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(Page 3) MINE ID # OR PROSPECTING ID # M-1987-028 INSPECTION DATE October 4. 2005 INSPECTOR'S INITIALS CBM The following problems (PB) and/or possible violations (PV) (and suggested corrective actions) were identified during this inspection. The problems should be corrected by the dates given, or they will become possible violations. The possible violations should be corrected by the dates given to reduce their severity when considered by the Mined Land Reclamation Board. The inspector noted on the previous page should be notified of all corrective actions taken. PROBLEMS/POSSIBLE VIOLATIONS AND CORRECTIVE ACTIONS CORRECTION DATE 1 ~ Measurements nn site indicated that anoroximately 75 acres has been dishirhed above and to the west of the largest and lowest pit area by tree clearing. access road building and blasting activities. ~ ~ 16 ~O ~O In addition, the waste dump has been extended to the south and trees have been cleared below the (f3o~,-Q ~,,,~el~ access road and to the west of the waste dump in apparent preparation for extending the dump to the west.. These activities could possibly be in violation of the Mined Land Reclamation Board Order of January 21, 2005 that placed a Cease and Desist Order on any further mine related disturbance outside the present permit boundary. PB or PV: PV CORRECTIVE ACTION: TOPIC(S): ~V Cease all mining related activity outside of the presently permitted 9.9 acre permit area. _ - 2. While extending the damn to the c_outh. boulders were rolled down the dump face and overrode the tilt fence at the bottom. At the came time. the berm at the too of the dump face was not maintained ~~ /6 ~ ~~ as required by the temporary sediment control plan initiated at the operator's request to lessen ~3ee,,~ g„}¢/~ sedimentation to Tavlor Gulch. A recent rainstorm has eroded fines in the waste rock dump down off the face and over the silt fence and at least 600 feet down a drainage west of Tavlor Gulch. This is also a possible violation of CRS 34-32.5-116(4) (i) and (il for failure to stabilize or protect affected land so as to effectively control erosion and failure tg protect areas outside of the affected land from damage occurring during the mining operation and reclamation. , r PB or PV: ~ V CORRECTIVE ACTION: TOPIC(S): Reinstall the sediment control fencing below the waste pile so that it is effective in controlling any _ ~G sediment running off the waste pile. Establish an effective sediment and water control berm at the „Q`'IM too of the slope of the waste pile to force water to run into the lowest mine pit as required by the ~~``YY improved temporary sediment control plan.