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OBSERVATIONS <br />PERMIT #: M- 1979 - 094 -HR <br />INSPECTOR'S INITIALS: GRM <br />INSPECTION DATE: September 15, 2011 <br />This inspection is part of the normal inspection schedule for Designated Mining Operations by the Colorado Division of <br />Reclamation, Mining, and Safety (Division). The 1D -7 open pit mine is a 112d -3 permit located on the south side of <br />Paradox Valley, west of County Road DD -19, in Montrose County. Glen Williams, Cotter's representative, accompanied <br />the inspector on site. <br />An Environmental Protection Plan submittal notification has been sent out for this site with specific dates for <br />compliance. Therefore this inspection is only noting current site conditions and immediate problems. The permit <br />history indicates no mining activities for this area have ever occurred. The Division is reviewing its position and policy <br />regard Intermittent Status and Temporary Cessation. Cotter is advised that a change in status for this permit is likely <br />and should review timelines for mining and reclamation. <br />The mine identification sign and affected area boundary markers are in place and in compliance with Rule 3.1.12. The <br />sign is located on the gate at the entrance to the site. Permit boundaries were observed as t- posts. <br />There is a maintenance / mine dry steel building located near the entrance to the site. No equipment or other support <br />materials were noted outside in this area. <br />The waste dump has slopes that are 2:1 or natural angle of repose. Natural vegetation is coming in. Sagebrush, rabbit <br />brush, and some four - winged saltbush were observed as well as native grasses. <br />The pit floor has substantial native growth which helps control erosion and sedimentation. All drainage is directed to a <br />collection ditch with a retention basin. The basin was observed holding water. Mr. Williams noted that even with all the <br />rain, there has been no indication of stormwater leaving the site. <br />No issues or problems are cited at this time. A review of the financial warranty will be undertaken when the EPP process <br />is completed. The Division is recommending to Cotter the consolidation of the JD -7 underground and open -pit permits <br />(M- 1977 -308) into one permit with one 112d -3 with a single EPP plan and financial warranty. <br />Responses to this inspection report should be directed to Russ Means at the Division of Reclamation, Mining, and Safety, <br />Grand Junction Field Office, 101 South 3rd Street, Room 301, Grand Junction, Colorado 81501, phone no. 970 - 241 -1117. <br />Inspection Contact Address <br />Glenn Williams <br />Cotter Corporation <br />P.O. Box 700 <br />Nucla, CO 81424 <br />Page 2 of 2 <br />