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(Page 21 <br />MINE ID # OR PROSPECTING ID #: M-1982-020 <br />INSPECTION DATE: 7-25-07 <br />INSPECTOR'S INITIALS GRM <br />This inspection was conducted as part ofthe normal program established by the Colorado Division ofReclamation, <br />Mining and Safety for Succession of Operator Applications of permitted sites. The Lucky Strike Lode is a 110 <br />underground mine and mill site. Currently activities aze focused on the mill and its operation with minima] work <br />underground. Mr. Mike Klein from Rhino Mining accompanied the inspectors on site. <br />The mine identification sign and affected area boundary markers are in place and in compliance with Rule 3.1.12. <br />The sign, although minimal meets the requirements of the Rules. It would be to the new permit holder's benefit to <br />have a metal sign done that can withstand the weather conditions of the azea. The corners of the permit area were <br />marked with t-posts and survey tape that cleazly outlined the permit area. <br />The spill containment for the fuel tank is an earthen berm. Mr. Klein noted the tank is rarely filled beyond''/Z full. <br />As long as this remains the practice the containment area appeazs to be sufficient to hold 125% of that amount. <br />The inspectors noted the door at the secondary escape wayhas had bars welded at key points to prevent unauthorized <br />entry into the mine. <br />Rhino Mining has submitted geo-chemical analysis of the tailing and ore for the site. The analysis notes that tailings <br />are clean and inert. Ore is only on site for less than 180 days and considered a temporary stockpile. The <br />constituents are not considered an environmental liability because of the short duration on site. <br />The documentation of ownership is still an outstanding issue that will be address in separate correspondence from <br />this report. <br />The inspector notes some thistle in the parking area. The population is small and not considered an infestation, but <br />the operator needs to spray them as soon as possible. <br />A travel trailer /mobile home has been parked on site. The inspector notes the trailer as it has a deleterious affect on <br />the site and is not part of the approved plans. The operator needs to remove the trailer from the permit area as soon <br />as possible. The trailer is noted as an issue of concern and will be changed to a problem if not moved by the next <br />annual inspection. <br />A continuing problem is the stockpile of materials from the Brown Derby Mine. The Division has asked several <br />times for this material to be moved off site as it has no bearing on the gold mill or mine. The operator has 30 day to <br />remove the materials from the permit area or the problem will be changed to a Notice of Violation and brought <br />before the Board for action. Any subsequent deposition of materials from this site will be considered a violation of <br />the permit and appropriate action will betaken by the Division. <br />No on site issues other than those noted in this report should affect the calculation of the reclamation bond for this <br />site. <br />