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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-2006-077 <br />INSPECTION DATE 06/07/2010 <br />OBSERVATIONS <br />INSPECTOR'S INITIALS PSH <br />The Morgan Pit, File No. M-2006-077, was inspected by Peter Hays with the Division of Reclamation, Mining <br />and Safety (Division) as part of the Division's monitoring inspection program. Mr. Paul Morgan with Paul <br />Morgan Excavation, Inc. and Mr. Joe Gagliano with L.J. Development, Inc. were present during the inspection. <br />The Morgan Pit is located approximately 1.5 miles southwest of La Veta, Colorado in Huerfano County. The <br />site was previously inspected by the Division on December 11, 2006. <br />The site is actively mined. A screening plant and various product stockpiles were observed during the <br />inspection. The northwest corner of the site has been mined approximately 25 feet deep to the pit floor. <br />Mining will continue to the south. The Operator stated a heavy rain storm occurred the night before the <br />inspection. Stormwater was observed in the pit and near the screening plant. The stormwater appeared to be <br />seeping into the ground and is not considered a concern by the Division. No groundwater was observed. <br />The approved post mining land use is industrial/commercial. The southern 50 feet of the west highwall has <br />been temporarily sloped to 2:1. No other reclamation activities were observed. Topsoil and overburden <br />stockpiles were located in the southwest and southeast corners of the currently disturbed area. The stockpiles <br />were stable and coved with vegetation. No erosion was noted during the inspection. <br />No fuel storage or noxious weeds were observed during the inspection. The site was well organized and <br />consistent with the description provided by the Operator in the 2010 Annual Report. An entrance sign was <br />posted and permit boundary markers were observed as required by Rule 3.1.12. No problems were noted <br />during the inspection. The Division currently holds a financial warranty of $8844, which is adequate to <br />complete the reclamation of the site based on the observations from this inspection. <br />During the inspection, Mr. Morgan asked the Division to investigate if Huerfano County was compensating the <br />landowner of the Kreutzer Gravel,Pit, Mr. Kreutzer, with free gravel, which the landowner is reportedly selling <br />below market cost. The Division contacted Ms. Melanie Bounds with Huerfano County to discuss the matter. <br />Ms. Bounds stated Huerfano County was not compensating Mr. Kruetzer with free gravel from the Kruetzer <br />Gravel Pit. A stockpile of material was left on site for the personal use of Mr. Kruetzer within his property and <br />he was informed by the County he was not allowed to sell the gravel. The Division will continue to monitor <br />this matter and will proceed with enforcement actions if evidence Mr. Kruetzer sold material is provided to <br />the Division. <br />Inspection Contact Address <br />NAME Paul Morgan <br />OPERATOR Paul Morgan Excavating, Inc. <br />STREET 581 County Road 420, P.O. Box 82 <br />CITY/STATE/ZIP La Veta, Colorado 81005 <br />Cc: Joe Gagliano; L.J. Development, Inc.