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OBSERVATIONS <br />PERMIT #: M -1977 -344 <br />INSPECTOR'S INITIALS: TC1 <br />INSPECTION DATE: June 4, 2012 <br />This inspection was conducted as part of the regular monitoring program. The Operator was represented by Joe <br />Lamanna (quarry manager) and Justin Andrews (environmental manager). The Portland Limestone Quarry is <br />located approximately five miles east of Florence, CO off State Hwy 120. <br />Inspection: <br />The mine entrance signs did not include the mine reclamation permit ID number, nor a statement that a <br />reclamation permit for the operation has been issued by the Colorado Mined Land Reclamation Board. The site <br />entrance was gated and boundaries are fenced (see Photos 1 and 2). <br />The site was active at the time of inspection. Reclamation activity is proceeding from the south end towards the <br />north end. Seepage was observed form the east face of the high wall, resulting in shallow pools in the bottom of <br />the pit (see Photo 3). Mr. Lamanna explained this water drains out of the pit through the "Smoky Hill" backfill <br />material in the south end of the pit (see Photo 4). <br />A pit blast was observed during the inspection. Holcim is using electronic delay in blasting to reduce the <br />seismic impact to adjacent landowners. <br />Mr. Lamanna discussed releasing the north end of the mine permit area as a gasline runs through this portion of <br />the operation. <br />The highwalls appear to be adequately benched, although some tension cracking was observed at the crest of the <br />north highwall (see Photo 5). <br />Overburden is being stripped ahead of pit development. The golden shale is stockpiled for later use as growth <br />media (see Photo 6). Some revegetation activity has been attempted, but it is not getting established due to the <br />drought. <br />File Review Notes: <br />• The total permitted area is 1,600 acres. <br />• The previous inspection was performed on 12/19/2007. Two problems were noted, and resolved in <br />2009. <br />• There is a $5,268,550 financial warranty (letter of credit) for the site, which is deemed adequate for <br />reclamation. <br />• Annual fees and reports are up to date through 2012. <br />• The 2012 Annual Report indicates the site identification sign is posted in accordance with Rule <br />3.1.12(1). <br />• The site has a groundwater monitoring plan. The 2012 report indicates both MW -7 sodium and iron <br />concentrations were observed above their respective NPLs in March 2012. This is being address under <br />separate cover in a letter from the DRMS dated November 27, 2012. <br />Current Stipulations: <br />None. <br />Page 2 of 5 <br />