2013-02-26_INSPECTION - M1977193

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OBSERVATIONS PERMIT #: M -1977 -193 INSPECTOR'S INITIALS: TC1 INSPECTION DATE: February 7, 2013 This inspection was initiated by an amendment application (AM -05). The focus of this inspection was to assess the operation status and determine what, if any of the proposed amendment activities might have an impact on a) mining operations, b) the reclamation plan, and c) the financial warranty liability. Tim Cazier represented the Division of Reclamation, Mining and Safety (Division). Mr. Randy DiLuzio (Tezak Heavy Equipment) and Mr. Ken Klco (Azurite, Inc) represented the Operator. Ms Stephanie Carter represented the Bureau of Land Management (BLM). The Aggregate Source Pit is located in Fremont County, approximately 1.5 miles west of Canon City. The access road is about 400 feet west of the intersection of U.S. Hwy 50 and Tunnel Drive. Inspection: A permit sign was prominently displayed at the site entrance (see Photo 1). The permit boundary is marked with white poles (see Photos 2 and 3). The site was active at the time of the inspection. Mr. DiLuzio explained this is a dry operation; material is processed without washing (crushing and screening only). Mining is currently confined to the west side of the pit. The purpose of the amendment is to expand towards the west and mine BLM land. This would delay the need to relocate equipment to the north, allowing it to remain in its current location. Highwalls were observed to be benched at appropriate slopes (see Photos 4 and 5). Mr. DiLuzio explained T.H.E. uses a contractor for drilling and blasting. A bench was observed with blast holes drilled (see Photo 6). Several material stockpiles were observed (see Photo 7). Sediment ponds in the northeast portion of the site were observed to be dry (see Photos 8 and 9), as was the in- pit diversion channel (see Photo 10). This diversion channel collect stormwater from the ephemeral drainage to the west (see Photo 11) which will be required to move along the toe of the highwall as mining proceeds to the west onto BLM property as proposed by the current amendment application. A recently constructed riprap- lined diversion channel was observed west of the sediment ponds (see Photo 12). No exposed groundwater was observed, nor was any stormwater retained onsite. Note there was a significant rain the night before this inspection. No noxious weeds were observed. The amendment application as submitted, removes a portion of the permit area on the south end near Tunnel Drive where the historic haul road access was. The large building and rock protected slope (see Photo 13) are in this area according to the revised permit boundary map received from Mr. Klco on 2/11/13 via email (see Attachment A). There was some discussion on site as to whether or not the Division can allow the release of permitted area as part of an amendment. Pursuant to Construction Rule 4.17:1, the removal of any area from the permit boundary needs to be accomplished through separate permitting revision, and the request needs to come via certified mail. Mr. DiLuzio and Mr. Klco were notified of this requirement via email on 2/11/2013. File Review: • The previous inspection was performed on June 7, 2010. A problem was noted with respect to the Division needing additional bond for the office addition. The issue was resolved in September 2010. No problems are outstanding at this time. • The current (pre- amendment AM -05) total permitted area is 231 acres of which 131 acres may be affected area. • Annual fees and reports are up to date through November 2012. The 2012 annual report indicates mining activity has disturbed a total of 60 acres. • The current bond is a $540,215 financial warranty (corporate surety) is based on the amendment 4 Page 2 of 6