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PERMIT #: M-2010-037 <br />INSPECTOR'S INITIALS: MAC <br />INSPECTION DATE: August 24, 2010 <br />OBSERVATIONS <br />The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety <br />(Division). Tony Niebur, representing the Permittee, was also present for the inspection. The Masters Pit #2 is <br />located approximately 11 miles southeast of Anton, Colorado. The proposed permit boundary is 80 acres and <br />the proposed post mining land use is rangeland. <br />This inspection was conducted as a pre-operational inspection for a 112 Construction Materials Reclamation <br />Permit. The Operator currently holds a 110 Construction Materials Reclamation Permit (M-2009-029) for 7.7 <br />acres on the Arickaree River, which is located within the proposed 112C permit boundary. The 110C permit <br />was issued on June 15, 2009. The Operator submitted Technical Revision -02 (TR-02) on April 7, 2010. The <br />Operator proposed revising the location of the permit boundary, by removing permitted acreage from within the <br />Arikaree River and adding it to the existing load-out area. The total permitted acreage would have remained at <br />7.7 acres. The Division conducted an inspection of the site on May 3, 2010 to determine if the proposed changes <br />to the permit required a Technical Revision or a Permit Amendment. During the course of the inspection, it was <br />noted the Operator had disturbed 0.75 acres outside of the permit boundary. The Division cited a possible <br />violation for mining outside of the permit boundary and the matter went before the Mined Land Reclamation <br />Board (MLRB) on June 9, 2010. The MLRB found the Operator was in violation of C.R.S. 34-32.5-116 (4) (i) <br />for failure to protect areas outside of the affected land from slides or damages occurring during the mining <br />operation. The MLRB ordered the Operator to submit and obtain approval of an amendment or a new <br />application within 90 days of the signed MLRB Order. The Operator submitted the 112C permit application on <br />June 17, 2010. The Division is currently reviewing the permit application and the decision date is September 15, <br />2010. <br />The proposed 80 acre permit boundary was traversed during the inspection. Mining is currently taking place <br />within the bed of the Arickaree River on the west side of County Road JJ. The excavation contained standing <br />water from a rain event which occurred approximately one week before the inspection was conducted. The <br />water is contained within the natural drainage system and is therefore not considered a problem. Mr. Niebur <br />indicated mining would be contained to the bed of the Arickaree River. The proposed Mining Plan and Mining <br />Plan Maps indicate mining would also occur to the north of the Arickaree River. If the Operator will not mine <br />areas outside of the Arickaree River, then all applicable exhibits of the 112C application should be revised <br />accordingly. <br />Based on this inspection, no observations were made that would restrict the approval of this application. This <br />concluded the inspection. <br />Page 2 of 3