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(Page 2) <br />MINE ID # OR PROSPECTING ID #: M -1985 -029 <br />INSPECTION DATE: 18 Deremher 2009 INSPECTOR'S INITIALS: DRZ <br />OBSERVATIONS <br />This inspection was conducted on 18 December 2009 by David Bird of DRMS in accordance with Hard Rock <br />Rule 1.12 governing Succession of Operator applications. Todd Ducommun, Scott Ducommun, Gerry Miller and <br />Zane Schmeechle were present representing the current operator. Benjamin Miller and Clayton Brown were <br />present representing the succeeding operator. Also present was Ryan Ellis of Greg Lewicki and Associates, <br />consultant to the operator. <br />The topic of discussion was whether the current configuration of the site still conforms adequately to the existing <br />Mining Plan on file with the Division, and whether the Reclamation Plan that will be implemented by the <br />succeeding operator will also conform to the plan on file with the Division. The purpose of these discussions was <br />to determine if an increase in the Financial Warranty should be required based on deviations from the plans, <br />potential inaccuracies in the original calculations, or inflationary adjustments. <br />Calculations performed by the Division were based as closely as possible on the conditions described in the <br />Amendment AM -04 application that was approved by the Division on 21 May 2004. Because the cost estimate in <br />the Amendment application was relatively thorough and was considered to be applicable to current operations, a <br />detailed site inspection was not performed at this time. Additionally, snow cover would have made some aspects <br />of an inspection difficult. <br />The Division's calculations indicate that the Financial Warranty currently on file for the site is inadequate. The <br />new required Financial Warranty for the site, which includes both the gold and gravel operations, is $290,654, <br />which is an increase of $173,268 over the amount currently held. This problem is also described on page 3 of <br />this report. Formal notice of the Financial Warranty increase has been sent under separate cover. Approval of the <br />Succession of Operator application is contingent upon receipt of the balance due within 60 days of the date of the <br />notice, which will be 21 February 2010. <br />The calculations supporting this Financial Warranty increase are attached. <br />I & E Contact Address <br />NAME: Paul Ducommun <br />OPERATOR: Ducommun Business Trust <br />STREET: P.O. Box 461 <br />CITY /STATE /ZIP: Monument. CO 80132 <br />cc: IF CE <br />IF BLM <br />IF USFS <br />IF HW <br />IF HMWMD <br />IF OSE <br />F WQCD <br />F OTHER <br />Alma Placer Company, LLC <br />Greg Lewicki & Assoc <br />