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PERMIT #: M- 2008 -006 <br />INSPECTOR'S INITIALS: MAC <br />INSPECTION DATE: August 31, 2012 <br />OBSERVATIONS <br />The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety <br />(Division). Larry Johnson, Mike Duster and Brandon Martin of Connell Resources were also present for the <br />inspection. The SerFer Pit is located approximately 2 miles west of the Town of Windsor on the SW corner of <br />Highway 392 and County Road 13. The total permitted area encompasses 45 acres of which 30 acres are <br />designated as affected area. <br />Gen. Compliance With Mine Plan: <br />The site was not active at the time of the inspection. The Operator indicated 3 to 4 months have elapsed since <br />active mining operations last occurred; however, the Operator removes material from on site product <br />stockpiles on a regular basis. The Division informed the Operator that if there is no mining activity, including <br />removal of stockpiled material, for 180 days or more, then a Notice of Temporary Cessation would need to be <br />filed with the Division. <br />Mining of the SerFer Pit commenced in the south and is proceeding to the north. The Operator has maintained <br />a 100 ft. setback from the top bank of the Cache La Poudre River. The active mining face is approximately 400 <br />ft. in length; the Operator is allowed to have a mining face that is 1,200 ft. in length. The Division observed <br />aggregate stockpiles within the pit as well as in the southeast corner of the site near the scale. A dewatering <br />trench has been constructed around the base of the pit wall; groundwater is directed towards the southeast <br />corner of the pit where it is pumped into two settling ponds before being discharged to the Cache La Poudre <br />River. Groundwater was not being pumped out of the pit at the time of the inspection. <br />Hydrologic Balance: <br />The Operator has a valid well permit and temporary substitute water supply plan which expires on March 31, <br />2013. The only groundwater exposed within in the pit is located in the dewatering trenches. <br />The approved groundwater monitoring plan for the SerFer Pit states that 'during mining and dewatering <br />activities, the piezometers will be monitored for groundwater elevation once per month'. In addition, the plan <br />states 'monitoring data will be provided to the Division of Reclamation, Mining and Safety in annual reports'. A <br />review of past annual reports has found that the Operator has not provided the Division with any of the <br />required groundwater monitoring data. This has been cited as a problem and will require corrective action by <br />the Operator; please see the first page of this report for additional information. Please note that the <br />continued failure to submit groundwater monitoring data could be escalated to a possible violation. <br />Financial Warranty: <br />The Division holds a financial warranty in the amount of $328,455.00, which remains sufficient to complete <br />reclamation at the site. <br />Signs and Markers: <br />The permit sign was posted at the site entrance and the boundary of the affected area was clearly delineated <br />as required by Rule 3.1.12. <br />This concluded the inspection. <br />Page 2 of 4 <br />