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OBSERVATIONS <br />PERMIT #: M- 2003 -091 <br />INSPECTOR'S INITIALS: PSH <br />INSPECTION DATE: March 20, 2012 <br />The Duckworth Pit, File No. M- 2003 -091, was inspected by Peter Hays with the Division of Reclamation, <br />Mining and Safety (Division) as required by the Transfer of Permit and Succession of Operators process and <br />Rule 1.12. Mrs. Julie Mikulas with Martin Marietta was present during the inspection. The site was previously <br />inspected by the Division on October 6, 2011. <br />On January 3, 2012, Martin Marietta submitted a Transfer of Permit and Succession of Operators Application <br />Form (SO -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 ($408,000.00). On February 1, 2012, the application was deemed <br />complete following the submittal of the appropriate financial and performance warranties. The Division <br />approved the Transfer of Permit and Succession of Operators for the Duckworth Pit on February, 15, 2012. <br />Martin Marietta is now the permitted operator of the Duckworth Pit and Lafarge West, Inc. has been released <br />from reclamation 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 15, 2012). The Division currently holds a reclamation bond in the amount of <br />$408,000.00. <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 $616,000.00, which is an increase of $208,000.00. 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 />The long -term groundwater augmentation plan for the site has not been address by the Operator. The <br />Operator will need to comply with the Division's letter dated April 30, 2010 addressing operations with <br />exposed groundwater prior to exposing groundwater at the site. Additionally, a well permit and substitute <br />water supply plan will need to be approved prior to groundwater exposure. Martin Marietta indicated their <br />water engineer, Bishop - Brogden Associates, Inc. was aware of the groundwater compliance requirements at <br />the site. <br />Gen. Compliance With Mine Plan: <br />The Duckworth site was unchanged since the last inspection. As indicated in the previous inspection report, <br />mining activities have begun at the site. The southern portion of Phase 1 has been stripped of topsoil and <br />overburden. The topsoil and overburden are stored in a visual berm along WCR 20 % and in two scraper piles <br />in the northern section of Phase 1. Extraction of sand and gravel is scheduled to start in 2012 following the <br />construction of the conveyor structure connecting the site to the processing area in the Cottonwood Pit. <br />The required fifty (50) foot offset from Idaho Creek was marked with wood stake along the east side of the <br />creek in mining phase 1. A permit sign was posted at the southwest corner of the site at the future site <br />entrance and the permit boundaries were defined by fence on all sides in accordance with Rule 3.1.12. <br />Page 2 of 4 <br />