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This inspection was conducted by Tom Kaldenbach of DRMS. Chris Garrison, the prospector, was on -site. <br />Marcia Rose - Richey represented the U.S. Forest Service. The prospect is located on Forest Service land. <br />The ground was dry. <br />OBSERVATIONS <br />PERMIT #: PF.Id <br />INSPECTOR'S INITIALS: TAK <br />INSPECTION DATE: June 7, 2012 <br />DRMS recently approved NOI Modification 1 (MD -01) for this NOI. Work on this NOI that was performed prior <br />to MD -01 (a shaft, trenches, and a pit) was called Golddigger I. Work performed under MD-01 (drillholes) is <br />called Golddigger II. <br />Two of the Prospector's associates were suction dredging the Beaver Creek and running the material through <br />a trommel which discharged into the creek. <br />Backfilling & Grading: <br />With the exception of the pit (trench) located east of Beaver Creek, the shaft and trenches of Golddigger I <br />have been backfilled and are barely discernible on the ground. The Prospector's diligence in backfilling these <br />areas is highly commendable. The pit (located east of Beaver Creek) remains open, as the Prospector is <br />considering more work in this area. The prospector described a plan to access the pit from a pre- existing two - <br />track road located uphill from the pit. If the Forest Service approves the use of the two -track road, and the <br />road is not significantly upgraded, then the road could be used without modifying the NOI (see Hard Rock and <br />Metal Mining Rule 5.3.1(c)). <br />As required by Rule 5.4.1(3), final abandonment reports will need to be submitted for the holes drilled under <br />Golddigger II (MD -01). The reports must document the holes were abandoned in accordance with Rule 5.4. <br />Gen. Compliance With Mine Plan: <br />Trenching, drilling, and suction dredging appears to have been conducted as described in the NOI, MD -01, and <br />the 2011 Annual Report. <br />The possibility of excavating a trench in the area of a historical spring west of Beaver Creek was discussed <br />during the inspection. Work in this area would require a modification of the NOI before proceeding. The status <br />of water rights of the spring could be researched in the online database of the Colorado Division of Water <br />Resources. <br />Page 2 of 7 <br />