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(Page 2) MINE ID # OR PROSPECTING ID # M-1977-208 INSPECTION DATE 12/07/04 INSPECTOR'S INITIALS ESC OBSHRVATIONS This was an inspection of the Lyons Quarry conducted by Erica Crosby of the Division of Minerals and Geology. John Lohr and Eric Hodek of CEMEX, Inc. were present during the inspection. The purpose of the inspection was to inspect and discuss the current status of the C-Pit. The following describe the latest issues surrounding the C-Pit; The C-Pit was established by the DMG as the groundwater monitoring point, and the A-Pit located approximately ~ mile east of the C-Pit is the compliance point. These monitoring stations were established to monitor potential contaminants from CKD that is stored in the C-Pit. Specifically, these two points are used to monitor compliance with DMG established numeric protection levels for groundwater down gradient of the CKD facility. The Division sampled the C-Pit on June 24, 2004. Based on the analytical results, the sample shows exceedancea for the following parameters: Parameter Value Standard Comment or MCL C1 750 mg/L 250 mg/L Secondary standard; not a wildlife or human health hazard pH 12.5 6.5-8.5 Significant exceedance. Could present problem by contact or by ingestion to birds. Se 0.184 0.02 ug/L 9x exceedance of agriculture standard; 3x ug/L exceedance of drinking water standard. TDS 5550 550 mg/L Exceedance of ambient groundwater values not mg/L known, but based on geology, such high TDS in undisturbed groundwater would not be expected. Effect on ambient groundwater quality, locally, is possible. 809 1800 250 mg/L Exceeds secondary drinking water standard. No mg/L human health or wildlife effects are likely. The sources of the water entering the C-Pit come from direct precipitation, seepage from an upland irrigation ditch located west and south of the pond, and water that is applied to the cement kiln dust several times a day to minimize wind blown dispersal. Spray water, which is drawn from the A-Pit, picks up soluble constituents from the CKD: these z,~c~,.~a~--moat-ly lim,.-~€ism-ii,.,eeto~~ Mate--(-from -gypsum that is added to the process). This solute washes over and through the CKD and into the pond. Due to operational changes, the pool of water in the C-Pit has significantly increased over the years such that a portion of the CKD is underwater. The pool of water in the C- Pit covers approximately 7 acres in size and consists o£ 100 acre-feet of water. The following is the current status of C-pit Issues; September 14, 2004; CEMEX submitted a Wildlife Resource Assessment report for CKD disposal. The DOW and USFS provided comments on the report. The DMG and DOW concur that removal of the water, and prevention of further excess accumulation of water in the pit be implemented as a long- term solution. For a short term solution, the minor mitigation option to install an 8' gate on the access road and to place an 8' construction fence along the leading edge of the bank is required to prevent deer from entering the area and possibly contacting the water or falling into the pit. The gate and fence have been installed. November 1, 2004; CEMEX submitted TR-04 addressing sampling, analysis and reporting plan, updated computer model and report, a review of currently approved ground water monitoring and compliance points with a proposal to revise these, and a drainage control discussion. The revision is currently under review.