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(Page 2) MINE ID # OR PROSPECITNG ID #: rn_i 97~- INSPECTION DATE: ~F/n¢ INSPECTOR=S INITIALS: TAS OBSERVATIONS 1. A site inspection of the Durham Pit was made as a follow-up to the Division's previous inspection on January 23, 2004 when a problem was noted with the current configuration of the existing flood control dike along the south bank of the Cache La Poudre River. The January 23, 2004 inspection was made In response to a citizen complaint received from Michael and Robert Bliss on December 19, 2003 for possible flood related impacts to their property as a result of the current height of the flood control dike along the south bank of the Cache La Poudre River established at the Durham Pit. Present during the inspection was Chris Varra and Brad Janes of Varra Companies, Inc. 2. The inspection revealed that no temporary control measures have been implemented as previously requested. In its January 23, 2004 inspection report, the Division had requested that a temporary control measure be implemented on or before April 30, 2004 in order to minimize the potential for offsite damage to surrounding property owners during 2004. In its January 23, 2004 inspection report, the Division had noted on page 4 "The current configuration of the existing flood mntro/dike a/ong the south bank ofthe Cache La Poudre River is notin comp/iancr with the approved construction . specifications In particu/ar, the flood contro/dike averages 15.7'above the bed ofthe Cache La Poudre River and the dike was to be no more than 9'above the bed of the Cache La Poudre River: This configuration creates a potentia/for adverse offsite damage to surrounding property owners, and non-comp/lance with Ru/e 31.6(2).' The Division considers this matter to be a possible violation of Sections 34-32.5-116(1) and 34-32.5116 4 i ,Rule 3.1.5(3), and the Permit for failure to follow the reclamation prescribed by the reclamation plan, and therefore)failure to protect areas outside of the affected land from damage during the mining operation and reclamation, and for failure to limit the height of the constructed dike to no more than 9' above the bed of the Cache La Poudre River. Please see page 4 for Corrective Actions. A Reason to Believe a Violation Exists letter will be sent to the operator under separate cover and a hearing will be scheduled for consideration of this matter before the Colorado Mine Land Reclamation Board at the July 28-29, 2004 Meeting. 3. Because no temporary control measure had been implemented, this inspector had requested that the operator complete one of the fpllowing three (3) options within the next 30 days for resolving the problem: 1) reduce the height of the dike to no more than 9' above the bed of the Cache La Poudre River, 2) provide sufficient hydrologic and engineering information to verify that the height and configuration of the dike does not pose a threat for any offsite damage during future storm events, or 3) install temporary flood control measures in or along the dike that have been reviewed and approved by the Division that minimize the existing potential for adverse offsite impacts during future storm events. This inspector mentioned that if option 3 was chosen, the operator would need to submit a plan for review and that the details of such plan would require input from a qualified engineer. 4. At the time of inspection, the operator expressed a desire to proceed with option 3. A conceptual plan for installation of several or more inlet and outlet spillways was discussed, and the possible location of such spillways was evaluated. Photographs of these possible locations were taken and are attached to this report. Following the inspection, the operator had submitted a conceptual plan on May 14, 2004 showing the proposed location of several spillways and the anticipated Flow path for Flood waters entering onto the Durham Pit. Upon review of such plan and consultation with Tom Browning of the Colorado Water Conservation Board and Chris Pauley of Anderson Consulting Engineers (representing Varra Companies, Inc.) the Division has determined that it will not be feasible for the operator to produce an acceptable plan with properly designed spillways, and to install such structures within the next 30 days. At a minimum, such plan and designs will need to be prepared by a qualified, registered professional engineer. 5. This inspector does note; however, that the operator has retained Anderson Consulting Engineers to provide a hydraulic evaluation of the existing flood control dike and address dike related adequacy concerns noted in the Division's January 6, 2004 adequacy letter for Amendment No. 1. These concerns are coincident with the flood control concerns noted in the Division's January 23, 2004 inspection report. This inspector's understanding is that it Is feasible for the operator (via Anderson Consulting Engineers) to provide a hydrologic evaluation within the next 30 days of the potential for adverse offsite impacts and the magnitude of storm event(s) that might be required to cause an adverse offsite impact due to the current configuration of the flood control dike.