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(Page 2) <br />MINE ID # OR PROSPECTING ID #: M-1984-014 <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-8 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 off the county road. <br />The adit entrance is gated and locked at this time. The operator has realigned the access road for more direct entry to <br />the staging and the new dump area. Topsoil has been removed from this area to the best of the operator's ability and <br />stockpiled in the northwest comer of the permit area. Large boulders and topography made it difficult to salvage atl <br />the topsoil materials. <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. Some ore stockpiles still remain at the site but a majority has been removed and the stockpile area is <br />graded to prevent stormwater run off. Grading on site in other areas direct flow to the main retention/sedimentation <br />pond, which appears to be in good order. A silt fence has been erected just below the topsoil piles to prevent <br />sedimentation into the adjacent drainage. <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 />Construction of bigger staging and ore stockpile areas has been halted due to the mentioned shut down. Berms are <br />constructed to prevent stormwater erosion over the edge of the piles and contain sedimentation on site. <br />No unrelated debris or trash is noted. The office, storage area and compressor house are secured and maintained. <br />A reclamation bond review for this site is on hold until the issue of the Designated Mining Operation status is <br />resolved. More area has been disturbed and a new bond calculation will have to take into account the additional <br />areas for reclamation. <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 3`d 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 ^ HW <br />CITY/STATEIZIP: Nucla. CO 81424 ^ HMWMD (CH) <br />^ WOCD (CH) <br />^ OTHER <br />