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STATE OF COLORADO <br />DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3567 <br />FAX: (303) 832-8106 <br />October 7, 2008 <br />Darwin Derr <br />Broken Arrow Investment, LLC <br />699 N. First Avenue <br />Greeley, CO 80631 <br />COLORADO <br />D I V I S I ON OF <br />RECLAMATION <br />MINING <br />SAFETY <br />Bill Ritter, Jr. <br />Governor <br />Harris D. Sherman <br />Executive Director <br />Ronald W. Cattany <br />Division Director <br />Natural Resource Trustee <br />RE: Reason to Believe a Violation Exists at the Derr Pit; DRMS File # M-2008-017 <br />Dear Mr. Derr: <br />On October 3, 2008 the Division of Reclamation, Mining and Safety conducted an inspection of <br />your mine located approximately 1 mile east of Greeley, Colorado and found the following: <br />A Construction Material Regular (112) Operation Reclamation Permit Application Package for the <br />Derr Pit was received by the Division on April 10, 2008. The Division is currently reviewing the <br />permit for adequacy concerns. The Division's decision date is set for November 3, 2008. <br />During the inspection an excavated area was observed within the northeast portion of the proposed <br />permit area, east of the existing gravel road. <br />Based on the findings of the inspection we believe that this is a violation of C.R.S. 34-32.5-109(1) <br />for failure to obtain from the board or office a reclamation permit prior to engaging in a new <br />mining operation. Specifically, mining operations had occurred on property owned or controlled <br />by Darwin Derr. <br />Therefore, we have reason to believe that a violation exists to DRMS File Number M-2008-017 and <br />to the Law, and have scheduled this matter to appear before the Mined Land Reclamation Board. <br />A Formal Public Hearing will be held during the October 15th and 16th, 2008 Board Meeting for <br />consideration of a possible violation. The hearing will be held in Room 318 of 1313 Sherman <br />Street, Denver, Colorado, beginning at 9:00 a.m. on October 15th or as soon thereafter as the matter <br />can be considered. At that hearing you will have the opportunity to be represented and heard. It <br />will be reiterated that there is reason to believe that you are in violation of the provisions noted <br />above. <br />If the Board finds a violation at this hearing, it may issue a Cease and Desist Order and/or assess a <br />Civil Penalty in the amount of $ 1000.00 to $5,000.00 for each day of violation. If you have <br />evidence indicating that the possible violations noted above do not exist or have been corrected, <br />please provide it to us as soon as possible or bring it to the hearing. <br />Office of Office of <br />Mined Land Reclamation Denver • Grand )unction • Durango Active and Inactive Mines