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PERMIT #: M-1983-141 <br />INSPECTOR'S INITIALS: MAC <br />INSPECTION DATE: April 30, 2015 <br />INSPECTION TOPIC: Sediment Control <br />PROBLEM/POSSIBLE VIOLATION: Problem: Erosion gullies and ruts were observed on the haul roads. This is a <br />problem at this time for failure to protect the affected land from erosion pursuant to C.R.S. 34-32.5-116 (4) (j). <br />CORRECTIVE ACTIONS: The operator shall provide photo documentation to the Division verifying erosion gullies <br />and ruts have been repaired, and that the site has have been reconstructed and stabilized to prevent erosion <br />damage by the corrective action date. <br />CORRECTIVE ACTION DUE DATE: 7/17/15 <br />OBSERVATIONS <br />The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety <br />(Division). Mark Steen was present on behalf Gold Hill Mines, Inc. In addition, Mel Swanson and Dwight Cross <br />were also in attendance for the inspection. <br />On March 10, 2015, the Division received a Succession of Operators application to transfer the permit from <br />Gold Hill Mines, Inc. to Colorado Milling Company, LLC. The application was found to be incomplete and a <br />letter was sent to the Operator on March 17, 2015 which listed the missing materials which must be received <br />before the Reclamation Permit can be transferred. The Permittee and the Prospective Successor waived their <br />right to a decision of the application within 30 days. Therefore, the Division will calculate the required financial <br />warranty once the Succession of Operators application is complete. <br />The Cash and Who Do Mine is currently in temporary cessation. The first five year period of temporary <br />cessation commenced on June 13, 2013 and will end on June 13, 2018. The Bureau of Land Management <br />(BLM) owns portions of the surface of the permitted area. In April 2013, the BLM issued a Notice of Temporary <br />Suspension for all of the Gold Hill Mines, Inc. operations. The initiation of mining or milling operations may not <br />occur until such time as the BLM has completed the NEPA process, approved a Plan of Operations and lifted <br />the Temporary Suspension Order. <br />The Division's inspection focused on the surface facilities and surface disturbance. No additional disturbance <br />has been created at the site since the Division's last inspection in 2012. All of the surface facilities remain <br />unchanged and no new structures have been constructed at the mine. The following are the Division's <br />observations made at the various surface facilities: <br />Who Do Portal <br />The weather was warm at the time of the inspection and there was a significant amount of runoff across the <br />mine site. In addition to surface runoff from snow melt, the site has many seeps which express during the <br />spring. The Division observed water running down various haul roads which was creating ruts and gullies on <br />the haul roads. Also, the Division observed a culvert adjacent to the Who Do portal which was partially <br />collapsed/blocked. The culvert is located approximately 250 feet east of the Who Do portal on the haul road. <br />The blocked culvert was causing water to flow down the haul road. <br />The Division observed a black HDPE pipe extending from the east side of the mine dump located in front of the <br />Who Do portal. The pipe was discharging water onto the haul road at an approximate rate of 5 gallons per <br />Page 2 of 7 <br />