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r _ <br />Q DEVELOPMENT, INC. <br />256 N. MERRILL DRIVE <br />PUEBLO WEST, CO 81007 <br />PHONE: 719-240-9424 FAX: 719-583-0768 <br />DIVISION OF RECLAMATION, MINING and SAFETY <br />1313 SHERMAN STREET, ROOM 215 <br />DENVER, COLORADO 80203 <br />PHONE: 303-866-3567 <br />DATE. September 24, 2008 <br />RE: ANNUAL REPORT <br />PERMITTEE NAME: <br />PERMIT NO.: <br />OPERATION NAME: <br />ANNIVERSARY DATE: <br />ANNUAL FEE DUE: <br />COUNTY: <br />KAGAN & SON, L.L.C. <br />M-1994-114 <br />KAGAN & SON SOUTH PIT <br />OCTOBER 5, 2008 <br />$ 323.00 <br />CUSTER <br />Gentlemen: <br />Attached is a check in the amount of $323.00 for the annual fee for the preceding year. <br />Mining has been occurring this year and will continue for the foreseeable future. The <br />disturbance area did not increase the surface disturbance went deeper therefore the area <br />remained the same approximately 2.25 acres and the mining will go to the west next year. <br />This pit is a long-term resource that will be in production for many years. This is an <br />active pit. Please see map for details. <br />Sincerely, <br />Joe Gaglian <br />Consultant <br />Xc: KAGAN & SON, L.L.C. <br />Mile