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ATCOLORADO <br />Division of Reclamation, <br />Mining and Safety <br />Department of Natural Resources <br />MINERALS PROGRAM INSPECTION REPORT <br />PHONE: (303) 866-3567 <br />The Division of Reclamation, Mining and Safety has conducted an inspection of the mining operation noted <br />below. This report documents observations concerning compliance with the terms of the permit and <br />applicable rules and regulations of the Mined Land Reclamation Board. <br />MINE NAME: <br />MINE/PROSPECTING ID##: <br />MINERAL: <br />COUNTY: <br />San Luis Project <br />M-1988-112 <br />Au, Ag <br />Castilla <br />INSPECTION TYPE: <br />INSPECTOR(S): Tony Waldron, <br />INSP. DATE: <br />INSP. TIME: <br />Multi Person Inspection <br />Russ Means, Wally Erickson <br />October 11, 2016 <br />13:35 <br />OPERATOR: <br />OPERATOR REPRESENTATIVE: <br />TYPE OF OPERATION: <br />Battle Mountain Resources, Inc. <br />Julio Madrid, Steve Carino <br />I 112d-3 - Designated Mining Operation <br />REASON FOR INSPECTION: <br />BOND CALCULATION TYPE: <br />BOND AMOUNT: <br />Normal I&E Program <br />Partial Bond <br />$7,400,000.00 <br />DATE OF COMPLAINT: <br />POST INSP. CONTACTS: <br />JOINT INSP. AGENCY: <br />NA I <br />None <br />None <br />WEATHER: <br />INSPECTOR'S SIGNATURE: <br />SIGNATURE DATE: <br />Cloudy <br />n� / <br />January 5, 2017 <br />GENERAL INSPECTION TOPICS <br />This list identifies the environmental and permit parameters inspected and gives a categorical evaluation of each. No <br />problems or possible violations were noted during the inspection. The mine operation was found to be in full <br />compliance with Mineral Rules and Regulations of the Colorado Mined Land Reclamation Board for the Extraction of <br />Construction Materials and/or for Hard Rock, Metal and Designated Mining Operations. Any person engaged in any <br />mining operation shall notify the office of any failure or imminent failure, as soon as reasonably practicable after such <br />person has knowledge of such condition or of any impoundment, embankment, or slope that poses a reasonable <br />potential for danger to any persons or property or to the environment; or any environmental protection facility <br />designed to contain or control chemicals or waste which are acid or toxic -forming, as identified in the permit. <br />(AR) RECORDS-------------- --------------- N (FN) FINANCIAL WARRANTY -------- <br />(HB) HYDROLOGIC BALANCE- ------ Y (BG) BACKFILL & GRADING ---------- <br />(PW) PROCESSING WASTE/TAILING---- Y (SF) PROCESSING FACILITIES ------- <br />(MP) GENL MINE PLAN COMPLIANCE- Y (FW) FISH & WILDLIFE------- ---- <br />Y (RD) ROADS------------------ Y <br />Y (EX) EXPLOSIVES--------- N <br />Y (TS) TOPSOIL---------------- Y <br />Y (RV) REVEGETATION---- Y <br />(SM) SIGNS AND MARKERS----------------- N (SP) STORM WATER MGT PLAN---- NA (CI) COMPLETE INSP---- N <br />(ES) OVERBURDEN/DEV. WASTE--------- Y (SC) EROSION/SEDIMENTATION--- Y (RS) RECL PLAN/COMP— Y <br />(AT) ACID OR TOXIC MATERIALS------- Y (OD) OFF-SITE DAMAGE ---------- Y (ST) STIPULATIONS N <br />Y = Inspected and found In compliance / N = Not inspected / NA = Not applicable to this operation / PS = Problem cited / PV = Possible violation cited <br />Page l of 2 <br />