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PERMIT #: M- 2009 -076 <br />INSPECTOR'S INITIALS: MAC <br />INSPECTION DATE: September 20, 2013 <br />impoundment and then overtopping a small berm and flowing into the impoundment. The amount of water <br />flowing into the impoundment was estimated to be less than 5 gpm. At the time of the inspection there was <br />over two feet of freeboard in the tailings impoundment. The sediment basin contained stormwater; however, <br />the basin was not at full capacity and was not discharging into Hukill Gulch. The stormwater diversion ditches <br />which route water from upland areas around the waste rock pile and the tailings impoundment were found to <br />be in good shape and did not require any repairs. The water which was discharging from the toe of the waste <br />rock pile was flowing through and beneath the waste rock pile. As noted above, there was no surface flow of <br />water seen upgradient of the waste rock pile. In addition, the Division observed water flowing down Hukill <br />Gulch. The water expressed in the gulch immediately below the sediment basin; the rate of discharge <br />exceeded the rate of inflow into the tailings impoundment. The gulch is underlain by crystalline igneous and <br />metamorphic rocks which contain joints and fractures. The water which was expressing in Hukill Gulch (below <br />the tailings impoundment) may be moving through the joint and fracture system. The Division did not observe <br />any signs of failure or instability on or around the tailings impoundment. However, the Division believes that <br />additional monitoring of the water moving through the gulch is warranted. The Division will schedule and <br />conduct an inspection within the next 30 days to monitor the flow of water through Hukill Gulch. <br />Availability Of Records: <br />The most recent Annual Report, received on May 7, 2013 states that quarterly monitoring of groundwater <br />wells and quarterly monitoring of the leak detection system will be carried out once full production <br />commences. The site is not active at the moment; however, 200 tons of tails have been placed into the <br />impoundment. Therefore, the Operator must commence quarterly monitoring of the groundwater wells and <br />the leak detection system. Failure to submit the required monitoring data with the next Annual Report may <br />lead to enforcement actions. The additional monitoring requirements for tailings saturation and tailings bulk <br />density tests can be suspended until the mill facility is operational and placement of tailings into the <br />impoundment resumes. <br />As noted above, the site has not been active since May, 2013. The Division discussed the requirements of <br />temporary cessation with the Operator. If the operation continues to remain inactive for a period of 180 <br />consecutive days or more, then the Operator will need to file for temporary cessation in accordance with Rule <br />1.13. A copy of the Temporary Cessation Application may be obtained at www.mining.state.co.us. <br />Financial Warranty: <br />The Division currently holds a financial warranty in the amount of $96,827.69. This amount remains sufficient <br />to complete reclamation at the site. <br />This concluded the inspection. <br />Inspection Contact Address <br />Ryan McHale <br />Venture Resources, Inc. <br />P.O. Box 1974 <br />Idaho Springs, CO 80452 <br />Page 3 of 7 <br />