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PERMIT #: M-1981-068 INSPECTOR'S INITIALS: DMC INSPECTION DATE: August 2, 2010 <br />OBSERVATIONS <br />This inspection was conducted in response to a phone call received by the Division of Reclamation, Mining and <br />Safety (DRMS) from Grant Bros. Construction Ltd. (operator), in which the operator reported to DRMS that <br />possibly contaminated water was seeping through the western pit wall of the Loesch Pit in several locations. <br />The source of this water has been identified as a leaking production water pipe owned by Antero Resources. <br />The leaking pipe is located approximately 60-65 feet outside and east of the Loesch Pit permit boundary. It is <br />the determination of DRMS that this pipeline breach was not caused by any portion of the Loesch Pit <br />mining operation. <br />The leak has been reported by the operator within a timely manner to the appropriate agencies - CDPHE, <br />COGCC, City of Rifle, etc. <br />During the time of this inspection the possibly contaminated water was being pumped by Antero Resources <br />from the main seepage point within the Loesch Pit, back onto Antero property to a frac-tank which would be <br />periodically drained by vacuum trucks. Skimming booms were being utilized to prevent some of the <br />contaminant(s) from travelling further into the pit area. <br />The contaminant(s) and extent of contamination were not known at the time of this inspection, as an <br />environmental impact analysis had not yet been completed. <br />Also noted during the inspection was the use of synthetic liners being installed, by the operator, along the pit <br />wall beneath the topsoil prior to final grading. This is not currently included in the approved Reclamation Plan <br />and is noted above as a problem. <br />Page 2 of 7