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(Page 2) MINE ID # OR PROSPECTING ID # M-2002-063 INSPECTION DATE 9/10/02 INSPECTOR'S INITIALS RCO This inspection was performed by the Division as part of its monitoring of Hard Rock and Metals 110 permits, and since the inspector was in the vicinity for a scheduled inspection of another site. The operator was not contacted before the inspection. There was no mine personnel and no activity at the site during the inspection. This inspection primarily was to check the level of activity at this newly-permitted site. The site was permitted early in 2002, but no activity has commenced yet. There was no mine ID sign posted, as is required, but this is not regarded as a problem at this time. The operator must ensure that one is posted (containing all required information found in Rule 3.1.12) before initiating mining activity. Likewise, the permit area boundaries must be accurately marked with visible and durable markers. Roads to be used as part of this operation pre-existed on the site but no road maintenance was in evidence. There has been no timber removal, sediment pond construction, topsoil stripping or other activities performed in preparation of mining. The dump material has not been affected and no ore has been brought out. The ore stockpile area has not been prepared yet. The portal is still boarded up and secure. No water was discharging from the portal, though the ground was wet from recent rains. Water was heard dripping into a puddle in the adit. Red Cloud Creek was running cloudy. !t was clear that hundreds of sheep were herded through this valley and all across this site during the days before the inspection, though no damage or instability was caused by this. The operator continues to sample the surface water and submit the analyses as required in the approved plan. The least sample was taken on 7/10/02; in a few weeks another series of quarterly samples should be taken. It may be that conditions will prevent the ability to take samples during the coming winter. Regardless, the operator should endeavor to access the site and obtain water samples during the spring "flush," since that set of quarterly samples will be due and that season's water is probably the most important one to have analyzed. Last month this DMG office received a copy of a letter from the Gunnison office of the US Forest Service (USES) to the operator, outlining several requirements and suggestions for the operation. Certain items in the letter may fall within the jurisdiction of DMG. It is not known at this if any changes in response to this letter are forthcoming. If the operator is considering any changes to the approved plan in the DMG permit, •4o satisfy USES requirements, these may require the filing of a technical revision (TR) with this DMG office. A TR is fairly simple to prepare and review. It's fee is S188. Please call if there are any questions. At this time, the site is stable, there are no problems or new issues, and the bond amount is sufficient. There were no additional items observed. All responses or questions about this inspection report should be directed to this inspector at the Division's Durango Field Office. The address is; Division of Minerals and Geology, 701 Camino del Rio, Room 125, Durango, Colorado 81301; telephone 970/247-5193, or fax 970/247-5104. I & E Contact Address cc: Tom Gillis, DMG NAME OPERATOR STREET CITY/STATE/ZIP Wavne Giesv Midas Minino Co. Inc. P.O. Box 772 Philomath.OR 97370 ^ CE ^ BL ^ FS ^ HW ^ HMWMD (CH) ^ SE ^ WOCD ICH) ^ OTHER I, Bob Oswald, certify that on the signature date shown on page one, I deposited a true and complete copy of this entire inspection report in the United States mail, first class postage paid, to the operator of record for this site at the address indicated, and to those others designated in this report to receive copies (DMG personnerl exic~etp~tyetd)~. 5ignatur~~ `~~°