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(Page 2) <br />MINE ID # OR PROSPECTING ID #: M-1986,-048 <br />INSPECTION DATE: Q/9/n9 INSPECTOR=S INITIALS: MAC <br />OBSERVATIONS <br />The inspection was conducted by Michael Cunningham of the Colorado Division of Reclamation, Mining and <br />Safety (Division). Galen Reese of Reese Contracting was also present for the inspection. The Nicholson Pit is <br />located approximately 3 miles northwest of Messex, Colorado. The site is permitted for 49.90 acres and the <br />approved post mining land use is general agriculture. <br />The permit sign was posted at the entrance to the site and the boundaries of the affected area were clearly <br />delineated per Rule 3.1.12. There was no mining taking place at the time of the inspection; mining is <br />progressing to the north along the western permit boundary. The topsoil has been stockpiled to the south of the <br />active mining area; the stockpile is vegetated with annual weeds and did not show any signs of erosion. The <br />active mining area consists of a vertical highwall that is 510 feet in length and ranges from 5 to 25 feet in height. <br />The pit wall to the east of the active mining area has been graded to 3H:1 V. Rills and gullies were observed on <br />the portions of the pit walls that have been graded. The gullies ranged from 6 inches to 4 feet in depth. The <br />erosion of the reclaimed pit wall has been cited as a problem and will require corrective action by the Operator. <br />Please see Page 3 of this report for the required corrective action. <br />The disturbed area was traversed using a Trimble GeoXT Global Positioning System unit. The data collected in <br />the field was downloaded into GPS Pathfinder Office 3.10 software; the disturbed area was determined to be <br />14.30 acres. The vegetation at the site consists mainly of annual weeds. The landowner uses the pit to <br />overwinter cattle; no cattle were present at the time of the inspection. <br />The Division currently holds a Financial Warranty in the amount of $45,000.00. Based on the observations of <br />the inspection, this amount has been determined to be sufficient to complete reclamation. <br />This concluded the inspection. <br />I & E Contact Address <br />NAME: Galen Reese <br />OPERATOR: Reese Contracting <br />STREET: P_0 Rox 105 <br />CITY/STATE/ZIP: Atwnod. C-0 80799