 3, 2006 to reduce the <br />reclamation bond to account for removal of old trucks, miscellaneous equipment parts, steel <br />barrels and other junk that had been accumulated over the years by the previous property <br />owners. Approximately $119,000.00 of the $351,000.00 financial warranty was allocated for <br />removing this material and disposing it off-site. Due to the early on-set of winter, the <br />Division had to delay the inspection until the following spring. <br />A site inspection verified that most of the material has been removed from the site. One <br />scraper and small portable foundations remain. According to Mike Jones, the area was <br />reseeded after the material was removed from the site. Based on the site inspection, the <br />Division will approve the surety reduction request. The bond will be reduced from <br />$351,000.00 to $223,300.00 (for a total of $127,700 to be released). Notice of approval of <br />the surety reduction request will be submitted to the operator under separate cover, after <br />the 30-day comment period has expired. <br />The active pit area was inspected. No mining was taking place during the inspection. The <br />operator is mining in the original 110 permit area. The 112 Conversion Application was <br />approved by the Division, however, has yet to be approved by Routt County. The pit is <br />approximately 40 feet deep. Mike Jones stated that the depth of the pit will go another 20 <br />feet but will stay above the seasonal high ground water elevation. The pit was currently <br />dry. Mining will eventually move towards the north. <br />I & 8 Contact Address <br /> ^ CE <br />NAME Mr. Kirk J. Eberl ^ BL <br />OPERATOR King Mountain Gravel, LLC ^ FS <br />STREET 7276 W. Mansfield Ave. ^ HW <br />CITY/STATE/ZZP Lakewood, CO 80235 ^ HMWMD (CH) <br /> ^ SE <br /> ^ WQCD (CH) <br />Cc: Carl Mount; DRMS <br />Paul Gesso; Banks & Gesso <br />Mike Jones; King Mountain Gravel, LLC. <br />