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OBSERVATIONS <br />PERMIT #: M- 2004 -043 <br />INSPECTOR'S INITIALS: JLE <br />INSPECTION DATE: July 26, 2011 <br />This was a surety related monitoring inspection of the Valco T. Pit; DRMS file no. M- 2004 -043 operated by <br />Venable's Construction, Inc. This site is located 6 miles northeast of Trinidad, Colorado in Las Animas County. <br />I, Jared Ebert of the Colorado Division of Reclamation, Mining and Safety conducted the inspection. Mr. Mike <br />Venable of Venable's Construction, Inc. was aware of the inspection but no one from the operation attended. <br />This site was previously inspected on October 7, 2008. Based on a phone conversation with Mr. Mike Venable <br />prior to the inspection, little to no activity has occurred since the previous inspection. The primary purpose of <br />this inspection was to ascertain if the current amount of Financial Warranty required for the site is adequate. <br />On July 16, 2011 the surety held for the site had cancelled and was not renewed or replaced by the Operator. <br />An enforcement hearing for a possible violation has been scheduled during the August 10 and 11, 2011 Mined <br />Land Reclamation Board meeting in regards to this issue. <br />A GPS survey of the current site disturbance was conducted using a Trimble GeoXT GPS unit. A map of the <br />Division's findings is enclosed with this report. Approximately 6.2 acres of land has been affected by the <br />operation. Topsoil has been stripped from the affected area and placed in two large stockpiles in the <br />northeast portion of the affected land. Also, a small berm of topsoil approximately 3 feet in height with 1:1 <br />side slopes has been constructed around the excavation. A 15 to 20 foot highwall exists at the site with near <br />vertical side slopes along the western and southern boundary. A smaller 15 foot highwall with 1:1 slopes is in <br />place along the southeast portion of the affected land. A large stockpile of mined material is in place in the <br />center of the excavation. <br />Based on the level of disturbance at the site, the current amount of Financial Warranty required ($48,000) <br />appears to be adequate to conduct reclamation in accordance with the approved reclamation plan. <br />Page 2 of 5 <br />