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DIVISION OF RECLAMATION, MINING and SAFETY <br />1313 SHERMAN STREET, ROOM 215 <br />DENVER, COLORADO 80203 <br />DATE: September 22, 2011 <br />RE: ANNUAL REPORT <br />PERMITEE NAME: KAGAN & SON, LLC <br />PERMIT NO: M- 1994 -114 <br />OPERATION NAME: KAGAN & SON SOUTH PIT <br />ANNIVERSARY DATE: 5- Oct -11 <br />ANNUAL FEE DUE: $323.00 <br />COUNTY: CUSTER <br />Gentlemen: <br />Attached is a check in the amount of $323.00 for the annual fee for the preceding year. <br />Mining has been occurring this year and will continue for the foreseeable future. The <br />disturbance area increased the surface disturbance by approximately 1/2 acre therefore <br />the is now approximately 3.75 acres and the mining will go to the south next year. <br />This pit is a long -term resource that will be in production for many years. This is an <br />active pit. Please see map for details. <br />Sincerely, <br />Andrew Kagan <br />Managing Member <br />cc: Fremont County <br />LJ Development, Inc. <br />KAGAN & SON, LLC. <br />555 Ernest Avenue <br />Westcliffe, CO 81252 <br />(719) 783 -9636 FAX (719) 783 -3039 <br />