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OBSERVATIONS <br />The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety <br />(Division). Garrett Varra, Brad Janes and Brad Jones of Varra Companies, Inc. were also present fo the 1.5 miles <br />inspection. The Kurtz Resource Recovery and Land Development Project site is located approximately <br />from Mead, Colorado. The site is permitted for 295.40 acres, with a Maximum Allowed disturbed area of 85.20 <br />acres. <br />Gen. Compliance With Mine Plan: <br />The inspection was conducted at the request of the Operator; the purpose of the inspection was to discuss <br />Technical Revision - 03 (TR -03) which was submitted to the Division on July 6, 2011 and is currently under <br />review. TR -03 addresses the mining of Tract C, which is located on the west side of County Road 17. Tract C is <br />included within the affected area; however, the mining and reclamation of Tract C has not previously been <br />addressed as the presence of wetlands made locating mining activities within Tract C difficult. The Army Corps <br />of Engineers have determined the wetlands on the west side of County Road 17 are jurisdictional waters of the <br />U.S. and therefore mining in this area was precluded. Tract C is currently defined as the 14.07 acre pasture <br />immediately south of the wetlands. <br />Backfilling and Grading: <br />The Division traversed the active portion of the mine site during the inspection; active mining operations are <br />occurring within Tract A. The Division confirmed that the pit walls have been reclaimed to final grade in <br />sections ib, ic, ii, iii, and portions of ia. The Operator is currently mining the remaining deposit from the pit <br />floor. <br />Financial Warranty: <br />The Division currently holds a financial warranty in the amount of $286,979. The financial warranty amount <br />was increased from $58,800 to the current amount under Surety Increase - 01 on January 8, 2010. The <br />Operator has proposed that the reclamation work which has occurred in Tract A since the financial warranty <br />was increased will offset the costs of reclaiming Tract C. The Division is in agreement that the grading work <br />which was performed in Tract A will offset the grading costs in Tract C; however, the Operator will need to <br />post an increased financial warranty to cover the costs of the dewatering, replacing topsoil and seeding Tract <br />C. Upon approval of TR -03, the Division will notify the Permittee of the increased financial warranty amount. <br />This concluded the inspection. <br />Inspection Contact Address <br />Garrett Varra <br />Varra Companies, Inc. <br />8120 Gage Street <br />Frederick, CO 80516 <br />CC: Brad Janes, Varra Companies, Inc. (via e-mail) <br />PERMIT #: M- 1999 -006 <br />INSPECTOR'S INITIALS: MAC <br />INSPECTION DATE: July 6, 2011 <br />Page 2 of 3 <br />