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(Page 2) <br />MINE ID # OR PROSPECTING ID #: M-9ppA-(9.S <br />INSPECTION DATE: 319?n9 INSPECTOR=S INITIALS: MA(- <br />OBSERVATIONS <br />The inspection of the Kunau Pit was conducted by Michael Cunningham of the Division of Reclamation, <br />Mining and Safety. The Kunau Pit is approximately 4.5 miles north of Yoder, Colorado in El Paso County. <br />Weather conditions were clear at the time of the inspection. <br />A Construction Material Regular (110) Operation Reclamation Permit Application Form for the Kunau Pit was <br />received by the Division on September 12, 2008. The Division is currently reviewing the permit for adequacy <br />concerns. The Division's decision date is set for April 30, 2009. During Mr. Kunau's initial contact with the <br />Division he stated that he had been removing material from the proposed mine site for use on his property. Mr. <br />Kunau was instructed to submit a "Need for a State Reclamation Permit" questionnaire, so that the Division <br />could determine if a reclamation permit was required for the activity on his land. The Division received the <br />questionnaire on May 19, 2008. The Division notified Mr. Kunau in a letter dated June 5, 2008, that he was <br />required to obtain a reclamation permit from the Mined Land Reclamation Board in order to legally conduct the <br />proposed activities that were outlined in the questionnaire. <br />This inspection was conducted in response to a complaint received by the Division on March 6, 2009. The <br />complainant stated that the Operator of the Kunau Pit was removing and hauling off material from the site prior <br />to obtaining a reclamation permit from the Division. <br />Prior to conducting the inspection, Mr. Kunau was contacted and notified of the complaint and the need to <br />inspect the site. Mr. Kunau stated that no mining or removal of material had occurred since submitting the <br />permit application to the Division. There was no mining activity taking place at the time of the inspection; no <br />mining equipment was present. Several excavations were noted on the property. Both of the excavations are <br />located at the end of the access road, towards the east end of the property. The site was traversed with a Trimble <br />GeoXT Global Positioning System (GPS) unit. The collected data was downloaded into GPS Pathfinder Office <br />3.10 software. The main excavation was found to be approximately 1.5 acres in size and is roughly in the shape <br />of a square. The pit was excavated from the east and west sides, leaving two highwalls on the north and south <br />sides of the pit. The highwalls are approximately sixteen (16) feet high and three hundred (300) feet in length. <br />There are two large product stockpiles towards the center of the pit. A topsoil stockpile is located to the north of <br />the pit. There is a smaller excavation located off of the northeast corner of the main pit. This smaller excavation <br />is approximately 0.14 acres in size. The present condition of the disturbed area does not pose any health or <br />safety risks. <br />Based on the findings of the inspection, the Division does not believe that the Operator is in violation of C.R.S. <br />34-32.5-109(1) for failure to obtain a reclamation permit prior to engaging in a new mining operation. Mr. <br />Kunau disclosed the current disturbance at the time the permit application was submitted to the Division. There <br />was no evidence that suggested that any disturbance has occurred after the Division received the permit <br />application. <br />This concluded the inspection.