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(Page 2) MINE ID # OR PROSPECTING ID # M-1986-076 INSPECTION DATE 8/17105 INSPECTOR'S INITIALS RCO.HHP,KAP OBSERVATIONS This inspection was performed by the Division as part of its monitoring of Hard Rock and Metals 110 DMO permits. The operator was contacted about the inspection, and the operator, named on page one, was present during the inspection. There was no mining or processing occurring at the time of the inspection, though the operator was performing routine facilities maintenance. The site is identified by the required permit ID posted at the entrance to the permitted area, and all boundaries are also marked The mill and support facilities were inspected. There was no ore stockpiled outside the mill or left in the hopper. Fuel was stored outside the mill in a tank and secondary steel containment as required. The mill building structure appeared to provide the required secondary containment of mill circuit fluids. A small amount of assaying chemicals was stored in the assay lab in the building. The exterior tailings dewatering sump was full. The operator noted that since no recent milling had occurred, the full condition was due to stormwater retention. However, since the sump still contained tailings solids that should not be allowed to flow outside this sump, the operator was instructed to increase the freeboard by raising the height of the containment berm. Later when the water in the tails does percolate into the ground and the sump contains only solids, the tails should be moved to their disposal pond, which will re-establish the sump's capacity. The exterior of the building was inspected for structural integrity, especially where slight sloughing had been previously noted on the east end above the roadway. The operator has been installing grouted wire mesh and hand-placing angular boulders on the steep slope from the roadway up to the foundation of the building to repair the slope and prevent future erosion. The armoring was not yet finished, and the operator stated that he will continue this activity across the slope. The site contains a number of processing and neutralizing chemicals that maybe allowed under the approved Environmental Protection Plan (EPP), but the quantities of the chemicals are not currently documented. Drums of sodium cyanide briquets, hydrogen peroxide and sodium hypochlorite were observed. Since the tally of designated and other chemicals onsite is not current, this is noted as a problem, under the topic of "records" The operator must provide a list of the chemicals stored onsite and their quantities. See the last page for the correction date. The mining area is still in the same location, though there is a larger cut face. The crusher still stands near the mining area. An old portal has been exposed low on the cuttace, but there is no underground mining. The portal and visible portion of the drift appear very unstable. Most of the material moved at the mining area will be backfilled behind the excavation, to raise the floor of the mining area and retain the stability of the slope, as approved in the mining plan. The operator must ensure that as mining proceeds or future sloughing occurs, that the roadway above the mining area is not undercut or stability compromised. If this occurs, it may become a problem. There is a small amount of milling equipment stored on a lower bench, that is not planned for use onsite, and will be removed. This will help maintain a low bond amount. The tailings disposal pond has not received any tails this year, since milling has been limited. The outer containment berm appeared stable, though the cutslope has eroded a bit. The talus rocks that have fallen into the disposal area have not damaged the integrity of the containment, but have reduced the capacity. The rocks must be removed and placed in a stable (or final) location, before the pond is used. One possible location is the buttressing of the steep slope west of the tails pond where the old portal is being covered. Material placed against the toe of that slope will help reduce the raveling of talus and shoughing of soil from above the portal. Stability of slopes is and will bean issue at this site. The practice of ensuring long-term stability of the steep slopes by careful placement of talus, fill, and soil in key locations was discussed. Part of the mining and reclamation plans includes placement of fill in specific areas as development proceeds on the site. The operator should consider prioritizing the placement offill notjust in the "planned" areas for attaining final topography in the long-term, but also in presently disturbed areas that (1) need stabilizing and/or (2) are disturbed and can be reclaimed now. Included in this issue are the eroding soil and root masses, which can enhance overall reclamation if salvaged and carefully placed soon after their sloughing is noticed. This is not a problem at this time, since the operator appears to conitually work to stabilize the site and salvage soil, but this method could improve this effort. In the long run, reclamation will be accelerated and the bond will stay lower.