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(Page 2) MINE ID # OR PROSPECTING ID #: nn-t4A8-11 ~ INSPECTION DATE: 5-10-01 OBSERVATIONS INSPECTOR'S INITIALS: _~~ Completed a partial inspection of this operation to review progress of reclamation activities, West pit cleanup activities, compliance with permit conditions regarding monitoring and pumping activities at the collection pond and reviewed the seepage area on the north bank of the Rito Seco just south of the West pit. The operator topsoiled and reseeded aproximately 108 acres last year. Most of the acreage was within the tailings impoundment. However, other permit acreage consisted of the diversion ditch system (including areas on waste dump C, the west pit, and west of the West pit) and the evaporation system area. Vegetation is just starting to come up in the reseeded areas. If the area receives adequate moisture this year, vegetative cover should improve. The operator is planning to remove the mill building, primary crusher and conveyor systems this faYl. Afterwhich, the area can be regraded, topsoiled and reseeded. West pit cleanup activities continue. The wafer processing plant continues to operate at near capacity levels. Sulfate levels have been dropping dramatically over the last year. Sulfate levels are at or below 250 mg/I. Manganese and fluoride levels still remain above table standards (even though concentrations are going down) within most of the aquifer. In April, 2001 the operator reported a possible leak in the collection pond system when the leak detection system contained approximately 243 gpad (after pumping the system). Pursuant to the approved permit, Sections D.6.7.fi.4 and D.7.4.3, the operator is required to follow a set procedure to mitigate the problem. The procedure involves the Following; if the operator finds 0 to 20 gpad no response is required. For 20 to 100 gpad, the operator must report to the Division and pump from the sump as required. 100 to 300 gpad requires a specific response involving locating the area of leakage and pumping from the sump as required. If the leakage is greater than 300 gpad, the operator must repair the leaks, or replace the primary liner. The operator has complied with the requirements of the permit. As reported on May 4, 2001, the operator found a hole at the very top of the liner. In addition, the operator is pumping the collection pond on a daily basis to maintain a low water level in the pond and continues to pump the sump. The current amount leaking into the leak detection system has been reduced To 46.5 gpad which means the operator shall continue to report to the Division and pump from the sump as required unless the amount of leakage drops at or below 20 gpad. The seepage area along the north bank of the Rito Seco remains dry. Did not observe any obvious problems at the site. I & E Contact Address NAME: Dave Long OPERATOR: Battle Mountain Resources. Inc. STREET: P.O. Box 310 CITY/STATE/ZIP: San Luis. CO 81152 James Stevens cc: ^ CE ^ BL ^ FS ^ HW ^ HMWMD (CH) ^ SE ^ WQCD (CH) ^ OTHER