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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-1986-165 <br />INSPECTION DATE 12/21/05 INSPECTOR'S INITIALS WHE <br />OBSERVATIONS <br />This inspection occurred as part of DMG's routine monitoring program of permitted operations. The <br />Willow Bend Pit is approved for 6 acres affected land for the extraction of a sand bar from the Animas <br />River. DMG holds $4,278 financial warranty. Permit status is active. One photo accompanies this <br />report. <br />No activities occurred during the time of this inspection. Mining and reclamation activities appeared to be <br />occurring in accordance with permit conditions and the Act and Rules. Given the minimal requirements <br />of the reclamation plan, grading and revegetation for 2-acre area, the existing $4,278 financial warranty <br />appears sufficient to ensure reclamation. <br />No problems or possible violations were observed. <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 />I & E Contact Address <br />NAME Dave billion <br />OPERATOR Sandco, Inc. <br />STREET P.O. Box 4440 <br />CITY/STATE/ZIP Durango, CO 81302 <br />cc: Bruce Humphries, DMG <br />^ CE <br />^ BL <br />^ FS <br />^ HW <br />^ HMWMD (CH) <br />^ SE <br />^ WOCD (CH) <br />p OTHER <br />