2015-10-13_INSPECTION - M1977342

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PERMIT #: M-1977-342 INSPECTOR'S INITIALS: PSH INSPECTION DATE: September 30, 2015 OBSERVATIONS The Henderson Mill facility was inspected by Peter Hays, Tyler O'Donnell, Stephanie Mitchell and Michael Cunningham with the Division of Reclamation, Mining and Safety (Division/DRMS) as part of the Division's monitoring inspection program. Mr. Tim Haynes and Mr. Miguel Hamarat with Climax Molybdenum - Henderson Operations (Henderson) were present during the inspection. The inspection began with a meeting to discuss the ongoing permitting items at the site. The following topics were discussed: the Nokes Building Hydrogen Sulfide Release, the Mill Process Water Tank Overflow, the Mill Tailing Delivery Line Release, the Division review of the Henderson Closure Cost Model, the clarification memo for the NPL memo from the Division dated April 14, 2015, the Tailings Storage Facility Liner System (TR -26) project and the Ute Park Extraction Wellfield — Phase 2 (TR -25) project. The drilling and well construction for the Ute Park Extraction Wellfield — Phase 2 project is complete. The vaults, pitless adaptors and electrical connections for both wells were complete. The wells will be operational following the installation of the pumps and final control panel connections. The trenches between the new extraction wells were being backfilled during the inspection. The TSF sand seep liner system project was ongoing and was observed during the inspection. The geomembrane was covered with the required 12 inches of select native material. The placement and compaction of the embankment fill material over the select material was observed. Approximately, 80 percent of the slope was placed from bottom to top. The liner protection and warning strip portions of the project were expected to begin the next week. The monitoring well associated with the sand seep is installed. Henderson staff stated the drill hole was moist, but not wet during drilling. Henderson notified the Division of a Nokes Building Hydrogen Sulfide Release on September 22, 2015. The control room and interior of the Nokes Building were observed during the inspection. The building has been decontaminated and repairs to the facility were ongoing. Henderson stated the auto wash feature in the P2S5 tote transfer chute would likely be removed and replace by a brush system. Henderson notified the Division of a Tailing Delivery Line release on September 11, 2015. The anchor block and the section of the TDL pipeline were observed during the inspection. The thickness of the HDPE pipe was being measured at the time of the inspection. The leak area will not be investigated by camera until the required HDPE fusion equipment is available to repair the pipe if needed. Henderson notified the Division of the Mill Process Water Tank Overflow on September 11, 2015. The area surrounding the tanks was observed. Evidence of recently pooled water was observed. No erosion features on the slope below the tanks were observed. Henderson stated the controls for the tank level indication was changed to prevent the overflow from occurring again. The Division clarification memo regarding the memo dated April 14, 2015 in response to the 5 -Quarter Water Quality Data and Baseline Parameters Report dated May 29, 2014 is still in process. The Division is developing a Groundwater Policy Memo which will address the setting of NPL limits at mining operations. The clarification memo for Henderson will be issued following the acceptance of the Groundwater Policy Memo. Henderson staff stated an update on the Aspen Canyon Ranch well investigation would be available soon. Page 2 of 7