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• (Page 21 MINE ID # OR PROSPECTING ID # M-1986-076 INSPECTION DATE 6/28/01 INSPECTOR'S INITIALS RCO OBSERVATIONS This is a designated mining operation IDM01• This inspection was performed as part of the Division's monitoring of Hard Rock & Metals 110d permits. The operator was contacted about the inspection, and a time was arranged to meet at the site. The operator named on page one was present throughout the inspection. The required permit ID sign and permit boundary markers were observed. The sign is along the west boundary where the access road enters the permit area. All mining/processing activity appears to be within the permit boundary. (The two downhill boundary corner locations are very close but not exact; the lower road segment leading to the water tunnel and that portal pad are within the boundary, as the map depicts.) The mill facility has expanded since the last inspection. The operator has continued with the same style of construction, and adjoined the newer sections of the building to the earlier one, in conformance with the approved plan. All enclosed facilities have atwo-foot concrete stem wall acting as secondary containment, as well as concrete floors reinforced with I-beams. The floor is built directly on the surface of the bulldozed pad, with no deep footers. All power is currently provided by diesel generator, contained in an enclosed portable structure. The diesel fuel tank is stably located outside the mill building, and earth bermed. There was no fuel-contaminated soil observed. There were also drums of acetone and hydrogen peroxide located outside the mill building. These were not in an equipment traffic zone, did not exhibit weathering or degradation, and no spillage was evident. These chemicals are approved for this site. The mill was operating during part of the inspection. All fresh tailings are neutralized immediately at the time of their exit from the facility on the east end, and are captured in a small earthen sump. After dewatering, they are carried to a larger disposal pond. There were 20 cubic yards or less of tailings in the disposal pond, and plenty of capacity for more tailings. When concrete is mixed for building facilities, the tailings sand is utilized, and the amount of tailings present is minimized. There is a storage area for various small parts and materials on the pad near the tailings pond. A small amount of recently crushed ore was stockpiled on a lower bench. The small crusher was present on the bench. All ore taken to be milled is fed into the mill's hopper, with none stockpiled outside the mill. The ore does not exhibit any pyritic characteristic, and there is no staining of the surface soils on the permit area. The interior of the mill facility was briefly inspected. The floor and stem walls appeared intact and adequate to provide containment. The equipment was well constructed and well maintained. There was a small assay lab with small amounts of the various chemicals needed for that purpose. A sealed drum of cyanide briquets was in the mill building. There is also a sealed drum of sodium hypochlorite. These are approved chemicals for this site. There is a small wooden structure (former cabin) presently used for storage. Outside this shed are numerous plastic buckets with secure lids. These are adequate for weather-tight storage for the short term, but will likely photo-degrade in coming years. These are not a problem at this time. The water tunnel and its discharge were observed. Overhead electric power is provided to the pump located at the portal. The water is dammed by a low impoundment about 50 feet inside the tunnel. A small trickle of water discharges from the portal and flows a short distance across the pad, before it percolates into the pad/road surface inside the permit boundary. The operator appears to be in compliance with the environmental protection plan, and the environmental protection facilities appear to be in compliance with the plan. This is swell-operated site. The financial warranty is 540,358, and has not been reviewed in several years. This office will recalculate the costs, and notift the operator, if the figures change. There were no problems noted at the time of the inspection. 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 9701247.5193, or fax 970/247-5104.