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(Page 21 <br />MINE ID # OR PROSPECTING ID # M-1980-038 <br />INSPECTION DATE 9/12/02 <br />INSPECTOR'S INITIALS WHE <br />OBSERVATIONS <br />This inspection was conducted as part of DMG's routine monitoring plan for permitted operations. The <br />Disappointment Valley permit is located on lands administered by the BLM, in portions of the S %= of the SW <br />Y. of the NW %<, and in portions of the N '/z of the NW %< of the SW '/<, Section 20, T43N, R17W, NMPM, <br />San Miguel County. DMG records indicate that right-of-entry to the BLM lands is maintained through contract <br />COC 59065. The DMG permit is approved for 9.84 acres affected area. DMG holds 55,000 financial <br />warranty. Permit status is active. <br />Mine identification sign, required by Rule 3.1.12(1), was not observed. Rule 3.1.12(1) states that the operator <br />shall post a sign at the entrance to the mine site; clearly visible from the access road, which displays the name <br />of the operator, the permit number, and a statement that a reclamation permit for the operation has been <br />issued by the Colorado Mined Land Reclamation Board. <br />Public access to the site is controlled by locked gate across the entrance road. Gate and entrance road were <br />well maintained. Mining and reclamation activities appeared to be contained within approved areas. Affected <br />area was visually estimated at 4 acres. Pit area contained various stockpiles of mined materials. Topsoil and <br />overburden were stockpiled along the perimeter of the pit. Stockpile of processed material was located at the <br />south end of the pit area. Site appeared stable, evidence of excessive erosion and off-site sedimentation was <br />not observed, pit exhibited internal drainage. <br />Notice to Increase the Financial Warranty Pursuant to Rule 4.2.1, DMG has reviewed the current cost of <br />reclamation, totaling 59,071. Please find enclosed, 10 pages of summary, worksheets and data sheets, <br />utilized by DMG to estimate the current cost of reclamation. Therefore, the existing 55,000 financial warranty <br />appears insufficient to ensure reclamation. <br />Pursuant to Rule 4.2.1(2), the operator has 60 days from the signature date of this report, to either submit <br />54,071 additional financial warranty, to ensure a total financial warranty not less than 59,071, OR complete <br />sufficient reclamation to ensure the adequacy of the existing S5,000 financial warranty. Should the operator <br />disagree with this Notice to Increase the Financial Warranty, the Office shall schedule the matter for a hearing <br />before the Board. The permit holder may be scheduled for a Formal Board Hearing for possible revocation of <br />the permit after 60 days, if the amount of any increased Financial Warranty has not been provided. <br />Responses to this inspection report should be directed to the Division of Minerals and Geology, 701 Camino <br />del Rio, Room 125, Durango, Colorado 81301, Attn: Wally Erickson, phone no. 970-247-5469. <br />I & E Contact Address <br />NAME Ron Ebberts <br />OPERATOR Ebberts Construction <br />STREET P.O. Box 250 <br />CITY/STATE/ZIP Eonar, CO 81325 <br />cc: Tom Gillis, DMG <br />^ CE <br />X BLM, Loren Wickstrom <br />^ FS <br />^ HW <br />^ HMWMD (CH) <br />^ SE <br />^ WOCD (CHI <br />^ OTHER <br />