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PERMIT #: M-2009-076 <br />INSPECTOR'S INITIALS: MAC <br />INSPECTION DATE: September 17, 2015 <br />OBSERVATIONS <br />The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety <br />(Division). Patrick Maher of Venture Resources, Inc. was also present for the inspection. The Hukill Gulch <br />Millsite is located approximately 2 miles north of Idaho Springs, in Clear Creek County. The site is permitted <br />for 8.76 acres and the post -mining land use is rangeland. <br />The inspection was conducted as part of the Division's regular monitoring program. The Hukill Gulch Millsite <br />operates under a 110d Reclamation Permit. The operation was not active at the time of the inspection. <br />According to the Annual Report submitted to the Division on April 14, 2015, processing of material last <br />occurred in 2012. Pursuant to Rule 1.13.5, if the Operator temporarily ceases production of the mining <br />operation for 180 days or more, the Operator must file a Notice of Temporary Cessation. The Notice of <br />Temporary Cessation for the initial period shall include the following: <br />a) The date of cessation. <br />b) The reasons for non -production or cessation of the mining operation. <br />c) A plan for resumption of mining. <br />d) The measures taken to comply with reclamation requirements and/or other activities related to the <br />performance standards of Section 3.1 while the mine is in Temporary Cessation. <br />e) Demonstration that the existing financial warranty is adequate to cover the reclamation liability. <br />The failure to place the operation into Temporary Cessation has been cited as a problem and will require <br />corrective action; please see the first page of this report for additional information <br />Financial Warranty: <br />The Division currently holds a financial warranty in the amount of $96,827.69. This amount remains sufficient <br />to complete reclamation at the site. <br />Hydrologic Balance: <br />The Annual Report, received on May 7, 2013 stated that quarterly monitoring of groundwater wells and <br />quarterly monitoring of the leak detection system would be carried out once full production commences. The <br />site is not active at the moment; however, approximately 200 tons of tails have been placed into the <br />impoundment. Therefore, the Operator must immediately commence quarterly monitoring of the <br />groundwater wells and the leak detection system. The failure to conduct groundwater monitoring has been <br />cited as a problem and will require corrective action; please see the first page of this report for additional <br />information. <br />Gen. Compliance With Mine Plan: <br />The Hukill Gulch Mill site is comprised of two permit areas which include a mobile mill facility and a tailings <br />impoundment. The mill is located above Hukill Gulch and consists of covered crusher feed pad, a crushing <br />plant trailer, a crushed rock conveyor, crushed rock bin, ball mill feed conveyor, ball mill trailer, and flotation <br />trailer. The mill site was not operational at the time of the inspection; according to Mr. Maher the mill was last <br />operated in 2013. The mill site was in a neat and orderly condition; sediment fences were in good shape and <br />were functioning properly. The ball mill trailer and flotation trailer were locked and no milling reagents were <br />stored onsite. The Operator had processed approximately 200 tons of waste rock in 2013. The concentrates <br />Page 3 of 6 <br />