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PERMIT#: M-1977-493 <br /> INSPECTOR'S INITIALS: ECS <br /> INSPECTION DATE:May 25,2016 <br /> OBSERVATIONS <br /> This was a routine monitoring inspection for the Climax molybdenum mine, a 112d-3 hard rock mine operated by the <br /> Climax Molybdenum Company—a division of Freeport McMoRan. The inspection was conducted by DRMS <br /> representative Eric Scott. DRMS arrived on-site at approximately 0915. DRMS was guided/accompanied on the <br /> inspection by Climax representatives Ray Lazuk,Aaron Hilshorst,and James Hagg . <br /> The DRMS inspection started with a general discussion of the site and some items of interest identified by Climax and <br /> DRMS. DRMS then toured the mill, which was not in operation during the inspection. A portion of the SAG mill liners <br /> were in the process of being replaced as part of the normal maintenance program. The group then observed the open pit <br /> from the north survey shack area. The McNulty Gulch OSF area(as well as the majority of the site)was still snow- <br /> covered during this inspection. DRMS noted that the"North 40" low-grade ore storage area has again expanded since the <br /> previous inspection. Waste rock from active mining continues to be deposited on the previously existing footprint of the <br /> McNulty Gulch OSF. Additional activity related to the expansion of the McNulty Gulch OSF as approved has not yet <br /> commenced. <br /> The group inspected the vehicle maintenance shop area, and the hazardous waste disposal buildings while in the camp <br /> area. Both of these facilities were observed to be very well maintained and operated. <br /> The group then visited the Storke yard area,where Climax personnel have noted that a historic seep located on the inside <br /> of the bend of the highway has been recently observed to be depositing iron precipitate. Climax has investigated the seep <br /> and believes that it is due to a historic culvert shown by old mine records in that location. The mine intends to confirm <br /> this theory, and if correct,properly abandon the culvert to eliminate the"spring". This work will proceed as soon as the <br /> peak runoff season passes and the area dries to minimize the disturbance to the surrounding area. <br /> The inspection proceeded to the bio-solids processing area,Robinson Lake, and Eagle Park Reservoir to discuss ongoing <br /> 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 /> DRMS observed the Sludge Densification Plant(SDP)and the Tenmile and Mayflower TSF areas. Tailings deposition <br /> has moved almost entirely to the Mayflower TSF,with the Tenmile TSF still available if needed. Climax stated that they <br /> intend to begin closeout planning for the Tenmile TSF this season. Application of Coherex to the Mayflower TSF for dust <br /> suppression was taking place during the inspection. DRMS then visited the Tenmile Creek drainage compliance well <br /> locations,toured the Property Discharge Water Treatment Plant(PDWTP) and observed the bypass tunnel outlet area. <br /> No issues of concern were noted during this inspection. <br /> Inas ection Contact Address <br /> Ray Lazuk <br /> Climax Molybdenum Company <br /> Highway 91,Fremont Pass <br /> Climax,CO 80429 <br /> Page 2 of 2 <br />