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Ouray Silver Mines, Inc. 1900 Main St. Unit 1 PO Box 564 Ouray, CO 81427 aJl:?AY SILVER 1�V11�E To: Travis Marshall, Environmental Protection Specialist �T► � V� Colorado Division of Reclamation, Mining. and Safety 1313 Sherman Street_ Room 215 AUQ 14 2017 Denver_ CO 80203 Date: August 8, 2017 DIVISION OF RECLANIglot4 From: Brian K. Briggs, OSMI MINING AND SAFETY Subject: Second quarter 2017 groundwater exceedances in GW-3A VIA U.S. Mail and Email Mr. Marshall, Ourav Silver Mines Inc. (OSMI)owns and operates the Revenue-Virginius approximately 6 miles south west of Ourav Colorado under the Colorado Division of Reclamation, Mining, and Safety(DRMS)permit number M2012-032 (Permit). OSMI performs quarterly sampling at monitoring wells and in surface water according to Technical Revision number 9 of the Permit. This letter describes iron, lead, and silver results above the Permit limit in well GW-3A during 2nd quarter sampling, subsequent GW-3A resampling, and compares (via time series and bar charts)GW-3A water quality to other second quarter sampling results to demonstrate that the water quality seen in GW-3A is anomalous. It is believed, based on spurious water quality results and field observations that well GW-3A has damaged well casing or failed annulus. OSMI plans to re-install this well as soon as possible. During the recent 2nd quarter 2017 sampling event, which occurred on 6/17/17,dissolved iron, dissolved lead, and dissolved silver were detected above the permit limits (1 mg/L, 0.044 mg/L, and 0.0001 mg/L, respectively)with results of 1.18 mg/L, 0.159 mg/L, and 0.0021 mg/L, respectively. Based on these results, a second GW-3A sampling event(7/11/17)revealed that iron concentrations had fallen and iron was compliant, but that lead and silver, while significantly lower than the previous event, were still above the permit limits with results of 0.09 mg/L and 0.00062 mg/L. The elevated metals results in the second GW-3A sampling event suggest that the initial results were caused by neither sampler, nor laboratory, error. The significance and cause of the elevated GW-3A metals concentrations were evaluated using concentration time series charts for wells GW-3A and GW-313. These two wells are collocated down- gradient of the Mine water pond and bio reactive leach field, GW-3A monitoring shallow groundwater (total depth of 12.37 ft., screened from 4 to 12 ft.) and GW-3B monitoring deeper groundwater(total depth of 39.14 ft., screened from 20 -40 ft.). Bar charts were also used to compare GW-3A metals concentrations to upgradient surface water(SW-15 and SW-16),mine water discharge (MWP Inlet)and Phone: (970) 325-9830 ♦ Fax: (970) 325-9824