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(Page 2) <br />MINE ID # OR PROSPECTING ID #: M-2003-016 <br />INSPECTION DATE: 4/01/2010 INSPECTOR'S INITIALS: ECS <br />OBSERVATIONS <br />This was a surety reduction inspection for an active 112c sand and gravel operation conducted by Eric Scott of <br />DRMS for the Heit Pit site. Access to the site is via a gate on the west side of County Road 25 and north of <br />County Road 2020. DRMS met with permittee representative Jon Benallo of SW Chambers on site at <br />approximately 0920 and toured the site with him. Also present on-site was operator representative Russ Bartz <br />of Pioneer Sand. The permit sign was posted and site boundaries were marked by fences surrounding the <br />permitted areas. The site appeared to be well run and in compliance with the approved mining plan at the time <br />of the inspection. <br />The SR for this site is a bond reduction of $110,614 - the remaining 20% of the construction bond that was <br />posted for the slurry wall that surrounds the pit. The Colorado State Engineer's Office (SEO) approved the <br />slurry wall as meeting their design standard in a letter to dated June 24, 2009. Because the slurry wall has <br />already been approved by the SEO, the SR was approved on March 23, 2010 - the date it was submitted and <br />found complete by the Division. Assuming there are no objections, the $110,614 bond associated with the <br />slurry wall will be released on April 22, 2010 when the 30 day appeal period of the Division's decision expires. <br />The remaining bond of $197,280 will remain in place to cover the remainder of the approved reclamation plan <br />requirements. <br />The permittee and operator have also submitted S.O. paperwork that will transfer the existing permit to Pioneer <br />Sand when the SR is finalized on April 22, 2010. Pioneer will supply a replacement bond for the remaining <br />amount of $197,280. <br />I & E Contact Address <br />Jon Benallo <br />SW Chambers, LLC <br />6025 South Quebec St Ste 250 <br />Centennial CO 80111