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<br />LJ DEVELOPMENT, INC. <br />256 N. MERRILL DRIVE <br />PUEBLO WEST, CO 81007 <br />PHONE: 719-240-9424 FAX: 719-583-0768 <br />DIVISION OF RECLAMATION, MINING and SAFETY <br />1313 SHERMAN STREET, ROOM 215 <br />DENVER, COLORADO 80203 <br />PHONE: 303-866-3567 <br />DATE: September 16, 2008 <br />RE: ANNUAL REPORT <br />PERMITTEE NAME: <br />PERMIT NO.: <br />OPERATION NAME: <br />ANNIVERSARY DATE: <br />ANNUAL FEE DUE: <br />COUNTY: <br />KAGAN & SON, L.L.C. <br />M-1994-114 <br />KAGAN & SON SOUTH PIT <br />OCTOBER 5, 2009 <br />$ 323.00 <br />CUSTER <br />Gentlemen: <br />Attached is a check in the amount of $323.00 for the annual fee for the preceding year. <br />Mining has not occurred this year. Mining may resume next year if the market demand <br />warrants. The disturbance area did not increase the surface disturbance. Therefore the <br />area remained the same approximately 2.25 acres and the mining will go to the west next <br />year. This pit is a long-term resource that will be in production for many years. This is an <br />active pit. Please see map for details. <br />incerely <br />Joe Gagliano <br />Consultant <br />Xc: KAGAN & SON, L.L.C. <br />€rle