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<br />MINE ID # OR PROSPECTING ID # M-79-094-HR
<br />INSPECTION DATE 2/21/97 INSPECTOR'S INITIALS WHE
<br />OBSERVATIONS
<br />This partial inspection was conducted by Wally Erickson from the DMG Durango office, 484 Turner Drive,
<br />Building F, Suite 101 ,Durango, CO 81301 ,phone (970) 247-51 93. Robert Schwind accompanied the DMG
<br />inspector throughout the inspection. The JD-7 Pit is located approximately 10 miles west of Naturita, on
<br />the north flank of Monogram Mesa and southern portion of Paradox Valley, at 5800' elevation, in portions
<br />of Sections 16, 17 and 21 of T46N, R17W, NMPM, Montrose County. JD-7 Pit is approved to affect 490
<br />acres for surface and underground extraction of uranium ore. DMG holds $316,000financial warranty.
<br />All Rules referenced within this report are taken from the Hard Rock/Metal Mining Rules and Regulations of
<br />the Colorado Mined Land Reclamation Board, effective 5/77, amended 10/95. All sections of the Act
<br />referenced within this report are taken from the Colorado Mined Land Reclamation Act, 34-32-101 ET SEO,
<br />C.R.S., 1973 as amended, revised 7/93. If the operator does not possess a current copy of the Act, Rules
<br />and Regulations, one may be requested for $8.00.
<br />RECORDS -DMG records indicate that original permit was issued on 1 2/14/79, for 650 acres permit area.
<br />On 5/29/80, DMG approved modification to the permit to eliminate lands in Sections 8 and 9, T46N, R17W,
<br />NMPM, from the permit area and reduce total permit acreage to 490 acres. On 1 1 /3/89, DMG approved TR-
<br />01,allowing underground room-and-pillar operations to proceed from the pit floor. Underground workings
<br />were to connect with existing workings created by JD-7 Underground, permit no. M-77-308. Mine drainage
<br />was to be treated at water treatment facility, permitted through NPDES CO-0036251, for M-77-308. On
<br />2/25/91, DMG approved TR-02, changing mine status from temporary cessation to intermittently active, as
<br />provided by Rule 1 .13.7. On 7/18/96, DMG approved TR-03, addressing relocation of approximately 30,000
<br />cy of low grade uranium ore and soils clean-up material from the Whitewater Sampling Plant, and disposal
<br />at the NW toe of the spoil disposal pile for the JD-7 Pit.
<br />FINANCIAL WARRANTY -Rule 4.2.1 (11 requires that all financial warranties be maintained at a level which
<br />reflects the actual current cost of fulfilling the requirements of the Reclamation Plan. DMG records indicate
<br />that the cost of reclamation for the JD-7 Pit has not been reviewed in recent years. Pursuant to Rule 4.2.1,
<br />DMG will review the current cost of reclamation, based upon conditions of the Reclamation Plan and
<br />observations from this inspection. If DMG determines that the existing amount of financial warranty is
<br />insufficient to perform reclamation, the operator shall have up to 60 days to post additional financial
<br />warranty from the date of written notice from DMG of such insufficiency, as provided by Rule 4.2.1121.
<br />SIGNS & MARKERS -Mine identification sign, required by Rule 3.1 .12111, and safety signs were pasted at
<br />the mine entrance. Public access is controlled by locked gate. Mine access road was well maintained.
<br />Affected area perimeter markers, required by Rule 3.1 .12121, were not inspected. Please note that Rule
<br />3.1 .1212) requires that the affected area for M-79-094-HR be clearly delineated from the permit area for the
<br />adjacent M-77-308.
<br />MINE PLAN -Mining operations appeared to have completed excavations for Phase 1 and portions of Phase
<br />2 areas before going into Temporary Cessation in 1981. Operator stated that excavations ceased
<br />approximately 12' above the ore horizon, ore horizon was not exposed. Operator has stated that since 1981
<br />the mine has been maintained for immediate reactivation. Since 1 981, activities at the mine have included
<br />surface drilling, movement of stockpiled material, and general mine maintenance.
<br />Open pit affected area appeared to be approximately 80 acres. Impounded water was not observed within
<br />the pit floor. Highwall was visually estimated at 1 50' height and approximately 6000' length in its circular
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