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Mr. Michael A. Cunningham - May 25, 2011 <br />Page Two <br />Compliance Problem 2: A Thin Layer of Tailings Was Deposited on the Outslope of the <br />Tailing Dam. <br />AGC has established and implemented a weekly inspection and monitoring program to <br />document tailing impoundment conditions wherein observed conditions are recorded on a <br />regular basis by the onsite inspector. Since inception, no significant tailing excursions (i.e., <br />wind-borne dispersion) have been noted. In the event significant excursions are observed, AGC <br />remains committed to immediate or timely implementation of a surface wetting program as a <br />mitigation measure. With the continued commitment to the ongoing monitoring and mitigation <br />program requirements) AGC considers this item to require no further action. <br />Compliance Problem 3: Incorrect Financial. Warranty Bond Form on File. <br />AGC submitted the proper joint agency (DRMS and BLM) financial warranty form to the Division <br />in early March. In a letter of March 16, 2011 (to AGC) it was indicated by the Division that the <br />form had been received/accepted by the Division and that transfer and/or restructuring of the <br />existing financial warranty to that of a joint obligee account had been completed. Thus, AGC <br />considers this item to require no further action. <br />Compliance Problem 4: The Permit Boundary Was Inadequately Marked. <br />AGC, utilizing a Colorado Registered Land Surveyor, has had the permit boundary re-surveyed, <br />with completion occurring on April 20, 2011. A copy of the survey documentation is attached <br />(with a pdf version to be sent this date via email), and AGC notes that all corner posts and <br />regularly spaced intervals were "permanently" field-staked with steel "T" posts, as indicated on <br />the attached figure. Thus, AGC considers this item to require no further action. <br />AGC trusts that the foregoing is fully responsive to the identified corrective action requirements. <br />If it is determined by the Division that there are any further corrective action requirements, AGC <br />remains committed to ensuring that all any such items are properly addressed. If you have any <br />questions, please contact the undersigned directly at (303) 985-1521. <br />Sincerely, <br />J. M. BECK & ASSOCIATES <br />James M.'Beck, P.E. <br />Principal - Mining Engineer <br />(Consultant to AGC Resources, LLC) <br />Attachment - Survey Plot (Permit No. M1994-117) <br />Cc: S. Carter - BLM <br />P. C. Jones, P.E. - Sovereign Management Group, Ltd. <br />M. Montgomery - AGC