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OBSERVATIONS <br />This was a normal monitoring inspection conducted by TC Wait of DRMS. Mr. Brent White and Mr. Darren <br />Garcia from Otero County represented the Operator during the site visit. The site is located about 5.6 miles <br />southwest of Rocky Ford. Post -mine land use for this site is rangeland. The permit area is approximately 724 <br />acres with 366 acres of disturbed area allowed. About 15 acres of the permit appears to have been mined at <br />this point. <br />At the time of the inspection, the site was dry and accessed by vehicle and foot. There was no ponding in the <br />pit. The permit sign was posted, and the permit boundaries were marked. All mining activity appears to be <br />within the marked boundaries. <br />The Mendenhall pit is currently active and no reclamation work has begun. Topsoil will be imported to the <br />site. <br />Availability Of Records: <br />All records are up to date. <br />Acid And Toxic Materials: <br />Fuel tank was confined in a tub for secondary containment. No other source of toxic material was noted. <br />Backfilling and Grading: <br />Site is generally graded to a 3:1 or flatter slope. Active highwall in western part of Phase I is about 12 -15 ft <br />high. <br />Hydrologic Balance: <br />The site is dry. No evidence of groundwater was observed. <br />Roads: <br />Access road was in good condition. <br />Reclamation Success: <br />No reclamation has begun at this point. <br />Revegetation: <br />No revegetation has taken place, although some vegetation is establishing on its own. <br />Sediment Control: <br />Sediment appears to be contained in the active area of the mine. <br />PERMIT #: M- 2004 -027 <br />INSPECTOR'S INITIALS: TCW <br />INSPECTION DATE: August 27, 2012 <br />Gen. Compliance With Mine Plan: <br />Phase I area currently being worked. Average is approximately 200 loads per year; about 30 loads so far this <br />year. Stockpiles of fines (10k cubic yards), chips (600 cubic yards), and dirt (5k cubic yards) on site. <br />Page 2 of 5 <br />