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Marr Mine and Loadout March 23, 2007 <br />2006 Reclamation Report <br />maintenance and repair of drainages and terraces in 1999 and the 4 areas of rilling and gullying <br />required minor repair, Gean-out, and inter-seeding during 2003. There were no repairs or <br />maintenance activities completed in 2004. Repair or maintenance activities associated with the <br />drainage and sediment control structures in 2005 included new rock dams and contour furrow <br />work. During 2006, the entrance road was bladed from the shop area to the main entrance gate <br />and the road ditch was maintained where needed. Additional contour furrows were installed on <br />the east facing slope directly west of the sop facilities to control rill forming and run off on the <br />slope. The new furrows were hand inter-seeded with the approved permanent seed mix. <br />Pond inspections were completed for the first 3 quarters of the year. An inspection certified by a <br />Professional Engineer registered in Colorado was completed in November, 2006. Based on <br />inspections, the surface water control structures were generally in good condition. In 2004, the <br />BLM was agreeable to retain either of the ponds F or G as permanent structures to support the <br />proposed post-mining land uses. Kerr has submitted a Permanent Pond demonstration for <br />Pond F. <br />8.0 TOPSOIL STOCKPILES <br />There were approximately 3.0 acres of topsoil stockpiles remaining at the Mine Area. The <br />topsoil piles for Ponds C and G were used to reclaim those ponds in 2006 (2.74 acres). The <br />estimated remaining topsoil stockpiled at the mine is 0.26 acres. Pond F is pending permanent <br />status. <br />9.0 SURFACE FACILITIES <br />As shown on the 2006 Mine Area Reclamation map, the remaining long term or permanent <br />facilities (roads, buildings and ponds) in the Mine Area cover approximately 41 acres, including <br />those pending final approval. Permanent facilities in the Loadout Area cover approximately 5 <br />acres for a total of 46 acres. <br />During 2002, Kerr coordinated with the DRMS, BLM, and OSMRE to identify, plug, seal, and <br />reclaim a number of old exploration boreholes and alluvial monitoring wells, primarily in the Kerr <br />North Area north of the County Road. This work was completed in October 2002. The annual <br />inspection of the existing 8 groundwater/spoil monitoring wells was completed in April 2006. All <br />wells were noted in good condition with no need for repairs. <br />10.0 LOADOUT AREA <br />Final reclamation activities were completed for the Loadout Area (approximately 7 acres) during <br />1999. The Loadout Area was re-seeded in October 2000 and good growth was evident during <br />the bond release inspection in May 2001. No maintenance or repairs were warranted in the <br />Loadout Area in 2006. The access road, shop and warehouse area are considered permanent. <br />11.0 GRAZING <br />Kerr obtained prior approval from DRMS for grazing. In 2003 and 2004, 500 head of cattle were <br />grazed on the mine land. In 2005 and 2006, the grazing schedule was modified and due to the <br />year 9 and 10 vegetation study being conducted in the area. There was no grazing on the Mine <br />area during those years. <br />6371/20062006 annual recl rpt NWCC INC. Page4 <br />