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October 27, 2016 C-1981-018/Deserado Mine CCW <br />Inspection Topic Summary <br />NOTE: Y=Inspected N=Not Inspected R—CommentsNoted V=Violation Issued NA=Not Applicable <br />N - Air Resource Protection <br />N - Availability of Records <br />R - Backfill & Grading <br />N - Excess Spoil and Dev. Waste <br />N - Explosives <br />Y - Fish & Wildlife <br />R - Hydrologic Balance <br />N - Gen. Compliance With Mine Plan <br />N - Other <br />R - Processing Waste <br />R - Roads <br />N - Reclamation Success <br />N - Revegetation <br />N - Subsidence <br />N - Slides and Other Damage <br />R - Support Facilities On-site <br />Y - Signs and Markers <br />N - Support Facilities Not On-site <br />N - Special Categories Of Mining <br />N - Topsoil <br />COMMENTS <br />This was a partial inspection of the Deserado Mine conducted on October 27, 2016. The inspection was conducted <br />by Clayton Wein of the Colorado Division of Reclamation, Mining and Safety (the Division). Scott Wanstedt of <br />Blue Mountain Energy, Inc. was present for the inspection. The weather conditions were clear with a temperature <br />of 68 degrees Farenheight. The ground conditions were mostly dry with a few locations obsereved to be damp or <br />have small puddles. <br />BACKFILL and GRADING — Rule 4.14 <br />Contemporaneous Reclamation 4.14.1; Approximate Original Contour 4.14.2; I-ighwall Elimination 4.14.1(2)(f); <br />Steep Slopes 4.14.2, 4.27; Handling of Acid and Toxic Materials 4.14.3; Stabilization of Rills and Gullies 4.14.6: <br />The Reclamation of the 11L Pad started in September of 2016. Backfilling and grading of the pad was <br />completed in October of 2016. The road to the pad was still in place to allow access to the reclamation site. The <br />pad is scheduled to be seeded. The reclamation work has returned the pad back to the approximate original <br />contour (Photo 1). There were no erosional issues at the reclamation site. <br />HYDROLOGIC BALANCE -Rule 4.05 <br />Drainage Contro14.05.1, 4.05.2,4.05.3; Siltation Structures 4.05.5,4.05.6; Discharge Structures 4.05.7,4.05.10; <br />Diversions 4.05.4; Effluent Limits 4.05.2; Ground Water Monitoring 4.05.13; Surface Water Monitoring 4.05.13; <br />Drainage — Acid and Toxic Materials 4.05.8; Impoundments 4.05.6, 4.05.9; Stream Buffer Zones 4.05.18: <br />- The Facilities Area ponds DP -1, PP -1 and PP -2 were inspected. Pond DP -1 was impounding water at the <br />time of the inspection (Photo 2). There was no discharge from the pond. During the inspection water was being <br />pumped from the pond to be used in the processing facility. The embankments of DP -1 are well vegetated and <br />stable. No erosional features were identified. The trash rack on the primary spillway was free of debris. The <br />emergency spillway is a riprap lined channel, there was no blockages or debris in the spillway. <br />- Pond PP -1 was holding a small amount of water. There was no discharge from the pond. The embankments <br />were stable with no indications of erosion. <br />Number of Partial Inspection this Fiscal Year: 3 <br />Number of Complete Inspections this Fiscal Year: 1 <br />Page 2 of 8 <br />