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July 28, 2011 C- 1981- 008/New Horizon Mine MLT <br />x 20' grid using a GPS. A topographic map was then generated from the data points. The map <br />showed that all areas appear to have positive drainage, with no depressions. <br />The Burbridge parcel (with the exception of Pond 008) was granted Phase 11 bond release under <br />SL -11 in June 2009. WFC plans to re -grade the collection ditch along the southern side of the <br />parcel later this year. Mr. Gubka said that would help to eliminate some areas that do not <br />currently drain completely. <br />REVEGETATION — Rule 4.15 <br />Vegetative Cover; Timing: <br />At the Irrigated Pasture (IP) Reference Area, the zone treated for Quackgrass in 2010 continues <br />to be excluded from sampling. The area was seeded with the IP seed mix and a cover crop of <br />oats (35# per acre, per Tom Fry) last year, and mowed once earlier this season. The oats have <br />grown well (Photo 2), and are accompanied by an assemblage of annual weeds, including <br />Lamb's quarter, Buffalo burr, Curly dock, Kochia, and Chicory. A few isolated Quackgrass <br />plants were also observed. It is likely that seeds for all of these species were already present in <br />the soil, and have taken advantage of the tilling and subsequent irrigation. <br />• Mr. Gubka said that no cattle were available at this time to graze the IP reference area to <br />simulate haying (as per the permit), so WFC had begun mowing the field, instead (Photo 3). <br />Due to the rough terrain (furrows, etc.), a "brush hog" was deemed to be the preferred type of <br />equipment. The permit does not currently allow for mowing of the IP reference area. <br />We traversed a portion of the IP reclamation on foot, observing revegetation on the Benson - <br />South (now owned by Staats) and San Miguel Power Association (SMPA) parcels (Photo 4). A <br />number of hay bales were scattered across the Benson -S field (Photo 5); Mr. Gubka said that <br />Staats had done the haying and baling, but had not yet picked up all of the bales, which have <br />now been rained upon. Due to the presence of the bales, this parcel has not been irrigated since <br />the hay was cut. <br />• The Benson -S and SMPA fields still retain a portion of alfalfa, but the percentage of grasses is <br />expected to continue to increase with each year. <br />Sideroll sprinklers were in operation on the Burbridge parcel and on the portion of the SMPA <br />parcel west of San Miguel Draw. <br />SPECIAL CATEGORIES OF MINING — Rules 4.22 through 4.27: <br />Prime Farmlands - Rule 4.25 <br />• Tom Fry was observed spraying weeds on the slopes of the "Mixed" topsoil stockpiles using a <br />sprayer and hose attached to a tank mounted on a tractor owned and operated by Mike Morgan. <br />• A number of annual weeds ( Kochia and Russian thistle) have grown on topsoil previously <br />spread across "Zone 1 ". Mr. Gubka said that these weeds would be sprayed, also. <br />There is almost nothing growing on the "Lift B" subsoil stockpile (Photo 6), and very little <br />growth on the "Lift A" topsoil stockpile, despite the hydro - seeding applied in 2009 and <br />broadcast seeding conducted earlier in 2011. We observed that Barx soil becomes truly <br />productive only when irrigated. <br />Number of Partial Inspection this Fiscal Year: 1 <br />Number of Complete Inspections this Fiscal Year: 0 Page 3 of 7 <br />