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February 27, 2014 C- 1981 - 018 /Deserado Mine ZTT <br />Inspection Topic Summary <br />NOTE: Y= Inspected N =Not Inspected R= Comments Noted V= Violation Issued NA =Not Applicable <br />N - Air Resource Protection <br />R - Availability of Records <br />R - Backfill & Grading <br />N - Excess Spoil and Dev. Waste <br />Y - Explosives <br />Y - Fish & Wildlife <br />R - Hydrologic Balance <br />R - Gen. Compliance With Mine Plan <br />N - Other <br />R - Processing Waste <br />N - Roads <br />Y - Reclamation Success <br />N - Revegetation <br />N - Subsidence <br />N - Slides and Other Damage <br />N - Support Facilities On -site <br />R - Signs and Markers <br />N - Support Facilities Not On -site <br />N - Special Categories Of Mining <br />R - Topsoil <br />COMMENTS <br />This was a complete inspection of the Deserado Mine by Zach Trujillo of Colorado Division of Reclamation, <br />Mining and Safety (DRMS) conducted on February 27, 2014. All records for the Deserado Mine were located at <br />the mine site. Scott Wanstedt of Blue Mountain Engergy, Inc. (BME) accompainied the inspection. The weather <br />was overcast with little snow cover. Ground was partially saturated from snow melt. Temperatures for the day <br />were around fourty five degrees fahrenheit. <br />AVAILABILITY OF RECORDS — Rule 5.02.4(1): <br />All records are kept on site at the Deserado Mine's office building with Scott Wanstedt. Please see the Division's <br />Availability of Records checklist at the end of this inspection report for more detailed information. <br />BACKFILL and GRADING — Rule 4.14 <br />Contemporaneous Reclamation 4.14.1; Approximate Original Contour 4.14.2; Highwall Elimination 4.14.1(2)(f); <br />Steep Slopes 4.14.2, 4.27; Handling of Acid and Toxic Materials 4.143; Stabilization of Rills and Gullies 4.14.6: <br />Borehole N11 -58 was constructed with a raised pad and is in need of sediment control. Scott Wanstedt stated that <br />proper sediment control methods will be constructed when weather allows. No erosional issues were observed. <br />The new rock dust pad along the access road to the slot storage facilities has been completed and is also in need of <br />sediment control measures. Again, pending weather, Scott Wanstedt stated that proper sediment control methods <br />will be constructed when weather allows. No erosional issues were observed. <br />HYDROLOGIC BALANCE - Rule 4.05 <br />Drainage Control 4.05.1, 4.05.2, 4.05.3; Siltation Structures 4.05.5, 4.05.6; Discharge Structures 4.05.7, 4.05.10; <br />Diversions 4.05.4; Effluent Limits 4.05.2; Ground Water Monitoring 4.05.13; Surface Water Monitoring 4.05.13; <br />Drainage — Acid and Toxic Materials 4.05.8; Impoundments 4.05.6, 4.05.9; Stream Buffer Zones 4.05.18: <br />Pond DP -1 is the primary pond for the entire facility area. The pond's embankments were stable and vegetated. <br />Number of Partial Inspection this Fiscal Year: 5 <br />Number of Complete Inspections this Fiscal Year: 3 <br />Page 2 of 8 <br />