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ANNUAL REPORT <br />PERMITTEE NAME: GCC Rio Grande, Inc. <br />PERMIT NO.: M-1997-064 <br />OPERATION NAME: Salt Canyon Project <br />ANNIVERSARY DATE: July 9, 2010 <br />Mining at the Salt Canyon Project has not started and is still in the preparatory stages. <br />Presently the only operation taking place at the location is a sampling process to be <br />certain that there is ample good quality gypsum for the cement industry. We will be <br />removing approximately 75 tons of gypsum for testing. We removed 50 tons last year for <br />testing and had questionable results. After the material was removed we reclaimed that <br />small area prior to the equipment being removed. We also drilled two four inch core <br />holes to check the depth of the gypsum to make sure we had ample useable gypsum to be <br />able to mine the area successfully. <br />After checking the deposits it was apparent that the preliminary process area needed to be <br />relocated to the northwest area of phase three behind the ridge. This is color coded <br />yellow on the map. We will have to establish this area first and then start mining to the <br />southeast. Mining in this way will allow the immediate capture of gypsum with minimal <br />disturbance to the land and at the same time staying out of the view shed of Hwy 115 <br />patrons. <br />The initial area mined will still be in portions of the initial phase one and two of the <br />original permit. The area on the map in green will be our area to start and will probably <br />not exceed that since we plan on using this mine only in the forth quarter of this year. <br />The area in.yellow_ and'.green will not exceed our ten acre original limit for this year. ` <br />As phase one (in green) is worked the process area will be moved in that direction and <br />the original process area in yellow will begin to be reclaimed and move in that same <br />direction. The work in this area will be buffered from view of the patrons along Hwy. <br />115 by the initial phase four area that runs parallel to the highway. <br />The only other work at the site will be to improve the one lane drive through the property <br />to the mine site. We will continue to use the established road into the property with only <br />an extension into the new process area. <br />Work at the site will commence on or about October 1, 2010.