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August 22, 2011 <br />15448MONADNOCK MINERAL SERVICES <br />Professional Geologists / Land Surveyors <br />P.O. Box 85 -342 7 Ave. <br />Ouray, CO 81427 <br />Phone (970) 325 -4600 <br />Fax (970) 325 -4384 <br />Division of Reclamation, Mining & Safety <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />RE: Permit No. M -91 -146 <br />Operation Name: SAKO Pit (formerly ZMK Gravel Pit) <br />Anniversary Date: August 27 <br />Dear Sirs: <br />The enclosed is to satisfy the Annual Report requirements for the Permit No. <br />M -91 -146 for the ZMK Gravel Pit. <br />ANNUAL REPORT INCLUSIONS 1.15(1) <br />110(2) Annual Report Form <br />Topographic Plan Map showing 6.99 acres of area that was disturbed this past <br />year. <br />ANNUAL REPORT INCLUSIONS 1.15(1) (A) <br />The Financial Warranty $3750 is in affect as of this date. <br />ANNUAL REPORT INCLUSIONS 1.15(1) (C) <br />Monthly Water Well measurements as requested in stipulation No. 03 of the <br />Permit No. M -91 -146 are attached. <br />ANNUAL REPORT INCLUSIONS 1.15(3) <br />The estimated material extraction for this annual report is 27,648 tons. This is all <br />of the material extracted. <br />TECHNICAL REVISIONS: <br />1. Baseline Channel Geometry Data is shown on the attached River Channel <br />Profiles Map. Location of the profiles is shown on the enclosed Topographic Plan Map. <br />