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PERMIT #: M-1994-114 <br />INSPECTOR'S INITIALS: PSH <br />INSPECTION DATE: September 1, 2010 <br />OBSERVATIONS <br />The South Pit, File No. M-1994-114, was inspected by Peter Hays with the Division of Reclamation, Mining <br />and Safety (Division) as part of the Division's monitoring inspection program. Mr. Andy Kagan with Kagan & <br />Son, LLC was present during the inspection. <br />The following are general and itemized observations from the Division's inspection. <br />The South Pit is an 110c sand and gravel operation, permitted for 9.7 acres of disturbance. The permit was <br />issued on October 5, 1995. On August 24, 2004, the Division approved the succession of operator (SO-01) to <br />transfer the site from Nordyke Construction, Inc. to Kagan & Son, LLC. <br />The South Pit is located approximately 11 miles south of Westcliffe, CO in Custer County. The pit was last <br />inspected by the Division on September 29, 2005. <br />The boundary markers were GPS surveyed with a Trimble Geo XT by the Division. A map indicating the <br />results of the GPS survey is attached. <br />(FN) Financial Warrant <br />The Division currently holds a financial warranty of $26,460, which is adequate to complete the reclamation of <br />the site based on the observations from this inspection. <br />(MP) Gen. Compliance With Mine Plan: <br />The South Pit is an active site. Mining and processing occurred at the site last summer creating stockpiles of <br />3/4", 1 '/z" and road base materials. Mr. Kagan estimated 10,000 cubic yards of processed materials are located <br />on site, which is approximately a two year supply. Evidence of stockpiled material removal and a front-end <br />loader were observed. The highwall is progressing to the south and was ten feet high. The pit floor was dry and <br />no erosion was noted. No fuel was stored at the site. <br />The approved Mining Plan for the South Pit states the Operator will restrict operations to one acre at a time and <br />reclaim the disturbed acre prior to mining the next acre. Mr. Kagan stated he believed the mining plan had been <br />revised to allow for the entire permit site to be affected at one time. This is consistent with the current bond <br />calculation for 9.7 acres of disturbance. The Division could not find evidence of a revised mine plan in the <br />permit file. The Division suggests the Operator submit a technical revision per Rule 1.9, including the required <br />$216 fee, to revise Mining Plan to indicate 9.7 acres of total disturbance at one time. The Division estimates <br />there are four acres of disturbance currently at the site. <br />Mr. Kagan reported a small area had been affected outside of the permit boundary in the northwest corner of the <br />site. Mr. Kagan stated the dozer operator stripped the topsoil from a 12 foot by 12 foot area northwest of the <br />topsoil stockpiles. The Division considers the disturbance outside of the permit boundary to be incidental and <br />will not issue a notice of possible violation of C.R.S 35-32.5-116(4)(h)(1) for failure to protect areas outside of <br />the affected land from slides or damages occurring during the mining operation. The Operator stated the topsoil <br />would be replaced within a week and the area would be seeded this fall with the approved seed mix for the site. <br />(RS) Reclamation Success: <br />The approved post mine land use for the South Pit is rangeland. The Operator has regraded, topsoiled and <br />revegetated the eastern highwall left by the previous Operator. The slope was stable, no erosion was noted and <br />the vegetation was establishing well. Three topsoil stockpiles were observed during the inspection. All <br />stockpiles were vegetated and appeared stable. Evidence of weed control was observed during the inspection. <br />Page 2 of 5