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OBSERVATIONS <br />PERMIT #: M- 2011 -001 <br />INSPECTOR'S INITIALS: PSH <br />INSPECTION DATE: March 23, 2012 <br />The Iverson Mine, File No. M- 2011 -001, was inspected by Peter Hays with the Division of Reclamation, Mining <br />and Safety (Division) as required by the Transfer of Approved Mineral Application and Succession of Operators <br />process and Rule 1.12. Mrs. Julie Mikulas with Martin Marietta Materials, Inc. was present during the <br />inspection. The site was previously inspected by the Division on March 22, 2011. <br />On January 3, 2012, Martin Marietta submitted a Transfer of Permit and Succession of Operators Application <br />Form (50 -01) and selected Option B. By selecting Option B, Martin Marietta choose to not waive their right to <br />a 30 -day processing period and was required to submit a replacement Financial Warranty for the same dollar <br />amount maintained by the current Operator ($233,400.00). On February 1, 2012, the application was deemed <br />complete following the submittal of the required Transfer of Approved Mineral Application form and <br />appropriate financial and performance warranties. The Division approved the Transfer of the Approved <br />Mineral Application and Succession of Operators for the Iverson Mine on February, 27, 2012. Martin Marietta <br />is now the permitted Operator of the Iverson Mine and Lafarge West, Inc. has been released from reclamation <br />responsibility at the site. <br />Financial Warranty: <br />The Division is required to recalculate the required reclamation bond within 60 -days from the date of the <br />transfer is completed (April 27, 2012). The Division currently holds a reclamation bond in the amount of <br />$233,400.00. <br />The Division updated the original 112c permit application bond calculation to reflect current equipment and <br />labor costs. The revised financial warranty amount is $275,300.00, which is an increase of $41,900.00. The <br />Division will notify Martin Marietta of the financial warranty increase and provide a copy of the Division's <br />calculations under separate cover. Martin Marietta will have 60 -days from the date of the letter to submit the <br />addition bond amount per Rule 4.2. <br />Hydrologic Balance: <br />During the permitting process, the previous Operator (Lafarge) agreed to provide the Division with <br />documentation from the Office of the State Engineer (SEO) demonstrating the Operator and /or landowner <br />owns sufficient water shares to cover the long -term evaporative losses from the exposed groundwater and <br />the shares have been committed to the SEO. If this approach has changed with the transfer of the permit to <br />Martin Marietta, the Operator will need to comply with another option in the Division's letter dated April 30, <br />2010 addressing operations with exposed groundwater prior to exposing groundwater at the site. Martin <br />Marietta stated during the inspection a well permit and substitute water supply plan will be obtained prior to <br />groundwater exposure. <br />Gen. Compliance With Mine Plan: <br />Mining activity has commence in the southeast corner of the site. A 10 -acre area was stripped of topsoil and <br />overburden and the material was stockpiled on the south side of the property in the appropriate areas. <br />The approved mining permit states the previous Operator (Lafarge) would mine through the wetland area on <br />the east edge of the mining cell. Martin Marietta decided to preserve the wetlands and mine around the area. <br />The change in the approved Mining and Reclamation Plans will need to be address by the submittal of a <br />technical revision in the future. The approved 100 and 200 foot offsets from the Cache La Poudre river were <br />Page 2 of 4 <br />