2012-06-15_INSPECTION - M1999021

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OBSERVATIONS PERMIT #: M -1999 -021 INSPECTOR'S INITIALS: MAC INSPECTION DATE: May 31, 2012 The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety (Division). Dick von Bernuth was also present on behalf of Trollco, Inc. The Stegner Farms site is located one half mile southeast of LaPorte, Colorado. The site is permitted for 80 acres and the post- mining land use is developed water resource. On May 15, 2012, the Division approved a Succession of Operators which transferred the Reclamation Permit from Aggregate Industries - WCR, Inc. to Trollco, Inc. The successor operator chose not waive their right to a 30 day processing period and submitted a replacement financial warranty in the amount of $65,000.00. The purpose of this inspection is to determine whether the financial warranty remains adequate to complete reclamation at the Stegner Farms site. Financial Warranty: As noted earlier in the report, the Division holds a financial warranty in the amount of $65,000. As part of this inspection, the Division evaluated the adequacy of the financial warranty. The financial warranty was last evaluated in 2010. Based on the observations made during this inspection the reclamation tasks required to complete reclamation at the site have not changed since 2010. The Division completed a full bond calculation and found that $65,000 remains and adequate amount to complete reclamation of the Stegner Farms site. Hydrologic Balance: Upon the completion of reclamation, the site will contain a single reservoir. The Operator installed a slurry wall around the pit in 2000. The slurry wall passed the leak test in 2009 and has been certified as meeting the design standards of the Office of the State Engineer. The Division approved the construction of a perimeter drain, which was installed around the slurry wall in 2005. During the inspection the Division observed water entering the pit through a 4" HDPE pipe located at the southwest corner of the site. The pipe was discharging groundwater at a rate of approximately 60 gpm. According to the Operator, the water entering the pit is groundwater which was intercepted by the perimeter drain and diverted into the pit through a valve placed into the southwest corner of the drain. There was standing water throughout the pit ranging from several inches in depth to several feet. A review of the permit file found that the Operator no longer has a valid temporary substitute water supply plan or well permit. In addition, the Division does not have a record that the Operator has the necessary water rights to divert groundwater into the pit. The design details for the perimeter drain, which were approved under Technical Revision No. 4, did not include the valve which was installed at the southwest corner of the perimeter drain. The diversion of groundwater into the pit has been cited as a problem and will require corrective action by the Operator; please see the first page of this report for additional information. Gen. Compliance With Mine Plan: The site was inactive at the time of the inspection. According to the Operator, product has been removed from the stockpiles periodically over the past several months. If the Operator plans to, or does, temporarily cease production of the mining operation for one hundred eighty (180) days or more, the Operator must file a Notice of Temporary Cessation in writing per Rule 1.13.5(1). Page 3 of 6