INSPEC21202

• Permit No: M1999002
• IBM Index Class Name: Inspection
• Doc Name: Inspection Report
• From: DMG
• To: American Soda L.L.P.
• Inspection Date: 12/18/2003
• Media Type: D
• Archive: No

(Page 2)
MINE ID # OR PROSPECTING ID # M-1999-002
INSPECTION DATE 12/18/03 INSPECTOR'S INITIALS ESC
OBSERVATIONS
This was an inspection of the Yankee Gulch Sodium Minerals Project conducted by Erica
Crosby of the Colorado Division of Minerals and Geology. Kit Reed and Tom Jacobson of
American Soda L.L.P were present during the inspection.
The mining and reclamation permit was issued to American Soda L.L.P. on July 16, 1999.
The total permit area is 4,084 acres whereas 512.5 acres is to be affected in the first
five-year panel block. The site is on land owned by the Bureau of Land Management (BLM).
The Division holds a bond in the amount of $236,424.00. The total reclamation cost
estimate for the Yankee Gulch Sodium Minerals Project totals $7,444,531.00, and the BLM
retains a majority of the bond.
The inspection started at the Piceance Site Processing Facility. Construction of the
facility was completed in 2000 and includes solution mining equipment, control room,
administrative offices, maintenance shop, and pumps and boilers used to facilitate the
solution mining process. The evaporation pond northwest of the processing facility was
under a light blanket of snow cover. The HDPE liner and spillways appeared to be in
good repair.
According to the 2002-2003 Annual Report, 34 drill pads were constructed during the summer
and fall of 2000. From 2000 to 2003, it appears that a total of 26 wells were drilled and
completed. The inspection focused on the lower well field of the lat five-year mining
panel.
Over the last several months, solution-mining activities have been curtailed in a number
of production wells in the lower well field. Well 20-14 ceased operation on August 27,
2003 due to nitrogen leak at the well head, well 20-12 ceased operation on September 23,
2003 due to negative mass balance after depressurization was initiated on well 20-14, well
20-12 ceased operation on September 23, 2003 due to loss of mechanical integrity of the
well casing, well 20-11 ceased operation on September 26, 2003 due to negative mass
balance after initial pressure decrease from shut in of well 20-12 and well 21-15 ceased
operation on September 26, 2003 due to negative mass balance. All of the wells noted
above were placed on standby to determine if pressure and possibly fluids from the mining
operations have entered the Dissolution Surface Aquifer. According to American Soda,
L.L.C. during the third quarter of 2003 there was a significant increase in the water
level as measured in monitoring well 21-4DX and a slight increase in the level measured in
monitoring well 21-3D. It was initially not detected in well 21-4Dx due to an
instrumentation problem with the electronic probe. The problem has since been corrected
and a new series of manual measures are made on the monitoring wells.
Wells 21-15 and 20-14 are currently being depressurized. American Soda plans to also
depressurize, plug and abandon wells 20-02 (along with 21-15 and 20-14) during the la`
quarter of 2004 to prevent any future effects on the dissolution zone. Well 20-11 will be
further evaluated after these wells are plugged to determine if it can be brought back
into operation or needs to be plugged and abandoned. Wells that will stay on line in the
lower well field include 20-19, 20-16, 29-20 and 29-24. In addition, future drilling in
the lower well field may be abandoned.
The following well sites were inspected during the inspection;
• Well 29-24; Close to completion and location of the cavity characterization study.
During a meeting on 12-16-03 between American Soda, DMG, EPA and BLM a new
technology was presented to characterize the cavity (TRT Survey) at the Yankee Gulch
Mine. Sonar is placed down 2 holes containing sources and receivers where the
velocity of the distribution is measured. A combined tomogram from the three subset
of sources and receivers delineates the cavern boundaries (source and receivers
placed at the top of cavern, at the same elevation below the top of the cavern and
receivers above the sources in both caverns). This method is vertically more
precise than horizontally and would have a minimum and maximum range. The precise