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MINE ID # OR PROSPECTING ID # M-82-147 INSPECTION DATE 2/28/2001 INSPECTOR'S INITIALS TAS The following problems (PB) and/or possible violations (PV) (and suggested corrective actions) were identified during this inspection. The problems should be corrected by the dates given, or they will become possible violations. The possible violations should be corrected by the dates given to reduce their severity when considered by the Mined Land Reclamation Board. The inspector noted on the previous page should be notified of all corrective actions taken. PROBLEMS/POSSIBLE VIOLATIONS AND CORRECTIVE ACTIONS CORRECTION DATE 1. Current mining related disturbances at the Nyholt Pit have resulted in the exposure and use of groundwater in the absence of an approved we 1:L permit and temporary substitute supply plan as required by the Office of the State Engineer. Further, the operator was actively dewatering and dry mining at the time of inspection. This appears to be contrary to the approved mine & reclamation plan which specifies "This operation will be carried out in a semi-wet condition. There will be virtually no disruption of the prevailing hydrologic balance during the life of the mine. During mining and reclamation, all applicable Colorado water laws and regulations governing injury to existing water rights will be complied with". The operation is in possible violation o~E the approved mining and reclamation plan and Rule 3.1.6(1). CORRECTIVE ACTIONS Complete one of the following on or before June 12, 2001: A. Submit written evidence from the OSE of compliance with all OSE permitting requirement:a for existing dewatering, dry mining, and water management activities at the Nyholt Pit. Submit written evidence from the OSE of approval of liner design. Aad, submit a copy of the OSE approved liner design and specifications to the Division in the form of a technical revision to the permit. B. Backfill all pit excavations and surface depressions with exposed groundwater/process water to an elevation that is within four (4) feet of the ground surface or at least two (2) feet above the water surface, whichever is higher. Backfilling must be completed with overburden, and/or clean, inert material. June 12, 2001 PB or PV PV TOPIC(S) HB,MP,RS,FN ~ ~y~ 7 /°Z ~~4 ~ C. Submit a replacement financial warranty o~ $730,40 a supplemental warranty of $582,300. In addition, the Division will be sending a Reason To Believe letter to the operator and will schedule this matter for consideration before the Colorado Mine Land Reclamation Board at the June 27-28, 2001 McE~t ing. (Page 5) •