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PERMIT #: M-1977-300 <br />INSPECTOR'S INITIALS: MAC <br />INSPECTION DATE: August 26, 2015 <br />OBSERVATIONS <br />The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety <br />(Division). Ken Mushinski and John Hamrick were present on behalf of Cotter Corporation. The inspection was <br />conducted as part of the Division's regular monitoring program. The Schwartzwalder Mine is inspected <br />quarterly and this was the 3rd Quarter inspection of 2015. <br />The Operator informed the Division that power to the site was lost on the morning of August 26, 2015. A <br />raccoon had crawled into the substation, which resulted in several blown fuses. The Operator had an <br />electrician on site to replace the blown fuses. The electrical work is to be completed within one to two days. <br />The Schwartzwalder Mine does not have back-up generators to operator the water treatment plant. The water <br />treatment plant has a back-up heating system to keep the plant warm; the back-up system does not run the <br />pumps. The Operator informed the Division there was a total loss of power at the site for three days at the <br />end of the month of May. However, the power failure was caused offsite and was not related to electrical <br />facilities at the mine site. The power loss prevented the Operator from running the alluvial water capture <br />system, which likely led to the increase in uranium discharged at BPL. <br />Following the last inspection conducted on June 3, 2015, the Operator completed construction of the access <br />road. The completion of the access road re -construction project allowed the Operator to transport chemical <br />reagents used in the reverse osmosis water (RO) treatment plant. The Operator started to bring the RO system <br />back on line in mid-August. Alexco Environmental Group, the contractor who maintains the RO system, <br />recently commenced testing and calibration of the RO system. The RO system was not functional at the time <br />of the inspection due to the electrical issues described above. The Operator estimated the RO system would <br />be fully operational within a week. Once the RO system is back online, the Operator will resume the pumping <br />and treatment of the mine pool. As of August 23, 2015, the mine pool elevation was at 6,582 ft. <br />The Operator informed the Division that they entered into a contract with Energy Fuels to ship the waste resin <br />from the ion -exchange water treatment process. The disposal of the waste resin is regulated through the <br />CDPHE Radioactive Materials License (RML -369-03). <br />The Operator is currently assessing the effectiveness of the grouting project carried out under Technical <br />Revision No. 22. The grout curtain was installed at Sump 10, which is located on the south side of Ralston <br />creek and immediately to the southeast of the water treatment plant. The Sump 10 area was collecting mine <br />water at a rate of approximately 30-40 gallons per minute. The majority of the water in Sump 10 was coming <br />from core holes which were drilled in 2012, but which were never grouted. The Operator estimates there has <br />been a 20% decrease in the amount of water flowing into Sump 10. The Operator will replace the pump in <br />Sump 10 with a new pump capable of pumping at a rate of 80 gpm. <br />Ongoing maintenance activities at the site have included weed control, which was conducted several weeks <br />prior to the inspection. In addition, the Operator cleaned out the sediment behind the cut-off wall. The <br />Division observed low -flow conditions in Ralston Creek. All water within the creek channel was reporting to <br />the by-pass pipe. <br />This concluded the inspection. <br />Page 2 of 3 <br />