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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-1987-028 <br />INSPECTION DATE 10/07/08 INSPECTOR'S INITIALS PSH <br />OBSERVATIONS <br />The Lily Mines, File No. M-1987-028, was inspected by Peter Hays with the Division of <br />Reclamation, Mining and Safety (Division) in response to a Succession of Operator (SO-05) <br />request received by the Division from Quikrete Materials, LLC on October 6, 2008. Mr. <br />Gary Feltes representing Quikrete Materials was on site during the inspection. <br />The Lily Mines site is located approximately 15 miles-west of Poncha Springs, Colorado on <br />State Highway 50. The site was previously inspected by the Division on August 10, 2007. <br />Mining and reclamation activities were not occurring during this inspection. The mine was <br />closed for the winter on September 30, 2008 per the lease agreement with the U.S. Forest <br />Service. The upper mine bench access roads were blocked with boulders to prevent access <br />from Forest Road 228 which runs through the site. <br />Quikrete Material, LLC purchased the mill associated with Lily Mines from Colorado Marble, <br />Inc. in June of 2008. Quikrete has been purchasing marble from the Lily Mines for several <br />years to sell as landscape rock. Quikrete has decided to assume the mining operations and <br />reclamation responsibily for the Lily Mines from Colorado Marble. Quikrete intends to <br />contract mine the site as needed. Three product stockpiles were located on the mine floor <br />during the inspection. The stockpiles consisted of minus 3/4", 2" to 1 1/2" and 1 1/2" to <br />3/4" material. <br />During the previous inspection conducted on August 10, 2007, several items required <br />correction by the operator. These areas were reinspected and are listed below. <br />Colorado Marble committed to conduct a permeation test in the lower pit area in the spring <br />or early summer of 2006. Mr. Feltes stated the permeation test was completed by Colorado <br />Marble. Mr. Feltes stated he would contact Colorado Marble and provide the Division with <br />a copy of the results. <br />The regraded and revegetated waste pile was reinspected to assess the revegetation effort <br />and stability of the slope. The 2008 annual report submitted by Colorado marble indicated <br />the waste pile was reseeded in 2007. Approximately one year of slender wheatgrass growth <br />and evidence of mulching were observed. The rip-rap armoring along the sides of the waste <br />pile were observed. The regraded waste pile appeared stable and no erosion was noted. <br />The topsoil salvaged from the waste pile during regrading was not observed on site. Mr. <br />Feltes stated he would contact Colorado Marble to determine were the topsoil was <br />stockpiled. <br />The reclaimed section of road owned by Colorado Lime was reinspected. The location of the <br />road was difficult to determine due to snow cover, however it appeared little to no <br />vegetation existed in the area. The Division recommends replacing topsoil and reseeding <br />the area with the approved seed mixture. <br />The operator was required to rip-rap armor the section of Taylor Creek below the Forest <br />Road 228 crossing to prevent erosion and continued sedimentation of the channel. The rip- <br />rap armoring was observed during the inspection and no erosion or sedimentation was noted. <br />The dimensions and revegetation of the upper water diversion ditch immediately west of the <br />highwall could not be accessed during this inspection due to the blocked access roads. <br />The entrance sign was not observed during the inspection. Mr. Feltes provided the <br />Division photographic evidence of the entrance sign on November 14, 2008. No other <br />problems were observed during the inspection. <br />The Division currently holds a reclamation bond in the amount of $282,000. Based on this <br />inspection the bond is adequate to cover the reclamation costs for the Lily Mines site.