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GCC <br />Rio Grande <br />ANNUAL REPORT OF GCC RIO GRANDE TO DIVISION OF RECLAMATION <br />MINING AND SAFETY <br />August 29, 2008 <br />Pursuant to C.R.S. 34-32-116, as operator and permittee holder of a Colorado Mine Land <br />Reclamation permit, GCC Rio Grande, Inc. ("GCC") submits the following Annual Report to the <br />Colorado Division of Reclamation Mining and Safety for Permit M-2004-004. <br />A. BACKGROUND INFORMATION <br />Over the past year, the majority of construction related activities at GCC's Pueblo <br />Portland cement manufacturing facility and limestone mine have been completed. As a result, <br />GCC is focusing its attention and its work on the completion of certain final construction items, <br />the commissioning of plant equipment, general site clean-up, initiating limestone mining for <br />cement production purposes, as well as remediation and stabilization efforts at its plant and <br />quarry site. <br />B. SPECIFIC FACILITY - RELATED ACTIVITIES <br />GCC continues to maintain an active program of coordinating, pursuing and maintaining <br />compliance with all required local, state and federal permitting as well as completing any <br />remaining construction activities of the facility. These activities have involved the expenditure <br />and commitment of substantial human and financial resources towards completion of the project. <br />The following is a description of the quarry activities, remaining construction activities and plant <br />commissioning activities that are underway. <br />1. Quarry Activities. The quarry has been opened and GCC is engaged in limited <br />limestone mining for cement production purposes. In accordance with the lease that GCC holds <br />with the State of Colorado Board of Land Commissioners, GCC has been paying monthly <br />mineral production royalties since November, 2007. As of the end of July, 2008, the aerial size <br />of the limestone quarry was approximately six acres. Due to the limited number of acres mined <br />thus far and because the quarry is still being developed, reclamation activities in the quarry have <br />not yet begun. <br />Given the current configuration of the quarry area, GCC will continue to work to <br />complete installation of all primary components associated with the limestone crushing and <br />conveying system. The remaining components include the installation of a specialized <br />conveying and material transfer system designed specifically to operate with the mobile crusher. <br />Mining is planned to progress in a westerly and primarily southerly direction. GCC anticipates <br />that there will be sufficient room within the quarry area to complete this installation within the <br />next few months. <br />DN:32128119.2