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PERMIT #: M-1984-036 <br />INSPECTOR'S INITIALS: PSH <br />INSPECTION DATE: May 20, 2011 <br />OBSERVATIONS <br />This was a pre-operation inspection of the Varra Resources Project 110 (formerly Dakolios Pit No. 1), File No. <br />1984-036, amendment (AM-02) application conducted by Peter Hays with the Colorado Division of <br />Reclamation, Mining and Safety (Division). Mr. Christopher Varra, Garrett Varra and Brad Janes were present <br />during the inspection. <br />The 112c amendment application package was received by the Division on February 15, 2011 and deemed <br />complete for purposes of filing on March 28, 2011. The Varra Resources Project 110 is located north of the <br />Town of Firestone and southeast of the intersection of Weld County Road 13 and St. Wain Creek in Weld <br />County Colorado. The required notice signs were posted at the entrance gate and at the corners of the permit <br />boundary. <br />The proposed Varra Resources Project 110 amendment will revised the post-mining land use from developed <br />water resources to general agriculture (with developed water resources) and update the reclamation plan to <br />clarify the planned agricultural activities at the site. Mining extraction activities at the site are complete. The <br />two clay lined water storage basins are completed in the southeast and northwest sections of the site. The <br />northeast section of the site will be used for agricultural storage and is currently being backfilled to eliminate <br />the exposed groundwater at the site. An additional 2 feet of fill material will be placed in this area to create a <br />suitable storage area and the existing stockpiles and recycling equipment and stockpiles will be removed. <br />All man-made structures appeared to have been identified by the applicant in the conversion area. No <br />problems were noted during the inspection. <br />The Division mailed an adequacy letter to the Applicant requesting additional information on the proposed <br />amendment on May 24, 2011. The current decision date for the amendment (AM-02) application is June 27, <br />2011 <br />The pre-operation inspection photographs are attached below. <br />Inspection Contact Address <br />Christopher Varra <br />Varra Companies Inc <br />8120 Gage Street <br />Frederick, CO 80516 <br />Cc: Tony Waldron; Division of Reclamation, Mining and Safety <br />Page 2 of 4