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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-1978-305 <br />INSPECTION DATE 6-23-2008 <br />OBSERVATIONS <br />INSPECTOR'S INITIALS SSS <br />This inspection was conducted to ensure the site is in compliance with the requirements of the Act, Rules and conditions <br />of Permit No. M-1978-305 for the transfer of the permit as requested by Succession of Operators No. 4. The inspection <br />was also conducted to evaluate site conditions for recalculation of the reclamation cost estimate with updated costs and <br />to incorporate the changes approved by Technical Revision No. 3. This revision was approved earlier this year, but <br />deferred recalculation of the reclamation cost estimate because the site was under cover of significant snow pack. <br />The powerline that originally bisected the site has been relocated to the north of the site. The pillar of rock where one of <br />the power poles was located, in the center of the site, is now being excavated. <br />Slopes above the pillar area have been graded and seeded. Some vegetation is becoming established on these slopes. <br />Mr. Wilcox clarified that this area will now be excavated as part of the revised mine plan. <br />The site appeared to be clean and orderly. No significant infestations of noxious or other problematic weeds were noted <br />on site during this inspection. No significant erosional features were noted on the affected areas of the site. <br />In an effort to ensure the financial warranty remains adequate to reclaim this site per the requirements of the approved <br />reclamation plan (most recently revised by TR-03), DBMS has updated the reclamation cost estimate (copy enclosed). <br />Clearly, the site is currently under-bonded. Therefore, pursuant to Section 34-32.5-117(4) of the Colorado Land <br />Reclamation Act, adequate financial warranty must be submitted to DRMS within 60 days of the mailing date of this <br />report. Please review the enclosed figures as soon as possible and contact our office if any calculation errors are noted. <br />The approval or denial of the Succession of Operators No. 4 rests on acceptance of the updated reclamation cost <br />amount by the Successor operator, Gunnison Aggregate Resources, LLC. As Warren Wilcox is the contact person for <br />both the current operator and the pending successor operator, DRMS requests through this inspection report with <br />reclamation cost estimate enclosed, that the successor operator notify DRMS of acceptance or rejection of the enclosed <br />cost figures. <br />DRMS recommends that the operator install Markers to delineate each Zone (phase) of the mine plan to ensure acreage <br />disturbed at any one time does not exceed that specified in the permit. <br />Responses to this inspection report should be directed to Steve Shuey at the Division of Reclamation, Mining and Safety, <br />Grand Junction Field Office, 101 South 3rd Street, Room 301, Grand Junction, Colorado 81501, phone number 970- <br />243-6368. <br />I & E Contact Address cc: <br />NAME Warren Wilcox <br />OPERATOR Gunnison Gravel and Earthmoving LLC <br />STREET P.O. Box 42 <br />CITY/STATE/ZIP Gunnison, CO 81230 <br />? CE <br />? BL <br />? FS <br />? HW <br />? HMWMD (CH) <br />? SE <br />? WQCD (CH) <br />? OTHER - NPS - Ken Stahlnecker <br />102 Elk Ave. Gunnison, CO 81230