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(Page 4) MINE ID # OR PROSPECTING ID # M-1991-146 INSPECTION DATE 6!13/03 INSPECTOR'S INITIALS WHE seasonal deposition of excess bedload and by the constriction of the channe{ created by the flood protection dikes. The river is sensitive to disturbances and may have been destabilized prior to permitted mining activities. The available evidence does not prove that the recent erosion of the channel and flood protection dike and/or erosion to lands owned by Mr. Patterson have resulted from mining and reclamation activities conducted by ZMK. The Construction Materials Act and Rules require an operator to conduct mining and reclamation activities in a manner which minimizes disturbances to the prevailing hydrologic balance (Rule 3.1.6(1)) and in a manner which controls erosiori of the affected lands to protect areas outside the affected land from damage (Rule 3.1.5(3)). Observations made by DMG and recorded within this report indicate that mining and reclamation activities conducted by ZMK are compliant with permit conditions and the Act and Rules. No problems or possible violations were observed. Stability of the river through this reach of highly modified channel may be enhanced by continuous removal of the excess bedload through appropriate{y conducted and permitted mining and reclamation activities. Administrative Appeal Pursuant to Rule 1.4.11, any person who can demonstrate that helshelit is directly and adversely affected or aggrieved by DMG's decision, and whose interests are entitled to legal protection under the Act may petition for a hearing before the Colorado Mined Land Reclamation Board. Such petition for a hearing must be received by DMG within 30 days from the signature date of this report and must state how the petitioner is directly and adversely affected or aggrieved by DMG's decision, and how the petitioners interest are entitled to protection under the Act. The petitioners shall list and explain any issue the petitioner believes should be considered by the Board at the hearing. The petition for a hearing shall specify the application or file number for the operation. The file number for the ZMK Gravel Pit is M-1991-146. Responses to this inspection report should be directed to the Division of Minerals and Geology, 701 Camino del Rio, Room 125, Durango, Colorado 81301, Attn: Wally Erickson, phone no. 970-247- 5469. Enclosures: Complaints from Mr. Patterson; DMG report generated from the April 30, 2003 inspection; and 8 photos of the Uncompahgre River where ZMK lands are located (photos taken on June 25, 2003). I & E Contact Address NAME OPERATOR STREET CITY/STATE/ZIP Richard Zannett ZMK Construction. Inc. P.O. Box 1817 Ouray CO 81427 cc: Harry Posey, DMG X COE, Sue Nall G BL G FS G HW G HMWMD (CH) G SE G WOCD (CH) X R. Larson, Monadnock Mineral Services X James O'Callaghan Patterson