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PERMIT #: M -1978- 222 -UG <br />INSPECTOR'S INITIALS: GRM <br />INSPECTION DATE: November 2, 2011 <br />Drilling has occurred per the approved mine plans around the surface pit mine area. The exact number of <br />holes was not noted by the operator's representative however the plan notes up to 300 holes may be drilled <br />eventually. The operator has graded pre- existing historical access roads and drilling has occurred in picket <br />lines within the roads themselves. Most of the holes visited are temporarily plugged until they can be probed. <br />Some minor riling on the roads was observed. The extent of erosion was minor but the operator is cautioned <br />to monitor for greater impacts. Measures to control erosion are advised such as bar ditches, berms and other <br />water energy abating measures until reclamation can be commenced. <br />3 metal storage units, two fuel tanks in secondary containments, and several pieces of mobile equipment <br />were observed on site. No evidence of oil or fuel leaks was noted. There is no unnecessary debris or trash <br />located at the site. As noted above no uranium ore has been produced nor waste rock generated at this point. <br />Topsoil is limited and has been stockpiled at the edge of the staging area. Natural vegetation has established <br />to prevent erosion. Some juniper and cedar snag has been piled up at the edge of the disturbance that can be <br />used in reclamation or as erosion control. <br />The Division holds a $46,450.00 reclamation bond that was calculated in 2009. The current conditions are less <br />than anticipated so the Financial Warranty is adequate at this time. <br />The Division is reviewing the requirements for Intermittent Status (IS) and Temporary Cessation (TC) for all <br />mining operations. The drilling project is part of the approved mining plans. Nuvemco needs to be clear as to <br />the nature of the drilling so the Division can determine whether the activities are exploration or ore body <br />development. A separate letter covering the subject of TC and IS will be forthcoming so it is not being <br />addressed within this inspection report. <br />Overall the mine is meeting the requirements of the approved mine, reclamation, and EPP plans unless <br />otherwise noted or observed. <br />Responses to this inspection report should be directed to Russ Means at the Division of Reclamation, Mining, <br />and Safety, Grand Junction Field Office, 101 South 3rd Street, Room 301, Grand Junction, Colorado 81501, <br />phone no. 970 - 241 -1117. <br />Inspection Contact Address <br />Paul Szilagyi <br />Nuvemco, LLC <br />650 Linden Ave. <br />Boulder, Colorado 80303 <br />Mick Carter <br />Nuvemco, LLC <br />10771 -3200 Road <br />Hotchkiss, CO 81419 <br />Page 3 of 4 <br />