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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-1977378 <br />INSPECTION DATE 8/29/05 <br />OBSERVATIONS <br />INSPECTOR'S INITIALS WHE <br />This inspection occurred as part of DMG's review of requests from the permit holder for reduction in <br />permit acreage {AR-03) and reduction in the amount of financial warranty (SR-04), The Sunnyside Mine <br />permit includes 159.9 acres. DMG holds $500,000 financial warranty. Affected lands will be reclaimed to <br />support a combination of rangeland and wildlife habitat post-mining land use. Operator has commenced <br />final reclamation. Four photos and a reclamation cost estimation, dated October 6, 2005 and totaling <br />$164,151, accompanythis inspection report. <br />AR-03 was found complete for the purposes of filing on November 24, 2004. Under AR-03, the permit <br />holder requested release of 0.41 acres for completion of reclamation. The referenced 0.41-acre area <br />represents a portion of the Marshal Bertrand Millsite (MS 157926), located near the American Tunnel at <br />the abandoned town site of Gladstone. The referenced site is located at 11,000 feet elevation and was <br />obscured by snow cover during the review period. Therefore, the decision date, January 24, 2005, was <br />extended due to weather. The site was inspected during this August 29, 2005 inspection. Mine dump <br />materials had been removed from the site. Final slopes did not exceed 3H:1 V and appeared stable, no <br />evidence of slumping, sliding or excessive erosion was observed. Vegetative coverwaswell established, <br />dense and diverse, and at lease equal in extent of cover as the surrounding undisturbed lands. <br />Observations made during the inspection and recorded in this report indicate that the operator has <br />completed reclamation in accordance with permit conditions and the Act and Rules. On September 27, <br />2005, DMG approved AR-03. Under AR-03, the permit area was reduced from 159.9 acres to 159.49 <br />acres. No bond adjustment was requested underAR-03. <br />SR-04 was found complete for the purposes of filing on December 1, 2004. Under SR-04, the permit <br />holder requested a $330,000 reduction in financial warranty for partial completion of reclamation at <br />portions of the permit area. The areas referenced under SR-04 included the Lake Emma, Terry Tunnel, <br />MayFlower Tailings Pond 4, TR-26 borrow area, and American Tunnel areas. The various areas <br />addressed by SR-04 are located at 10,000 feet to 12,000 feet elevation and were obscured by snow <br />cover during the review period. Therefore, the decision date, January 31, 2005, was extended due to <br />weather. The sites were inspected during this August 29, 2005 inspection. <br />Lake Emma <br />The operator has nearly completed backfilling of the subsidence feature at the Lake Emma area. Clay <br />cover had been constructed. During this inspection, evidence of minor subsidence was limited to an area <br />estimated at 300 feet long by 100 feet wide. All other portions of the Lake Emma area appeared stable <br />in that evidence of settling, slumping or excessive erosion was limited to the 300 foot by 100-foot area. <br />Remaining reclamation to be completed at the Lake Emma area appeared limited to backfilling and <br />grading of the subsided area and establishment of vegetative cover. <br />Terry Tunnel <br />Backfilling of the portal and grading of the mine dump appeared to have been completed in accordance <br />with permit conditions and the Act and Rules. Affected lands had been graded to blend with surrounding <br />topography, provide positive drainage and appeared stable. No evidence of slumping, settling or <br />excessive erosion was observed. Upland drainage was routed around portions of the northwest end of <br />the reclaimed mine dump by an upland diversion ditch. Upland drainage is also intercepted and routed <br />