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CONNELL~SOURCES, INC. STEAMBOAT DNISION P.O. Box 882590 23690 US Hwy 40 Steamboat Springs, CO 80488 (970) 870-0200 FAX (970) 870-0290 May 15, 2001 Colorado Division of Minerals and Geology Attention: Carl Mount 1313 Sherman Street Room 215 Denver, CO 80203 Re: Tellier Pit MLRD # 98-058 Self Report of Disturbance Violation Out Of Permd Area Via Fax and Fed-Ex Dear Mr. Mount This is my follow-up letter to yesterday's voice mail regarding our companies out of permit boundary disturbance and mining in the Northwest quadrant of the pit. Following is a review of my notes, actions, measurements, and related calculations regarding this violation. Approxvnalely two weeks ago, Routt County Planner John Eastman called me and said he had been contacted by Frank Camilletti regarding whether Connell Resources' mining plan allowed for a steep dewalering trench along the fenceline and concern for the integrity of the existing fence. It is my understanding that Mr. Camilletti is a trust administrator for the trust, which has the grazing, and gravel rights to the property owned by the Colorado State Land Board. John reviewed the file and said we proposed this type of mining operation when we received permit approval. John and I discussed, and John said he would recommend to Mr. Camilletti, that rF he had any problems or concerns with our operation that we would encourage him to call me. On Friday morning May 11, 2001 Luke Tellier, the pit landowner and our lessor called me and said he had discussed our operation with Frank Camilletti, Edna Tellier, and Kent Crofts (who did the original permit work) and alerted me that Connell Resources might have encroached outside of the mining boundaries. I cnmediately grabbed my site map and our GPS system and went to the site. I quickly discovered my error. Connell Resources began mining this pit in 1999; since all approvals were not received until too late in the year in 1998 to begin pd development work in 1998.Over the first winter between approval and pit development, we lost two properly line lathes, which were slghdy inside of the existing western boundary fenceline, which has divided the properties for decades. It was my error and violation to not reset the line since the mining plan shows the property line to be 0' to 30' from the existing fence depending on the location. On Saturday May 12 Connell Resources look the adjacent stockpile of gravel and filled back in the gravel bench of mined material, which is approximately 2980 square feet of surtace area from 10' to 20' deep. The loaders wheel rolled the gravel backfill in the bench to establish compaction and slope competency. We are now very close to be able to backfill the bench and create our internal pit 3 to 1 topsoil slope, but would like your direction or inspection prior to this operation. On Monday morning I reported the violation to you on your voice mail. The landowner Luke Tellier had arranged for an inspection and meeting for me with Beverly Rave from the State Land Board. Beverly was disappointed that I had backfilled the gravel bench but gave me direction to contact Edna Tellier to determine what damages the State Land's lessee wanted for the encroachment. Ms. Rave said the Land Board did not want any compensation for the encroachment but the lessee would probably want some damages. I will report the results of this contact with Mrs. Tellier as soon as I am able to talk wdh her.