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This was a surety reduction inspection and a pre - operational inspection regarding pending Amendment AM- <br />03, conducted by Tom Kaldenbach of DRMS. The mine operator was represented by John Hamrick of Cotter <br />Corporation. The ground was dry in most areas and all of the site was accessible. <br />Surety Reduction Requests SR -04 and SR -05 <br />The surety reduction inspection was conducted in response to the mine operator's reduction requests SR -04 <br />and SR -05. DRMS received the SR -04 request on February 17, 2012 and the SR -05 request on March 8, 2012. <br />DRMS provided notice to the land owner of the affected land and the county in accordance with Rule <br />4.17.2(1). As of May 24, 2012, the operator has not provided the proof of publication for its newspaper <br />notice, as required by Rule 7.2.10(2)(d). <br />SR -04 requests reduction of required financial warranty (bond) in the amount of $134,583 for: <br />1) Construction of Sump 1 (approved in TR -13) and <br />2) Construction of Sumps 5,8,9, and 10 (approved in TR -15). <br />SR -05 requests reduction of required bond of $278,635 for work approved in TR -12, comprised of: <br />1) Purchase water treatment system equipment (bond $187,400), <br />2) Mobilization and installation of the equipment (bond $81,170), and <br />3) Operation and maintenance of treatment plant for first eight weeks (bond $10,065). <br />Amendment AM -03 <br />The pre - operational inspection was conducted by DRMS in response to the application for Amendment 3 (AM- <br />03). In the AM -03 application, the mine operator proposes to affect 14.83 acres of land, consisting of 3.00 <br />acres in the bottom of the Ralston Creek valley (Tracts Al through A4) and 11.83 acres on the mountain south <br />of the valley (Tracts A5 through A7). The valley Tracts will be disturbed during construction of a diversion <br />pipeline; the mountain Tracts will be disturbed during the drilling of monitoring wells. <br />Support Facilities On -site: <br />Facilities in SR -04 Bond Reduction Request <br />OBSERVATIONS <br />PERMIT #: M- 1977 -300 <br />INSPECTOR'S INITIALS: TAK <br />INSPECTION DATE: April 17, 2012 <br />Sumps 5, 8, 9, and 10 were constructed (or reconstructed) in 2010. As described in a letter from the operator <br />to DRMS, dated 10/11/11, the main components of Sumps 5, 8, and 10 are: a vertical borehole or manhole <br />with a diameter between 6 inches and 3 feet and a depth as much as 30 feet, with a surface riser culvert, a <br />catchment underdrain with PVC piping, a pump, a PVC pipe that connects each sump to the treatment system, <br />and an electric control panel. Sump 9 is a dewatering trench containing a pump and pipe, located between <br />the concrete ponds and the treatment plant. <br />Although the subsurface components of the sumps are not readily seen, the surface equipment and some of <br />the subsurface equipment of the Sumps 5, 8, 9, and 10 have been seen on various DRMS inspections, including <br />the current inspection. Construction of some of the sumps was also witnessed during DRMS inspections. <br />Page 2 of 8 <br />