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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-2006-009 <br />INSPECTION DATE_12/18/06 INSPECTOR'S INITIALS WHE <br />OBSERVATIONS <br />This inspection occurred as part of DMG's review process for a technical revision (TR-01), addressing a <br />modification to the configuration of the permit boundary. Five photos accompany this report. Mining <br />activities were active during the inspection. <br />Under TR-01, the Operator proposed an exchange of 5.6 acres of permitted land for 5.6 acres of land <br />adjacent to the permit area but not previously included within the permit boundary. The 5.6 acres area to <br />be release from the permit area had been disturbed bypre-permit and historic mining activity. The 5.6 <br />acres area to be incorporated into the permit area had also been disturbed by pre-permit activity. The <br />Division determined that TR-01 actually included two permitting actions; a release request per Rule 4.17, <br />and an addition to the permit area (amendment) per Rules 1.1(6) and 1.10. Therefore, the Division found <br />the submittal forTR-01 incomplete forthe purposes of filing. Pursuantto a Division Policy, adopted May <br />31, 1996, the Division offered a modified revision process with conditions. Copy ofthe Division's May 31, <br />1996 Policy is enclosed. The Operator has appealed the Division's interpretation of the land exchange <br />constituting an Amendment, as defined by Rule 1.1(6). The Division has scheduled the issue for <br />consideration during the March 14-15, 2007 Board meeting. <br />As shown in the photos, approximately 2 acres of the 5.6 acre area proposed to be added to the permit <br />under TR-01 is currently being utilized by the Operator as a stockpile area. Pursuant to Rule 1.1(3), <br />6.4.3(d) and 6.4.5(2), such activities constitute "affected land" and are required to be contained within the <br />permit and addressed by the reclamation plan and bond. The Division believes that by affecting lands <br />beyond the permit area the Operator has violated Rule 3.1.5(3) and Section 34-32.5-116(4)(1) CRS of the <br />Act, which states that areas outside of the affected land shall be protected from damage occurring during <br />the mining operation and reclamation. The Division has scheduled the issue for consideration during the <br />March 14-15, 2007 Board meeting. Additional details for the possible violation are listed on page 3 of <br />this report. <br />The Hindmarsh Sandstone operation is approved fora 31.74-acre sandstone extraction with on-site <br />processing. Explosives will be utilized but not stored on site. The Operator, Mesa Sandstone, is the <br />surface and subsurface owner. Reclamation will support rangeland post-mining land use. The Division <br />holds $20,000 financial warranty. <br />Responses to this inspection report should be directed to the Division of Minerals and Geology, 701 <br />Camino del Rio, Room 125, Durango, Colorado 81301, Attn: Wally Erickson, phone no. 970-247-5469. <br />Enclosure: <br />I & E Contact Address <br />NAME <br />OPERATOR <br />STREET <br />CITY/STATE/ZIP <br />Certificate of Service <br />cc: Tony Waldron, DMG <br />^ CE <br />William K. Goode <br />Mesa Sandstone <br />P.O. Box 220 <br />Cortez CO 81321 <br />^ BL <br />^ FS <br />^ HW <br />^ HMWMD (CH) <br />^ SE <br />^ WOCD (CH) <br />X Doug Conger <br />