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(Page 3) <br />MINE ID # OR PROSPECTING ID # M-1980-041 <br />INSPECTION DATE 06/18/2010 <br />INSPECTOR'S INITIALS PSH <br />2010 Mined Land Reclamation Board Hearing. Based on the fact the possible violation was self-reported and <br />the Operator is not disputing the existence of disturbance outside of the permitted boundary, the Division will <br />place the item on the consent agenda. The Operator must cease all mining related activity at the site <br />immediately upon receipt of this inspection report except for those activities required to prevent damage to <br />off-site areas or protect the public health and safety and obtain an 112c Construction Materials reclamation <br />permit as described in the consent agreement mailed under separate cover between the Division and <br />Operator and/or as required by the Colorado Mined Land Reclamation Board's signed Board order. The notice <br />of possible violation, information regarding the Board hearing and consent agenda form will be sent under <br />separate cover. <br />The Rock Gulch site consists of an access road leading into the pit from County Road 107, the pit excavation, <br />product and waste rock stockpiles, equipment storage, an imported material dump area located east of the <br />access road and a residence located in the southwest corner of the site. No mining activity occurred during <br />the inspection, however evidence of recent mining activity was observed. The highwall has approximately 30 <br />feet high and mined at a .5H:1V slope. The highwall has advanced to the southwest since the previous <br />inspection. The stockpiles of processed and waste materials were located on the pit floor. The Operator <br />stated the imported stockpiles were placed on site over the years. The Division informed the current and <br />possible future Operator of the requirement to remove the imported material from the site, reclaim the area <br />and discussed the possibility of including the stockpile area into the permit boundary. No ground or storm <br />water was observed during the inspection. The mining activities are proceeding around the overhead power <br />line poles located within the affected area. A structure agreement between the Operator and the owner of <br />the power line could not be located by the Division. The Operator will need to provide a structure/easement <br />agreement for the power line poles during the 110c to 112c conversion application process. <br />The approved post mining land use for the site is rangeland. No reclamation activity was observed during the <br />inspection. As noted in the previous inspection, no topsoil stockpiles were observed. The Operator will need <br />to ensure all remaining topsoil is salvaged, protected and used for reclamation. <br />The Division currently holds a financial warranty of $31,000. Based on this inspection, the financial warranty is <br />not sufficient to perform the approved reclamation at the site. The Division will estimate the cost to reclaim <br />the site during the 110c to 112c conversion application review. <br />On June 23, 2010, the Operator, Mr. Treat, agreed to the consent agenda process by telephone. <br />I, Peter Hays, hereby certify that on June 24, 2010, 1 deposited a true and complete copy of this foregoing <br />inspection report in the United States Mail, first class postage paid, to the operator of record for this site at <br />the address indicated, and to those others within the body of this repor ho have been designated to receive <br />copies (DMG personnel excepted). <br />Si6atu