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PERMIT #: M- 2012 -032 <br />INSPECTOR'S INITIALS: RCO <br />INSPECTION DATE: November 1, 2013 <br />OBSERVATIONS <br />This was a routine inspection conducted by the Division as part of its monitoring of 112d -1 permits, to inspect <br />the locations of the mine water handling structures to be built under technical revision TR -1, and to assess the <br />progress of installing the underground mill equipment. The operator named on page one was present <br />throughout the inspection. The site was active at the time of the inspection, and observed activity mainly <br />involved mill - related construction. <br />The required permit ID sign was observed posted at the entrance gate to the permitted area. Permit <br />boundary markers were not inspected during this inspection. The site was under about 4 -8 inches of new <br />snow, which made walking more difficult in areas that were not cleared for onsite operations. The issue of <br />boundary marker placement was discussed at the last inspection, and the operator is aware that when the <br />permit boundaries are accessible in 2014, he must ensure that the boundary is fully marked. <br />The 30-ft x 30 -ft mill portal is no longer closed by use of a curtain over the opening. The opening is now <br />covered by the new tailings filter building. The concrete and steel outer structure has been completed, and <br />the roof and walls are covered with corrugated steel, as planned. The doors and windows are in place, and <br />the interior is being completed. The lower floor of the building is constructed from thick concrete walls, and <br />the spaces mainly comprise large equipment access and tailings loading bays. Several chemical storage and <br />mixing tanks are being installed there, as well as water storage tanks (associated with the filters). The upper <br />floor contains mill office, electric switch gear, tailings filters and assay room. <br />The mill space is nearing completion. Walls and roof are steel mesh and shotcrete. The floor is finished <br />concrete, sloped toward the designed sumps. Concrete stem walls extend about a foot high around the <br />perimeter. Electric supply cables are installed on orderly trackways attached to the steel I -beam framework <br />that is in place throughout. An overhead traveling beam crane is in place. Almost all the flotation tanks, <br />agitators, and piping are installed. Steel decking and stairs are finished. The ball mill has been completed, <br />along with feed hopper and conveyor. The primary and secondary crushers, and conveyors were nearly <br />finished at the time of the inspection. The mill and crusher areas were all clean, orderly and well -lit. <br />The operator is preparing parts of the mine dump and tailings area for constructing mine water handling <br />structures (that were being reviewed under TR -1 at the time of the inspection). The new mine water pond has <br />been excavated into the NW corner of the old waste rock disposal area. The outslopes below the pond, that <br />lead down to Sneffels Creek, as well as the slopes above the pond, have all been graded to a 3:1 gradient. This <br />is stable and will allow these slopes to be topsoiled and revegetated also. There is a setback from the creek to <br />allow equipment access for maintenance. <br />The leach field has not been excavated yet, and none of the trenching for the piping has begun. Most of that <br />area is currently occupied by as a mine storage yard. The Revenue tunnel discharge pipe currently in place <br />along the south edge of the old mine pond area will remain in place, but it will be perforated, capped, then <br />bedded and covered. A second pipe will be installed there in similar fashion, as both pipes are part of the new <br />mine water handling plan. <br />The mine pond and leach field will both be lined with impermeable liners that will be custom manufactured. <br />The installations require dry surfaces and higher temperatures (according to manufacturer's installation <br />Paae 2 of 6 <br />