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OBSERVATIONS <br />PERMIT #: M- 1977 -129 <br />INSPECTOR'S INITIALS: THM <br />INSPECTION DATE: January 26, 2012 <br />This inspection was conducted as part of the normal monitoring program established by the Colorado Division <br />of Reclamation, Mining and Safety. The Pit 500 is located off of Highway 141 approximately 0.5 miles south <br />of Whitewater, Colorado. The Pit 500 is a multi phase operation that consists of two separate locations that are <br />divided by the Gunnison River. The purpose of the January 26, 2012 inspection was to assess the success of the <br />reclamation work conducted in Stage 2 — Part B and observe the area recently permitted by Oldcastle SW, Inc. <br />which overlaps a portion of the Pit 500 area, specifically Phases H, G, B, A, C, D, E and F, Whitewater <br />requested release of the overlapped 61.95 acres. Mark Gardner with an associate from Whitewater Building <br />Materials Corp. along with Jason Burkey and Brent Kerr of Oldcastle SW, Inc. were all present during the <br />inspection. <br />The mine identification sign and the affected area boundary markers are in place and in compliance with rule <br />3.1.12. The signs are located on a post at the main entrance to both locations. The permit boundaries are <br />comprised of fences, posts and geological barriers that are easily identifiable. <br />The area requested for release due to being overlapped by Oldcastle's permit was approved January 30, 2012. <br />Stage 2 — Part B — The erosion below the inlet features has been repaired by placing fill material in the void and <br />then placing matting covered by rip rap. The repairs appear to be adequate and will likely provide the necessary <br />stability required. <br />This inspection was focused primarily on the acreage release request and other components of the mining <br />operation were not formally addressed during the inspection. <br />Photos that show the conditions observed during the January 26, 2012 inspection are included at the end of this <br />report. <br />Responses to this inspection report should be directed to Travis Marshall at the Division of Reclamation, <br />Mining and Safety, Grand Junction Field Office, 101 South 3` Street, Room 301, Grand Junction, Colorado <br />81501, phone no. 970 - 241.2042. <br />Page 2 of 4 <br />