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PERMIT #: P- 2010 -018 <br />INSPECTOR'S INITIALS: MAC <br />INSPECTION DATE: December 4, 2012 <br />OBSERVATIONS <br />The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety <br />(Division). Mark Steen, the landowner and President of Gold Hill Mines, Inc., and Gordon Sweeney were also <br />present for the inspection. The AGC Front Range Gold Project is located approximately 8 miles west of <br />Boulder, CO. The site is permitted for 1 acre and the Division holds a financial warranty in the amount of <br />$24,070. <br />As noted in the previous inspection report, on January 27, 2012, Mr. Steen received a Judgment from the <br />Boulder County District Court (Gold Hill Mines, Inc. v. AGC Resources, et al., 2011 CV 1105) which found <br />that Gold Hill Mines, Inc. was entitled to any Permits and bonds associated with the Permits in the name of <br />AGC Resources. The Division has determined that the financial warranty for this site shall be returned to Gold <br />Hill Mines, Inc. upon the successful completion of reclamation. The Minerals Rules and Regulations of the <br />Colorado Mined Land Reclamation Board for Hard Rock, Metal, and Designated Mining Operations do not <br />allow the transfer of NOI's. In order to facilitate the release of the NOI, the Division has determined the <br />landowner may reclaim any disturbance associated with this NOI and request a full performance and financial <br />warranty release. The Division has not received an Annual Report or Annual Fee for 2011 or 2012. The Annual <br />Report requirements for 2011 have been waived. However, in order to prevent a possible revocation of the NOI <br />and forfeiture of the financial warranty, the landowner will need to submit the Annual Fee for 2011 and 2012 <br />and a completed Annual Report Form for 2012 (copy enclosed). <br />Under this NOI, the Operator was to construct three (3) drill pads with a total of fourteen (14) drill holes. <br />During the previous inspection conducted on April 5, 2012, the Division inspected all three of the proposed drill <br />pad locations and found that the Operator had only conducted drilling at Drill Pad No. 1. During this inspection <br />the Division and the landowner visited Drill Pad No. 1 to assess the reclamation that has been performed to <br />date. The mud pit has been backfilled, graded and covered with available topsoil. The water lines which were <br />previously present have been removed and the water tanks located approximately 100' west of the drill pads <br />have been removed as well. The landowner has sealed the single drill hole with neat cement. In addition to the <br />disturbance associated with the drill pad, the Operator had created a small road which connected the existing <br />road to the drill pad; the road has been graded. The approved reclamation plan calls for seeding the disturbed <br />areas with the seed mix which was approved for use at the Cash and Who Do Mine (M- 1983 -141); the <br />landowner has not seeded the reclaimed area. In addition to seeding the reclaimed area, the landowner will need <br />to submit a Final Report pursuant to Rule 5.7. The Final Report shall contain the following: <br />1. The date of completion of prospecting activity. <br />2. The location of prospecting disturbance and reclamation at a scale adequate to accurately field locate these <br />areas, as provided for in Rule 5.6(f) <br />3. A description of the plugging, sealing and capping techniques used including the following information <br />when applicable: <br />(i) When cement is used to abandon the drill hole, the description shall include a description of the cement <br />grout mixture used to seal and plug the hole. <br />The landowner has indicated that the drill operator may be able to provide drill logs or other documentation to <br />show the exact number of holes which were drilled and their location. Any additional information which the <br />landowner can provide should be submitted to the Division with the Final Report. <br />This concluded the inspection. <br />Page 2 of 3 <br />