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(Page 31 <br />MINE ID # OR PROSPECTING ID # M-1980-038 <br />INSPECTION DATE 9/12/02 <br />INSPECTOR'S INITIALS WHE <br />The following problems (PBI and/or possible violations (PV) land suggested corrective actions) were identified during this <br />inspection. The problems should be corrected by the dates given, or they will become possible violations. The possible <br />violations should be corrected by the dates given to reduce their severity when considered by the Mined Land Reclamation <br />Board. The inspector noted on the previous page should be notified of all corrective actions taken. <br />PROBLEMS/POSSIBLE VIOLATIONS <br />AND <br />CORRECTIVE ACTIONS <br />1. Mine identification sign, required by Rule 3.1.12(1), was not observed. <br />CORRECTIVE ACTION: By October 31, 2002, within 30 days from the <br />signature date of this report, post a sign at the entrance of the mine site, <br />clearly visible from the access road, which displays the name of the <br />operator, the permit number, and a statement that a reclamation permit for <br />the operation has been issued by the Colorado Mined Land Reclamation <br />Board. Please send photograph of the posted sign to the DMG Durango <br />Office, 701 Camino del Rio, Room 125, Durango, CO 81301. <br />2. Pursuant to Rule 4.2.1, DMG has reviewed the current cost of reclamation <br />and has determined that the existing 55,000 financial warranty is not <br />sufficient to ensure reclamation. DMG reclamation cost estimation, dated <br />9/27/02, totaling 59,071 is enclosed. Pursuant to Rule 4.2.1(2), the <br />operator has 60 days to ensure the sufficiency of the financial warranty. <br />CORRECTIVE ACTION: By November 29, 2002, within 60 days from the <br />signature date of this report, complete one of the following two options: <br />a. Submit 54,071 additional financial warranty to the existing 55,000 <br />financial warranty to ensure a total financial warranty not less than 59,071; <br />OR <br />b. Complete sufficient reclamation to ensure the adequacy of the existing <br />55,000 financial warranty. <br />CORRECTION <br />DATE <br />October 31.2002 <br />PB or PV: PB <br />TOPICIS): SM <br />November 29. 2002 <br />PB or PV: PB <br />TOPICISI: FN <br />Attachment: Certificate of Service <br />Enclosure: DMG reclamation cost estimation, dated 9/27/02, totaling 59,071 <br />