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(Page 3) <br />MINE ID # OR PROSPECTING ID #: M-81-202SG <br />INSPECTION DATE: 3-25-09 <br />INSPECTOR'S INITIALS GRM <br />Topsoil is stockpiled along the southern and northern edges of the pit area and provides a visual barrier. Older <br />stockpiles appear to have a wheat grass on them and newer stockpiles have not been in place long enough to require <br />stabilization. The operator is reminded that any topsoil left in place for more than one growing season must have <br />some kind of erosion control such as a grass or other positive vegetative cover. <br />Overall the pit appears to be following the approved mining plans. Reclamation has been done along the lake in the <br />Phase 1 area and some backfill and sloping along the southern edge as well. The bond has not been updated for <br />some time. While reclamation and total disturbance is below the original estimate inflation may be a factor. DRMS <br />will be doing an update on the bond sometime in the near future. The update will reflect current conditions and <br />inflation. <br />Responses to this inspection report should be directed to Russ Means at the Division of Reclamation, Mining and <br />Safety, Grand Junction Field Office, 101 South 3rd Street, Room 301, Grand Junction, Colorado 81501, phone no. <br />970-241-1117. <br />I & E Contact Address cc: <br />? CE <br />NAME: Fred Frei ? BLM: <br />OPERATOR: Flag Resources Inc. ? FS <br />STREET: 1412 CR 311 ? HW <br />CITY/STATE/ZIP: New Castle, CO 81641 ? HMWMD (CH) <br />? WQCD (CH) <br />? OTHER: