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PERMIT #: M-1987-024 <br />INSPECTOR'S INITIALS: GRM <br />INSPECTION DATE: May 5, 2011 <br />OBSERVATIONS <br />This inspection was conducted as part of the normal monitoring program of the Colorado Division of Reclamation, <br />Mining, and Safety (Division). Division inspector Russ Means was accompanied by Western Gravel representative <br />Shauna Hovey. The Corey Pit #3 is a 50.7 acre, 112c permitted site located south of Montrose, Colorado. The last <br />inspection of the site was a pre-operational inspection to convert the 110c to a 112c in 2004. While overdue for <br />periodical inspection, the current inspection is due primarily to pending Division action on financial warranty forfeiture <br />for a cancelled bond. <br />The mine identification sign and affected area boundary markers are in place and in compliance with Rule 3.1.12. The <br />sign is located at the entrance to the site as it enters the permit access point. Permit boundaries are marked by t-posts <br />and fencing that clearly marked the affected areas. <br />The mine is currently active. The inspector observed a front-end loader excavating materials from the southwest section <br />of the pit and moving to a screen / stacker. Several piles of processed material were observed located in the <br />approximate 5acres of current mine area. Another 7 acres is disturbed with road access and stockpiling of topsoil and <br />overburden. The 12 acres total disturbance is consistent with operator annual reports. <br />No reclamation is noted in the disturbance area. The inspector and operator representative discussed the possibility <br />reclaiming approximately 5 acres and reducing highwalls to lower the reclamation liability for the site. A Technical <br />Revision to commit to 3:1 slope mining and reduce the overall disturbance from 20 down to 13 to 15 acres could further <br />reduce the liability. As noted in 2004, the topsoil was not salvaged or was very limited. The operator has brought in <br />some fill material and topsoil to start reclamation but has not initiated the tasks. <br />The inspector notes the beginning of a tamarisk infestation. If left untreated the tamarisk will hinder reclamation <br />success and potentially any release request. The operator is advised to cut and spray the trees as required under the <br />weed management plan. The issue is not a problem provided the operator addresses the issue. <br />No groundwater issues were observed. No issues were observed with sedimentation or erosion controls. <br />The financial warranty for reclamation liability was recalculated in 2004 as part of the conversion process. The estimate <br />covers approximately 20 acres. However, only approximately 12 have been disturbed as noted. A bond update will be <br />included with this report separately. <br />No problems or violations were noted or observed in regard to the mine or reclamation plans at this time. <br />Responses to this inspection report should be directed to Russ Means at the Division of Reclamation, Mining, and Safety, <br />Grand Junction Field Office, 101 South 3rd Street, Room 301, Grand Junction, Colorado 81501, phone no. 970-241-1117. <br />Inspection. Contact Address <br />Shauna Hovey <br />Western Gravel, Inc. <br />3001 N. Townsend Ave. <br />Montrose, CO 81401 <br />Page 2 of 3