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PERMIT#:M-2014-045 <br /> INSPECTOR'S INITIALS:ERR <br /> INSPECTION DATE: June 2,2020 <br /> PROBLEMS/POSSIBLE VIOLATIONS <br /> INSPECTION TOPIC: Gen. Compliance With Mine Plan <br /> POSSIBLE VIOLATION: The Operator is using a gravity and floatation mill which is not authorized by the permit. The <br /> Operator is using xanthate in the floatation circuit, a designated chemical,which is not authorized by the permit. The <br /> Operator is disposing mill tailings in an unlined repository which is not authorized by the permit. These are possible <br /> violations of C.R.S. 34-32.5-124 for failure to follow the conditions of an order,permit or regulation. <br /> CORRECTIVE ACTIONS: These possible violations will require a hearing before the Mined Land Reclamation Board <br /> scheduled for the August 19-20,2020 Board meeting. The schedule and other details for the MLRB hearing has been <br /> provided under a separate document, sent via certified mail to the Operator on July 1, 2020. <br /> CORRECTIVE ACTION DUE DATE: August 19,2020 <br /> INSPECTION TOPIC: Signs &Markers <br /> COMPLIANCE PROBLEM#1: The affected area boundary markers are missing or incorrectly placed. This is a problem <br /> for failure to maintain boundary markers around the affected area as required by Rule 3.1.12(2). <br /> CORRECTIVE ACTIONS: The Operator shall conduct a survey and replace the boundary markers in the correct <br /> location(s). The operator shall provide proof to the Division that this has been done by the corrective action date. <br /> CORRECTIVE ACTION DUE DATE: July 31,2020 <br /> OBSERVATIONS <br /> This inspection was conducted as part of the Division's routine monitoring program for permitted operations. Elliott <br /> Russell,with the Division, conducted the inspection and Lance Barker, representing the Operator, accompanied the <br /> inspection. <br /> The Mineral Mountain Project is a 110d underground gold mine and is permitted at 9.21 acres. Affected lands will be <br /> reclaimed to support a rangeland post-mining land use. The site is located on the north side of Mineral Hill, approximately <br /> one mile north of Cripple Creek. The Division met Lance Barker at the entrance to the mine site at the end of McKenny <br /> Street. <br /> The mine identification sign was posted at the entrance access road along the western permit boundary and was in <br /> compliance with Rule 3.1.12(1). The Division observed several red rebar posts around the site delineating the permit <br /> boundary. The Operator stated the markers around the area carved out with Acreage Reduction AR-01 were disturbed and <br /> were not in the correct locations. The Operator stated since this area is near the two powder magazines,the fire marshal <br /> instructed them to clear-cut the trees in this area to reduce the fire hazard. This has been cited as Compliance Problem#1, <br /> requiring the Operator to conduct a survey and replace the boundary markers in the correct locations. <br /> The site consists of a single adit/tunnel and a flattened work area made out of development waste rock identified as the <br /> Waste Rock Area on the permit maps. This flat Waste Rock Area was approximately 1 acre in size. The face of the waste <br /> rock dump is approximately 50 feet high and is set at the angle of repose. The Waste Rock Area consists of several <br /> buildings/structures,generators/compressors, a crusher,underground mining equipment,petroleum storage tanks with <br /> secondary containment, and miscellaneous parts, equipment, and scrap metal. The site contained a secondary escape and <br /> air vent shafts located 100 feet southeast of the tunnel portal. There were also two conex storage containers located in the <br /> southeastern portion of the permit which housed the sampling of drill cuttings with XRF analysis to help determine the <br /> advancement of the tunnel. <br /> The Operator stated the surface crusher has a capacity of 50 tons per day,but only runs when enough ore is stockpiled. <br /> Blasted ore from underground is brought to the surface and stockpiled next to the crusher and is then crushed to F minus <br /> and stockpiled in the eastern half of an open-sided building next to the tunnel portal. The Operator stated the crushed ore <br /> is then hauled back underground and is crushed to 100-mesh with a 1 ton per day ball mill. This material is run across a <br /> shaker table to produce a gravity concentrate which is stored in the western half of the open-sided building at the surface. <br /> The remaining material is put through a froth-flotation circuit using xanthate to produce a flotation concentrate which is <br /> brought to the surface to an enclosed conex storage container where the concentrate is placed in one of three electric <br /> Page 2 of 8 <br />