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PERMIT #: M-1977-493 <br />INSPECTOR'S INITIALS: ECS <br />INSPECTION DATE: October 14, 2015 <br />OBSERVATIONS <br />This was a routine monitoring inspection for the Climax molybdenum mine, a I I 2 -3 hard rock mine operated by the Climax <br />Molybdenum Company — a division of Freeport McMoRan. The inspection was conducted by DRMS representative Eric Scott. This <br />visit also served as a site orientation for Colorado Attorney General (AG) Office representatives Jeff Fugate and Scott Schultz. <br />DRMS and AG representatives arrived on-site at approximately 0900. DRMS was guided/accompanied on the inspection by Climax <br />representatives Ray Lazuk and Aaron Hilshorst, and council for Climax mine Alan Gilbert. <br />The DRMS inspection started with an MSHA safety briefing, followed by a general discussion of the site and some items of interest <br />identified by Climax. DRMS then observed the active open pit from the north survey shack area, and the McNulty Gulch OSF area. <br />DRMS noted that the "North 40" low-grade ore storage area has again expanded since the previous inspection. Waste rock from active <br />mining continues to be deposited on the previously existing footprint of the McNulty Gulch OSF. Additional activity related to the <br />expansion of the McNulty Gulch OSF as approved has not yet commenced. <br />It was noted that waste rock had been placed, or spilled over, in several areas onto previously reclaimed areas adjacent to the "North <br />40" area. If previously reclaimed areas will be covered with waste rock, the existing growth media will need to be salvaged and <br />stockpiled for later use in reclamation. Topsoil removal should also be considered along the undisturbed east and north sides of the <br />current footprint of the existing McNulty OSF to prevent that topsoil from being lost if the waste material is reconfigured/or slides <br />downslope. As Climax is aware, proper salvage and storage of available topsoil is required by rule. <br />The group visited the Storke yard area, observed the 5 -Shaft pump station location, and then proceeded to the Arkansas River drainage <br />compliance well locations. DRMS then visited the bio -solids processing area, Robinson Lake, and Eagle Park Reservoir to discuss <br />ongoing groundwater monitoring in these areas. The group also observed the locations of the groundwater cutoff walls and <br />compliance wells in the Eagle River drainage area. <br />Although the primary crusher was not operating during this inspection, the mill was still processing stockpiled ore. After a walk- <br />through tour of the mill and lab areas, and break for lunch, DRMS visited the Sludge Densification Plant (SDP) and observed the <br />Tenmile and Mayflower TSF areas. DRMS then visited the Tenmile Creek drainage compliance well locations, toured the Property <br />Discharge Water Treatment Plant (PDWTP) and observed the bypass tunnel outlet area. The avalanche diversion berm extension and <br />other areas near the PDWTP had recently been hydro -seeded. <br />While on site DRMS also observed portions of the clean water interceptor ditches, and many other features associated with the water <br />capture, routing, diversion and treatment for the site. All were observed to be operating as designed. The refuse located near the north <br />area of the Robinson TSF has been segregated and is awaiting removal/disposal or use in composting. This area will likely be <br />reclaimed in the near future, or utilized as a wetlands bank area. <br />Other than the previously mentioned topsoil salvage/waste spillage issues observed on the North 40 area, no issues of concern were <br />noted during this inspection. <br />Inspection Contact Address <br />Ray Lazuk <br />Climax Molybdenum Company <br />Highway 91, Fremont Pass <br />Climax, CO 80429 <br />Page 2 of 2 <br />