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July 7, 1999 <br />Kaiser Steel Resources, Inc. <br />Chimney Rock Mine <br />P.O. Box 396 <br />Pagosa Springs, CO 81147 <br />Complete oversight inspection <br />June 29, 1999 <br />Participants: <br />Harry Ranney, Colorado Division of Minerals and Geology (DMG) <br />Howazd Strand, Office of Surface Mining (OSM) <br />Henry Austin, OSM <br />I accompanied the above participants on a complete, oversight inspection of the Chimney Rock <br />Mine. This mine was selected by the Colorado Oversight Team for evaluation during 1999. The <br />primary focus of this inspection was to evaluate reclamation success. Weather conditions were <br />hot and very dry with no evidence of recent precipitation. <br />The Chimney Rock Mine has received both Phase I and II bond releases on all disturbed and <br />reclaimed areas. The current DMG permit expires on April 15, 2003. The bond is a letter of <br />credit No. C7854 from the First Business Bank of L.os Angeles, CA. The PHC was updated in <br />1995, and surface and ground water monitoring are not currently required. The permittee will <br />resume both surface and ground water monitoring 2 years prior to seeking Phase III bond release. <br />The 5 sediment ponds and the remaining roads on the reclaimed areas were reclaimed in 1997 <br />after sediment pond removal. Perennial grasses and some fortis were evident on these recently <br />reclaimed areas. The permittee has recently sprayed musk thistle on these reclaimed areas. The <br />reclaimed areas exhibited successful revegetation which varied by species and cover from area to <br />area depending on aspect, slopes, soil materials, etc. The alluvial valley Floor, which was not <br />mined, is being Flood irrigated for hay production. We walked the reclaimed areas and also <br />walked the reference area. <br />All areas inspected appeared stable with respect to erosion including terraces and protected drain <br />ways off of the terraces and/or steeper slopes. The permittee has recently repaired minor erosion <br />gullies on the slopes leading into the alluvial valley floor, and also rip rapped a drain way leading <br />into this azea to provide additional protection against erosion. Recent flood irrigation has drained <br />off north of the alluvial valley floor pasture in a small area and the permittee should redirect this <br />runoff to maximize water utilization. <br />Records reviewed on site were in order and contained all required information. Mr. Ranney will <br />check for an updated liability insurance certificate. This concluded the inspection. <br />Please direct any questions concerning [his report to Henry Austin at (303) 844-1400 x 1466. <br />