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(Page 2) MINE ID # OR PROSPECTING ID #: M-1977-306 INSPECTION DATE: 6-16-05 OBSERVATIONS INSPECTOR'S INITIALS GRM This inspection was conducted as part of the monitoring program established by the Colorado Division ofMinerals and Geology for active uranium mine projects. Currently, due to the rapid nature of development at these sites, the DMG is doing monthly monitoring inspections. The JD-9 Mine main entrance is in the Bull Canyon area of Monogram Mesa. The JD-9 has a shaft at the top of the mesa that is an emergency escape way as well as the point where water from the under ground working is pumped for treatment and de-sedimentation prior to release down the canyon. For clarity, this report will break down the observations into the shaft area and Mine Entrance area. The Main Mine Entrance Area has a permanent building for equipment maintenance and supply storage. Several loaders and mine equipment were noted in use or parked in this area. The onsite fuel tanks are in proper secondary containment constructed of earth berms and thick plastic. Seams in the plastic have been sealed with a glue or sealer. During the last inspection a couple of spills /stains were noted along the south edge of the building. The stained soils have been dug up and removed from the site. The azea now has a plastic liner and clean materials to contain any leakage from equipment, etc. stored in this area. Only 2, 55 gallon barrels were noted during this inspection next to the fuel tank containment structure. There were 8 last time and one was tipped over and had created a small spill. One barrel appeared to have liquid, while the other was empty. As discussed with the operator, Cotter will be submitting a Technical Revision to address the proper handling and storage of hazardous materials and waste at all of its sites. (Pictures 3, 4 and 8) Waste from current activities is being gobbed or backfilled into old workings to reduce haulage expenses and reduce surface impacts as much as possible. Established waste piles have been graded on the top and some materials are being deposited on the top but slopes are not impacted at this time. The slopes are stable with only minor riling noted. Some mine debris was observed over the slope edge, which should be cleaned up as much as possible. A 4-inch plastic line brings the dewatering effluent from the upper shaft past the toe of the waste rock slope minimizing contact above the 48-inch culvert. The culvert runs through the waste pile where the natural drainage passes. Below the culvert, the water finds the natural channel, which is away from the southern waste piles. The water is creating a condition where it is eroding the western bank of the drainage. The operator should consider continuing the water line on to the south beyond the culvert and waste dump and into flatter terrain where erosion would be less likely. Since the water does not contact waste piles, this issue is not being listed as a problem but will monitored for erosion impacts. Some ore has been brought to the surface for stockpiling. The operator stockpiles ore until there is enough for several loads. At which point, the stockpile is removed and the process started over. Overall, ore stockpiles at any sites remains for only short periods of time prior to shipping. By Rule, the operator can stockpile ore for up to 180 days. Berms in good repair, azound the stockpile azea, contain stormwater and ore sediments, preventing off site impacts. (Pictures 1,2, 5 and 6) The Emer~ency Shaft /Water Treatment Area has a head frame and 2 small sheds on site. The sheds house the pumps and water treatment tanks. The previous inspection noted concerns about the primary sedimentation pond and its integrity. On this inspection the pumps were not running and there was 3 foot of freeboard in the pond instead of 6 inches to a foot. Inspectors pulled up a vegetation clump within the liner area and noted no penetration through the liner. Solar degradation of the liner along the head of the berm does not appear to be below current