INSPEC26054

• Permit No: M1977378
• IBM Index Class Name: Inspection
• Doc Date: 7/27/2006
• Doc Name: Inspection report
• From: DMG
• To: Sunnyside Gold Corporation
• Inspection Date: 6/6/2006
• Media Type: D
• Archive: No

(Page 2)
MINE ID # OR PROSPECTING ID # M-1977-378
INSPECTION DATE 6/6/06
INSPECTOR'S INITIALS WHE
OBSERVATIONS
This inspection occurred as part of DMG's routine monitoring plan for permitted high altitude metal mines. The
Sunnyside Mine permit includes lands at the American Tunnel facility, Mayflower Tailings Pond 4 area, TR-26
borrow area, Terry Tunnel area, and Lake Emma area, totaling 159.49 acres. The Operator pursues final
reclamation at all permit areas. DMG holds $146,151 financial warranty. Affected lands will be reclaimed to support
a combination of wildlife habitat and rangeland post-mining land use. This inspection was limited to the American
Tunnel facility and lands at the TR-26 borrow area. Lands at the Mayflower Tailings Pond 4, Terry Tunnel, and
Lake Emma areas were not inspected.
The American Tunnel portal is located on an unpatented mining claim on BLM lands. Ownership of all other
permitted lands at the American Tunnel facility, previously owned by Gold King Mines Corporation, have recently
been secured by Todd Hennis d.b.a. San Juan Corporation. Gold King Mines Corporation remains underviolation
with WOCD forfailure to operate the watertreatment plant in accordance with WOCD permit conditions. Discharge
from the adit continues to drain untreated to Cement Creek.
During the fall of 2005, the Operator, Sunnyside Gold Corporation, completed backfilling, grading and seeding for
the area previously containing the 4 wastewater treatment ponds. Sludge had been removed from the treatment
ponds and hauled to Mayflower Tailings Pond 4 forfinal disposal. Silt fence had been installed between the project
area and Cement Creek. Backfilled and graded areas appeared stable, evidence of settling, slumping orexcessive
erosion was not observed. Evidence of the seeding and mulch were observed; infant vegetation was emerging.
Remaining reclamation to be completed at the American Tunnel area appears limited to removal of structures,
backfilling and grading to stable slopes which blend with the surrounding natural topography, and establishment of
an appropriate vegetative cover. The Change/Dry Room building and the Reagent Addition WaterTreatment Plant
have been approved as permanent structures as requested by the landowner and approved through TR-29.
Portions of the office building collapsed during winter 2005/2006 due to snow load. The office building is scheduled
for demolition during final reclamation. The Operator indicated his desire to complete building demolition and
reclamation backfilling, grading and seeding during this construction season 2006.
The TR-26 borrow area is located in floodplain areas immediately adjacent to the channel of the Animas River
where pre-lawtailingshad been removed in accordance with the amended Consent Decree between WOCD and
SGC. Backfilled and graded areas appeared stable, no evidence of settling, slumping orexcessive erosion was
observed. Vegetative cover consisted of 100 (+/-)willow shrub transplants in the low-lying wet areas with various
grasses and (orbs planted in the high and dry areas. After completion of the project, San Juan County, the
landowner, constructed a road through the area and has encouraged public access to the site. DMG has previously
observed camp trailers parked in reclaimed areas. During this inspection DMG observed several camp fire
locations from previous campers.
No problems or possible violations were observed.
Responses to this inspection report should be directed to the Division of Minerals and Geology, 701 Camino del
Rio, Room 125, Durango, Colorado 81301, Attn: Wally Erickson, phone no. 970-247-5469.
I & E Contact Address
NAME Larrv Perino
OPERATOR Sunnyside Gold Corporation
STREET P.O. Box 177
CITY/STATE/ZIP Silverton. CO 81433
cc: David Berry, DMG
^ CE
^ BL
^ FS
^ HW
^ HMWMD (CH)
^ SE