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OBSERVATIONS <br />PERMIT #: M- 2002 -120 <br />INSPECTOR'S INITIALS: ECS <br />INSPECTION DATE: June 27, 2012 <br />This was a Succession of Operator (SO) inspection conducted by DRMS at the Hall Irwin Bernhardt Resource <br />site. There are 286.14 acres currently permitted at this 112c site. The inspection was conducted by Eric Scott <br />of DRMS. The DRMS representative traveled to the site with permittee representative Mark Johnson of <br />Bestway Concrete at approximately 1000. DRMS noted that no mining activity was taking place according to <br />the approved mining plan at the time of the inspection; however, an area of ponded water was in the process of <br />being backfilled. The only issue noted during the inspection that will require immediate attention was the <br />presence of Tamarisk along the shorelines of the water bodies. Tamarisk is a listed noxious species and will <br />need to be eliminated from the permit area. <br />On May 18, 2012 an SO was requested by the permittee to change the name of the permittee from Hall Irwin <br />Corporation to Bestway Concrete Company. Option B was chosen, and a bond of the same amount was <br />supposed to be submitted by the new operator, however the replacement bond has not yet been provided. On <br />June 27, 2012 DRMS conducted an inspection of the site and confirmed that no bond increase was required, <br />however, the SO will not be final until a replacement bond for the previous bond amount is provided by the <br />"new" permittee — Bestway Concrete Company. <br />Please contact DRMS minerals group bonding specialist Barbara Coria at 303 - 866 -3567 x8148 with any <br />bonding questions. It is possible that the requirement for the "new" bond may be satisfied with a name - change <br />rider from the current bonding company for the existing bond. <br />Please also be aware that this permit was a "stipulated" approval by DRMS and that there are conditions still <br />outstanding that will need to be complied with as mining progresses. These conditions include: <br />Stipulation 3 which states "The operator shall not mine outside the Pod 1 until they prove to the satisfaction of <br />the Division of Minerals and Geology that their mine plan has clearance through the U.S. Fish and Wildlife <br />Service" (due to concerns about Preebles Jumping Mouse Habitat and; <br />Stipulation 4 for mining within 200 feet of the river which states "The presence of any mined slopes, graded <br />slopes and/or backfilled slopes at the Bernhardt Resource site that are steeper than 5:1 and within 200 feet of the <br />river during the period between April 1 and October 1 would be a violation of mined land reclamation permit <br />M2002 -120 ". <br />DRMS therefore strongly encourages the permittee to thoroughly review the site file and become familiar with <br />all permit requirements before full scale mining resumes to avoid any inadvertent violations of the permit. <br />Page 2 of 3 <br />