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January 30, 2019 C-1981-018/Deserado Mine CCW <br />Inspection Topic Summary <br />NOTE: Y=Inspected N=Not Inspected R=Comments Noted V=Violation Issued NA=Not Applicable <br />N - Air Resource Protection <br />R - Roads <br />N - Availability of Records <br />N - Reclamation Success <br />N - Backfill & Grading <br />N - Revegetation <br />N - Excess Spoil and Dev. Waste <br />N - Subsidence <br />N - Explosives <br />N - Slides and Other Damage <br />N - Fish & Wildlife <br />R - Support Facilities On-site <br />R - Hydrologic Balance <br />Y - Signs and Markers <br />Y - Gen. Compliance With Mine Plan <br />N - Support Facilities Not On-site <br />N - Other <br />N - Special Categories Of Mining <br />R - Processing Waste <br />N - Topsoil <br />COMMENTS <br />This was a partial inspection of the Deseraado Mine conducted on January 30, 2019. The inspection was <br />completed by Clayton Wein of the Division of Reclamation, Mining and Safety (the Division). Jeff Dubbert of <br />Blue Mountain Energy, Inc (BME) accompanied the inspection. The weather was clear with a temperature of 30 <br />degrees F. Access at the site was limited due to snow cover of 5 to 6 inches. <br />HYDROLOGIC BALANCE -Rule 4.05 <br />Drainage Control 4.05.1, 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 />Ponds DP -1 (Photo 1), PP -1 and PP -2 are located at the main facilities area. Pond DP -1 was frozen and <br />covered with snow. There was no discharge occurring at the time of the inspection. The embankments were <br />stable and there were no indications of erosion. The PP -2 pond was frozen and covered with snow. There was no <br />discharge. The embankments were stable and no erosional features were identified. Pond PP -1 was frozen and <br />stable. The embankments were covered with snow and there were no erosional issues. <br />The pond RR -1 (Photo 2) is located at the rail loop. The pond was covered with snow. The embankments were <br />stable and there were no erosional features identified. <br />There are two ponds located at the Slot Storage, the SS -1 and SS -2 ponds. Both of the ponds were covered with <br />snow during the inspection. The embankments to the ponds were stable and no erosional features were noted. <br />The B -Seam Dewatering System #1 was visited during the inspection. Pumping at the system was not occurring. <br />All cells of the system were frozen and covered with snow. The embankments of the cells were stable and there <br />were no erosional features noted. Discharge from the system was not occurring at the Last Chance Pond (Photo 3). <br />Pond RP -2/3 (Photo 4) was accessible during the inspection. The main cell of the pond was covered with snow. <br />There were no indications of erosion on the embankments. The pond was stable. The east cellwas frozen and <br />Number of Partial Inspection this Fiscal Year: 5 <br />Number of Complete Inspections this Fiscal Year: 2 <br />Page 2 of 6 <br />