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OBSERVATIONS <br />PERMIT #: M- 2004 -022 <br />INSPECTOR'S INITIALS: PSH <br />INSPECTION DATE: June 6, 2012 <br />The Raindance Sand and Gravel Mine was inspected by Peter Hays and TC Wait with the Division of <br />Reclamation, Mining and Safety (Division) as required by the Transfer of Permit and Succession of Operators <br />process and Rule 1.12. Mr. John Solheim and Raymond DeCroce with Alpine Demolition, Inc. and Mr. Cody <br />Wooldridge with Water Valley were present during the inspection. The site was previously inspected by the <br />Division on August 20, 2008. <br />On March 1, 2012, Alpine Demolition submitted a Transfer of Permit and Succession of Operators Application <br />Form (SO -01) and selected Option B. By selecting Option B, Alpine Demolition choose to not <br />waive their right to a 30 -day processing period and was required to submit a replacement Financial Warranty <br />for the same dollar amount maintained by the current Operator ($28,000.00). On March 16, 2012, the <br />application was deemed complete following the submittal of the required annual report and fee. The Division <br />approved the Transfer of Permit and Succession of Operators for the Raindance Sand and Gravel Mine on April <br />16, 2012. Alpine Demolition is now the permitted operator of the site and Hilltop Aquatic Investments, LLC <br />has been released 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 (June 15, 2012). The Division currently holds a reclamation bond in the amount of <br />$28,000.00, which is adequate to reclaim the site based on this inspection. <br />Hydrologic Balance: <br />The pit has been reclaimed as a clay lined reservoir and the liner was approved by the Colorado Division of <br />Water Resources on March 10, 2008. <br />Gen. Compliance With Mine Plan: <br />Mining activities ended at the site ended in 2009 according to the annual reports submitted by the previous <br />Operator. Alpine Demolition plans to use the site as a processing and stockpile area for the concrete and <br />asphalt being removed from the Kodak plant located nearby in Winsor, CO. The recycling process is expected <br />to take 12 month to complete. Approximately, 100,000 cubic yards of concrete and asphalt were observed <br />during the inspection. Alpine expects an additional 25,000 cubic yards of material to be import to the site. <br />The Raindance Mine site was unchanged since the last inspection other than the imported material stockpiles. <br />As indicated in the previous inspection report, little to no native grasses are established and the majority of <br />the site is covered by annual and noxious weeds. Canada thistle, diffuse knapweed, field bind weed, cheat <br />grass and kochia were observed during the inspection. The Operator will need to implement the approved <br />weed control plan for the site to control the spread of noxious and annual weeds. <br />The pump structure located in the northeast corner of the reservoir, two of the trailers and the material <br />stockpiles noted in the previous inspection report remain at the site. The scale house, trucks and construction <br />equipment have been removed from the site. <br />During the inspection, the possibility of leaving the two trailers and altering the approved reclamation plan <br />was discussed. One trailer is used by Water Valley for the operation of the reservoir and the other is used by a <br />fishing guide company. Water Valley may also need a small storage area at the site. The Operator will need to <br />Page 2 of 5 <br />