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III. COMMENTS - COMPLIANCE <br />Below are comments on the inspection. The comments include discussion of observations <br />made during the inspection. Comments also describe any enforcement actions taken during <br />the inspection and the facts or evidence supporting the enforcement action. <br />This was a complete inspection conducted by Kent Gorham of the Colorado Division <br />of Minerals and Geology. Weather on this day was cool and overcast. Ron Thompson <br />of Peak Project Management represented Lorencito Coal Company during the <br />inspection. <br />Availability of Records <br />The mine records are kept at the Tri-State railyard office located along Highway <br />12 on the west side of Trinidad. All required records were found in compliance as <br />detailed on page 2a of this report. <br />Signs and Markers <br />The mine identification sign is showing signs of damage due to collision by <br />various large vehicles. Mr. Thompson and I discussed updating this information in <br />the next few weeks as soon as a decision is reached on whether mining will <br />proceed. <br />Hydrologic Balance <br />Flow was noted in Lorencito Canyon along the lower one mile near the confluence <br />with the Purgatoire River. Flow was milky, likely due to snow melt and runoff <br />from recent precipitation events. <br />General Mine Plan Compliance <br />The mine has yet to commence operations at this time. Rule 2.01.5(2)(a) requires <br />that a permit be terminated if the permittee has not commenced the surface and <br />coal mining reclamation operations covered by the permit within three years of the <br />date of the issuance of the permit. The permit issuance date is November 7, 1997. <br />The permittee has requested a six-month extension due to pending interest from a <br />third party. The Division is currently evaluating this request. The Division has <br />received a replacement bond but has yet to receive right-of-entry information and <br />railroad agreements. The Division anticipates this remaining information in the <br />very near future. <br />There is no change in the status of the operation at this time. Exploration work <br />continues under Notice of Intent CX-96-218-00 as approved. Even though the mine <br />status is listed as active, coal mining operations have not commenced at this <br />time. No coal mining activity was noted under this permit. <br />3 <br />