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(Page 2) <br />MINE ID # OR PROSPECTING ID #: M-1992!106 <br />INSPECTION DATE: 7/9I/n9 INSPECTOR=S INITIALS: MAC <br />OBSERVATIONS <br />The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety <br />(Division). Garrett Varra and Brad Janes of Varra Companies, Inc. were also present for the inspection. The <br />Kurtz Resource Recovery and Land Development Project site is located approximately 1.5 miles from Mead, <br />Colorado. The site is permitted for 295.40 acres, with a Maximum Allowed disturbed area of 85.20 acres. <br />The permit sign was posted at the entrance to the site and the boundary of the affected area was clearly <br />delineated per Rule 3.1.12. The permitted area is transected by Weld County Road 17; the permitted area that <br />lies to the west of Weld County Road 17 is undisturbed. Active mining operations are currently taking place in <br />Basin IV. The Maximum Allowed disturbed area is 85.20 acres; however, the actual disturbance exceeds this <br />amount. The Mining Plan Map shows that six separate basins will be extracted, resulting in six separate <br />reservoirs. At present, all six basin areas are disturbed, resulting in a total disturbed area of approximately 180 <br />acres. In addition, several other discrepancies were noted between the Mining Plan and actual site conditions. <br />The Mining Plan states that the topsoil will be windrowed along the perimeter of the basins. The topsoil has <br />instead been placed in a single stockpile located south of the plant site; the stockpile has been vegetated and is <br />stable. Furthermore, the original wash pond has been abandoned and a new one has been created in the southeast <br />corner of the permit area. The Financial Warranty was calculated using the details of the Mining Plan and <br />Reclamation Plan that were contained within the approved Reclamation Permit. The changes that have been <br />made to the Mining and Reclamation Plans have a direct impact on the amount of the Financial Warranty the <br />Division holds. The Division is required to hold a Financial Warranty in an amount sufficient to complete <br />reclamation of affected lands per C.R.S. 34-32.5-117(4)(b)(I). Therefore, the Division will need to recalculate <br />the Financial Warranty for this site in accordance with Rule 4.1.2(4). A follow up inspection will be scheduled <br />so the extent of the disturbance can be calculated. <br />The Operator indicated that they wish to create a single reservoir, instead of six individual reservoir basins. In <br />preparation of creating a single reservoir, the Operator has relocated the high pressure gas line that was situated <br />on the north and east sides of Basin IV. In addition, the Operator has received approval from the Army Corps of <br />Engineers to route a seep ditch from the west side of Basin V to the east side. This will allow the west pit wall <br />of Basin V to be mined through, in order to connect Basin IV to Basin V. The Operator shall address all of these <br />changes to the permit through a Technical Revision. Please see Page 3 of this report for the required corrective <br />actions. <br />This concluded the inspection. <br />I & E Contact Address <br />NAME: Garrett Varra <br />OPERATOR: Varra Companies <br />STREET: 8190 GQP St <br />CITY/STATE/ZIP: FrPrJPrick. CCU 80516