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March 13, 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 />N - Availability of Records <br />N - Backfill & Grading <br />N - Excess Spoil and Dev. Waste <br />N - Explosives <br />N - Fish & Wildlife <br />R - Hydrologic Balance <br />R - Gen. Compliance With Mine Plan <br />N - Other <br />N - Processing Waste <br />N - Roads <br />N - 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 />N - Topsoil <br />COMMENTS <br />This was a partial inspection of the Deserado Mine by Zach Trujillo and Dan Hernandez of Colorado Division of <br />Reclamation, Mining and Safety (DRMS) conducted on March 13, 2014. Scott Wanstedt of Blue Mountain <br />Energy, Inc accompanied us on the inspection. The weather was sunny with dry ground conditions. Temperatures <br />for the day were around fifty degrees fahrenheit. <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 />The primary discharge is a riser pipe with the inlet was clear of any debris. The pond was not discharging during <br />the time of the inspection. The emergency spill way was well armored with rip rap and a concrete cutoff wall. The <br />main channel from the intermediate facility bench was stabilized with rip rap. No cutting or instability was <br />observed. The secondary channel from the same facility bench noted in the previous inspection report has been <br />reestablished. Flow from the facility bench successfully flows into the primary armored ditch before reaching the <br />sediment pond. The beginning of the secondary ditch is constructed with a rock check dam as additional sediment <br />control prior to entering Pond DP -1. <br />The drop culverts within the ditch between the haul road and mine office access road has been dug out and <br />cleaned. <br />Mine dewatering pond system held water at the time of the inspection. Water was filled up to the artificial <br />wetlands section. No water to the date of this inspection has been discharged from the mine dewatering pond <br />system. No issues were observed. <br />Storage material found in the ditch near the portals has been removed. No issues were observed. <br />Number of Partial Inspection this Fiscal Year: 6 <br />Number of Complete Inspections this Fiscal Year: 3 <br />Page 2 of 4 <br />