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PERMIT #: M- 1985 -022 <br />INSPECTOR'S INITIALS: MAC <br />INSPECTION DATE: October 29, 2013 <br />OBSERVATIONS <br />The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety <br />(Division). Robert Treat of Buffalo Peaks Mining Co., LLC was also present for the inspection. The Bullger Basin <br />Placer site is located approximately 7 miles northwest of Fairplay, Colorado. The commodity of interest is gold. <br />The site is permitted for 49 acres and the approved post- mining land use is mining and wildlife habitat. <br />The site was not active at the time of the inspection. The site is located at an approximate elevation of 11,500 <br />ft.; the mine operates intermittently and is only accessible during several months of the year due to the <br />elevation. However, the site has not been operated for several years. Pursuant to Rule 1.13.5, when an <br />Operator ceases production for 180 days or more, the Operator must file a Notice of Temporary Cessation in <br />writing to the Division. Following an inspection conducted on August 26, 2008, the Division cited a problem foi <br />failure to place the operation into Temporary Cessation, and the Operator was required to file the Notice of <br />Temporary Cessation by March 30, 2009. A review of the permit file shows that the Operator did not submit a <br />Notice of Temporary Cessation. Therefore, a problem has been cited for failure to file a Notice of Temporary <br />Cessation; please see the first page of this report for additional information. <br />The Operator informed the Division that the Bullger Basin Placer mine has been sold and that the new owner <br />will operate the mine. The Division informed the Operator that Buffalo Peaks Mining Co. remains the <br />Permittee and is still responsible for all reclamation liability associated with the site. According to Mr. Treat, a <br />Succession of Operators application will be submitted to the Division in the near future to transfer the <br />Reclamation Permit to the new Operator. The new Operator has started to perform basic site maintenance, <br />including removing old equipment from the site. The Operator should be aware that the originally approved <br />Mining and Reclamation Plans have not been modified. Therefore, it may be necessary to modify the Mining <br />and Reclamation Plans through a Technical Revision if future operations deviate from the approved plans. ThE <br />Division is required to conduct an inspection whenever a Reclamation Permit is transferred; this inspection wi <br />serve as the required inspection if the Succession of Operators application is submitted within'30 days of the <br />date of this report. <br />The source of water for the Bullger Basin Placer is site is from the Pennsylvania Creek; the water right is for 2. <br />cubic feet per second. The water is diverted through a pipeline to a small pond on the west side of the site an <br />is then pumped to the top of the mine site where the vibration screen is located. The pipeline to divert water <br />is not intact and no water was being diverted at the time of the inspection. There are four ponds located at <br />the south end of the site. When the active mining operations are occurring, the ponds function as settling <br />ponds and detention basin for stormwater. The Division observed water in several of the ponds; the water wi <br />from precipitation events. <br />The Division currently holds a financial warranty in the amount of $128,461.00, which based on observations <br />made during the inspection, is adequate to complete reclamation. A complete financial warranty calculation <br />will be performed as part of the Successor of Operators process. <br />This concluded the inspection. <br />Page 2 <br />