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(Page 3) <br />MINE ID # OR PROSPECTING ID #: M-1979-045 <br />INSPECTION DATE: 22 July 2010 INSPECTOR'S INITIALS: DR? <br />The following problems (PB) and/or possible violations (PV) (and suggested corrective actions) were identified during this <br />inspection. The problems should be corrected by the dates given, or they will become possible violations. The possible <br />violations should be corrected by the dates given to reduce their severity when considered by the Mined Land Reclamation. <br />Board. The inspector noted on the previous page should be notified of all corrective actions taken. <br />PROBLEMS/POSSIBLE VIOLATIONS <br />AND <br />CORRECTIVE ACTIONS <br />CORRECTION DATE <br />1. Problem: The financial warranty is not at a level that reflects the actual cost to reclaim the site. TBD/ <br />PB or PV: PB <br />TOPIC(S): _FN <br />Corrective Actio n: To bring the operation into compliance with 04-32.5-11 7(4)(b)(1) C.R.S. and <br />f <br />ff <br />l f Rule - <br />l <br />4.2.1, the o <br />warranty up <br />the operato pera <br />to <br />r wil tor must provide additional <br />inancial warranty su <br />icient to bring the tota <br />ina <br />$476,200. Official notification of the increase will be sent under separate cover, <br />l have 60 days from the date of that letter to provide the additional amount. ncia <br />and <br />2. Problem: There is impounded water at the site that appears to be exposed ground water. This 04 /30 /2011 <br />represents a problem with respect to §34-32.5-116(4)(h) C.R.S. for failure to minimize disturbance <br />to the prevailing hydrologic balance of the affected lands during mining. <br />PB or PV: PB <br />TOPIC(S): lz <br />Corrective Action: The Operator has until 30 April 2011 to provide verification that one of the four <br />mitigative options, described in the April 30. 2010 letter, has been implemented in accordance with <br />State Engineer requirements to address the problem of exposed ground water, or submit evidence <br />that the impounded water is not ground water.