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t (Page 2) MINE ID # OR PROSPECTING ID #: M-88-t 12 INSPECTION DATE: g/2t/nn INSPECTOR'S INITIALS: JCS OBSERVATIONS Although conducted and reported as a compliance inspection of the operation by the Division, this inspection was primarily made, with the agreement of the operator, for the purpose of acquainting a representative of the Indonesian Ministry of Mines and Energy together with the OSM advisor to the Ministry with the reclamation efforts being made at the site as well as with the corrective actions unde'vvay in regard to the ground and surface water discharges from the West Pit. The mine is in final reclamation at this time. The operator was represented during the inspection by Ron Zumwalt. The Division would like to thank Battle Mountain for their cooperation in allowing these visitors to the San Luis site and Mr. Zumwalt, in particular, for serving so well both as a host and guide during the visit. The tailings facility was the first area visited. Some 14+ acres of this facility are currently covered by a residual pond. The facility totals in excess of 190 acres which have been graded, topsoiled and, to a great extent, seeded. Flow of water from the tailings pile underdrain to the collection pond is continuing. The disposal at the tailings facility of untreated water from the West Pit and/or of more concentrated solutions resulting from the RO treatment plant's operation at the West Pit, although approved, will tend to prol~mg this flow and the monitoring necessary to ensure that the facility will have no adverse impact on the quality of local groundwater. The area of the pilot bio-remediation project in the pink gneiss pit was next visited. At this time, only the well heads for various injection and monitoring wells were visible. The project is now in the stage of allowing the subsurface bacteria time to multiply and to begin to draw upon the sulfate in the pit water for their oxygen needs so as to then reduce the concentration of sulfate in the pit water. Reportedly, it is believed enough alcohol and molasses have been introduced into the saturated zone of the pink gneiss, pit to initiate the desired increase in the bacteria. The newly installed sediment ponds, south west of the West Pit, were inspected and their construction and role in the sediment control plan for the site were discussed. The locations of the various monitoring, interceptor and compliance wells for the Rito Seco alluvial aquifer and the Santa Fe Formation were pointed out, and noted. The site of the first recognized surface seeps of water from the West Pit thru tha Rito Seco alluvial aquifer into the Rito Seco was inspected and no evidence of seepage found. Actions by the operator to reverse the hydraulic gradient from the pit to the Rito Seco continue to be successful in eliminating these seeps. Waste Pile C was next visited, the recently installed diversion system inspected and discussed. The RO treatment plant was the last area visited. The holding ponds adjacent to the facility contained some waver and the "bird ball' covers for these high pH ponds were functioning as expected. Pond 1, the collection pond for the discarded evaporative system, was holding some concentrated water resulting from the RO treatment plant operation. Approval has recently been given to a request by the operator to dispose of his water at the tailings facility. The Division has one concern resulting from this inspection. That concern is the impression given, dur ng the inspection, that the long term means of maintaining a lower water level in the West Pit, once treatment of that water has been completed, will be the placement of a drain pipe or pipes leading from an appropriate level in the pit to the adjacent Rito Seco alluvial aquifer or to the Rito Seco, itself. The operator is reminded that such a facility has not been formally proposed to nor approved by the Division. I & E Contact Address cc: Mr. Maclovio Martinez NAME: Mr. Ron Zumwalt OPERATOR: Battle Mountain Resources, Inc. STREET: P.O. Box 310 CITY/STATE2IP: San Luis. CO 81152