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(Page 2) <br />MINE ID # OR PROSPECTING ID #: M-1977-310 <br />INSPECTION DATE: 4/5/06 INSPECTOR'S INITIALS GRM <br />OBSERVATIONS <br />This inspection was conducted as part of the normal monitoring program established by the Colorado Division of <br />Minerals and Geology. The JD-6 MINE is located on the south rim of Paradox Valley. Cotter representatives Glen <br />Williams and Dick White accompanied the inspector on site. Division staffinembers Chris Rowe, Rick Wenzel and <br />Deb Gonima also were present. <br />The mine identification sign and affected area boundary markers are in place and in compliance with Rule 3.1.12. <br />T-posts denote the permitted area around the mine site and the signs are located at the entrance offthe county road. <br />The adit entrance is gated and locked at this time. <br />The mine has been active in the past 6 months, but due to Cotter's mill feasibility studies, production was halted for <br />the near future. All ore stockpiled at the site has been removed and the stockpile area is graded to prevent <br />stormwater run off. A sizable trench has been excavated along the eastern edge ofthis azea that shows some signs of <br />stormwater movement. Berms in place to deflect the storm water appear to be to low or poorly maintained. The <br />inspector is noting this as an issue of concern that Cotter should address as soon as possible, Grading on site in <br />other areas direct flow to the main retention/sedimentationpnnd, which appears to be in good order. <br />The new load-out structure is now complete. During the last inspection it was still under construction. The structure <br />is similar to the original one and is covered by reclamation tasks under the bond. <br />The fuel storage tank is in secondary containment. It is noted that recent precipitation has partially filled the <br />structure. If the current wet trend continues, Cotter should drain off the water. If it appears that the mine shut down <br />is going to be for a prolonged period of time, the tank should be removed to a more secure location. <br />No unrelated debris or trash is noted. The office, storage area and compressor house are secured and maintained. <br />No problems are noted at this time. However, erosion control measures and fuel tank security are noted as issues of <br />concern for fuhue monitoring. <br />A reclamation bond review for this site is on hold until the issue of the Designated Mining Operation status is <br />resolved. No issues are noted that would affect the current bond as currently calculated. <br />Responses to this inspection report should be directed to Russ Means at the Division of Minerals and Geology, Grand Junction <br />Field Office, 101 South 3rd Street, Room 301, Grand Junction, Colorado 81501, phone no. 970-241-1117. <br />I & E Contact Address cc: <br />^ CE <br />NAME: Glen Williams ^ BL <br />OPERATOR: Cotter Corporation ^ FS <br />STREET: P.O. Box 700 p HW <br />CITY/STATEIZIP: Nucla. CO 81424 ^ HMWMD (CH) <br />^ WOCD (CH) <br />^ OTHER <br />