2014-12-10_INSPECTION - M1982020

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PERMIT#:M-1982-020 INSPECTOR'S INITIALS: RCO INSPECTION DATE:November 13,2014 OBSERVATIONS This was a routine inspection conducted by the Division as part of its monitoring of Hard rock and Metals 110(2) permits, as well as to inspect various structures onsite which will be included in the operator's Environmental Protection Plan (EPP)which is currently under review. Besides the operator named on page one,who was present throughout the inspection, also present and representing the operator was Tony Smithdorf. The site was receiving its first few inches of snow on the day of the inspection. The site was not active on that day. There were no other mine personnel, and there were no activities on the site, in the office or mill facility, or in the mine. There was no stockpile of ore outside on the pad. The generator was not operating, and the fuel being stored onsite has been drawn down to only a few hundred gallons (for the winter). The buildings were all secured. Some reagents and processing chemicals were observed in the mill building, in the required proper storage. This 110(2) permit was determined by the Division to be a DMO,which requires amending the permit to a 110d. The operator has submitted an amendment containing the necessary elements of an EPP. The EPP is currently under review by the Division. Certain onsite features and structures will be included in the EPP as Environmental Protection Facilities (EPFs). Many of these already exist on the site, and some will need to be constructed or upgraded, and certified to meet EPP requirements. These include the mill facility,fuel storage, ore storage and handling areas,tailings pond, and the stormwater and sediment control structures. All discussion related to EPP and EPF review will be contained within separate correspondence. The Division will correspond with Mr. McGrath and provide copies to Mr. Smithdorf on all items. The required permit ID sign was observed posted at the entrance gate to the permitted area. The operator has also posted the required Notice for the amendment at the entrance. Permit boundary markers were installed at the boundary corners. Since the 8-acre site is on sloping terrain, and includes containments and structures, some of the corner markers are not clearly visible. Additional markers along the permit boundary are suggested. The diesel fuel is all in the primary double-walled tank, housed within its own building and situated above.a concrete containment sump. There is no secondary tank in the generator building anymore, nor anywhere else onsite. There is a new impact crusher and conveyor to feed ore to the mill. The amount of accumulated parts and debris formerly observed on the site has been reduced through hauling it away for salvage or to proper disposal. This practice is encouraged by the Division, since it can help reduce the bond amount for the site in the long run. The operator reminded that all work onsite, including clean-up or construction,should be described on the annual reports. The secondary escapeway is in its same location, but it has been recently rehabilitated. Its entryway was secured. Stormwater runoff and tailings slurry from the mill building and its circuits all report to the unlined tailings pond. An interior tailings pond has been bulldozed up in the center of the old main tailings pond, and its dike is constructed of tailings sand. The operator understands that this dike is not structurally strong and cannot be considered to provide complete containment. It will, however, catch the tailings first and contain them in the center of the larger disposal area, where they may be moved for final placement. The outer dike is structurally competent,and has been present for many years without being loaded. This will be one of the Page 2 of 4