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(Page 3) <br />MINE ID # OR PROSPECTING ID # M-1978-091 UG <br />INSPECTION DATE 9/24/09 <br />INSPECTOR'S INITIALS RCO <br />The outer crest of the upper pad is composed of recently placed (2008) earthen material, and it is exhibiting stress cracks <br />and slight settling. This was pointed out to the operator, so that it might be dealt with: i.e., buttress slope with Level 6 <br />material by placement and compaction on the lower Level 3 dump pad, for example. The operator should act soon to <br />prevent a failure of this material too. At this time there is no problem, but it could become one if not timely stabilized. <br />ACCESS ROAD. The access road contains adequate drainage controls: borrow ditches, berms and culverts. The <br />recently disturbed surfaces however are becoming vegetated with several species of annual weeds: cheat grass along the <br />upper end of the road, a bushy annual mustard (species?), and stunted tumbleweed. (Note: there is downy brome, a <br />desirable grass that has similar appearance to cheat grass along lower stretches of the road, which should be left <br />inplace.) The annual weeds have gone to seed, and will resprout in 2010, so the operator should contact the county weed <br />district for treatment options, as well as buy and apply some seed species listed in the approved reclamation plan. This is <br />not a problem now, but it will add to the reclamation time and possibly cost if not addressed soon. There were no noxious <br />weeds noted. <br />The bond was recalculated in 2008 and is considered adequate at this time. <br />No further items were observed during the inspection. Responses to this inspection report should be directed to this <br />inspector at the Division of Reclamation, Mining and Safety, 691 County Road 233, Suite A-2, Durango, Colorado 81301. <br />(Please note: As of 7/1/08 the Durango Field Office moved to the new address shown above Please revise your <br />records as necessary.) <br />I & E Contact Address <br />NAME <br />OPERATOR <br />STREET <br />CITY/STATE/ZIP <br />Kve Abraham <br />LKA International. Inc. <br />3724 47t' St. Ct. NW <br />Gig Harbor, WA 98335 <br />cc: Steve Shuey, DRMS <br />? CE <br />? BL <br />? FS <br />? HW <br />? HMWMD (CH) <br />? SE <br />? WQCD (CH) <br />? OTHER <br />Cc: Dave Lazorchak, BLM, 216 Colorado, Gunnison CO 81230 <br />Michael Quinlan, Gault Group, 36 W Main St., Cortez CO 81321