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MINE ID # OR PROSPECTING ID # M-90-057 INSPECTION DATE 10/26/99 (Page 3) INSPECTOR'S INITIALS ESC The tailings pond was partially full with a mixture of tailings and water. The size of the pond is approximately 1/3 acre. The tailing material is contained in the pond and no off site discharge was noted. Sulfate deposit was noted in the middle of the pond. The operator stated that no discharge would leave the tailing pile facility. All water will be pumped back to the mill to be recycled. The pump was not working during the time of the inspection. A number of small trees are growing in the tailing pond embankment. The operator will need to remove all of the trees to ensure the roots will not jeopardize the integrity of the dam. According to DMG records, the tailing pond was constructed in 1990. A letter dated July 27, 1990 from CTL/Thompson, Inc. includes the results of the compaction measurements of the tailings pond embankment. The average compaction percent test is 90.1. The Division is concerned that due to the length of time from when the clay liner was constructed and its current use today, roughly nine years has passed to potentially degraded the clay liner. The Division will further review the analysis prepared by CTL/Thompson and information contained in the permit application. The Division will notify the operator if additional information is necessary. The following items will need to be addressed at the mill site; 4. The Division was unable to locate any permit boundary markers. Rule 3.1.12(2) requires the boundaries of the affected area to be marked by monuments or other boundary markers. The operator will need to mark the affected area and submit proof in the form of photographs within 60-days of receipt of this report. 5. All trees will need to be removed from the tailings pond embankment and the operator shall submit proof in the form of photographs within 60-days of receipt of this report. 6. The operator will need to identify areas where temporary ore will be stored, and how [he area will be lined to prevent the contamination of surface water and groundwater. Location and description of the temporary ore stockpiles must be submitted to the Division in the form of a Technical Revision within 60-days of the receipt of this report. Miscellaneous issues 7. On June 5, 1990, the Division approved the Hopemore & Leadville Mine with four (4} conditions to the permit. A copy of the conditions is enclosed for your review. The Division has not received any of the information required by the conditions. Please inform the Division the status of each condition noted on the approval letter, within 30- days of receipt of this report. 8. On December 21, 1998, the Division notified the operator of the increase in the financial warranty. The operator is currently working with Lake County to determine the structures that may remain on site. The Division contacted Raren Smhminke of Lake County on October 29, 1999 and a copy of the Division's letter increasing the bond was sent. The operator will need to forward the letter from Lake County to the Division in order for the bond to be adjusted. Bond forms (Corporate Surety & Letter of Credit) are enclosed. The Division is reviewing the application to determine if the site meets the definition of "Designated Mining Operations" as defined in Rule 1.1(14). Under the definition, it states that metal mining operation, permitted under Section 34-32-110 which do not use or store designated chemicals, shall be exempt from the requirements applicable to Designated Mining Operations, unless they have a potential to produce acid mine drainage in quantities sufficient to adversely affect any person, property or the environment.