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(Page 21 MINE ID # OR PROSPECTING ID # M-1977-285 INSPECTION DATE 10/9/03 INSPECTOR'S INITIALS RCO OBSERVATIONS This inspection was performed by the Division as part of its monitoring of Hard Rock and Metals 112 permits, and to discuss possible changes to be applied for in an upcoming technical revision. The operator was contacted about the inspection and a time was arranged to meet onsite. The operator's representatives named on page one were present during the inspection. About a half hour after the inspection began, representatives from the Durango BLM office, Loren Wickstrom and John Pecor, arrived and remained onsite throughout part of the inspection. The required permit ID sign was posted on the gate to the site. An upcoming technical revision may include changes to the permitted area boundary and/or affected area boundary. The present affected area boundary was not yet fully marked at the time of the inspection, but this was not a problem. However, whether the boundaries are revised or not by next season, the operator must ensure that the affected area boundary (as it exists at that time) is adequately marked by next field season. Markers should be durable and visible, and should at least be placed at the corners. Additional markers between corners are recommended if sighting from corner to corner is not possible. The access road from the county road to the portal area is also included in the permitted area acreage, though the road itself does not need boundary markers. There are also several remote areas, for vent holes, compressor buildings, power holes, electric substations, etc., and their short access road spurs, included in the affected area acreage. These remote sites and their roads have irregular boundaries, which do not have to be fully delineated by markers. The remote features, however, should be somehow marked or identified. This could consist of posting a small sign or painting directly on a t-post, chain link fence, power pole or vent housing, identifying the site by permit number and feature (for example: MLRB permit M-1977-285, Vent S-31• It is understood that a sign at a remote location often invites vandalism, but the Division feels that marking these sites is important, so the method and placement is left to the operator's discretion. The waste dump still contains the portal, cribbing, scale and scale house, steel shop buildings, warehouse, generator buildings, parts storage yard, low grade ore stockpile, upland runoff diversions, and stormwater runoff control structures on and below the dump. Except on the west end which was recently graded, the dump slope is steeper than 2:1 presently. The fuel tanks formerly on the east end of the site were gone. All contaminated soil and barrels formerly outside the shop have been removed and cleaned up. The margins of the various parts of the dump pad were well bermed. Former storage area on the east end of the site now contains no debris or parts, contains stormwater control ponds, and has been rough graded. Overall, site clean-up has resulted in a neat site with less debris present. Anew drainage Channel has been established below the east end of the dump. The west end of the affected area boundary adjoins the permit boundary of the Carnation Mine IM-1977-416). The two permits' dumps are in close proximity to each other, and the operator plans to blur the line between the two dumps during final reclamation grading. The adit is closed temporarily by earthen fill at the mouth of the ports! shed. This is adequate to safeguard the opening, but should be monitored to ensure it remains closed. Final closure will consist of removal of the steel shed, backfilling the adit with rubble and debris, and earthen fill in the adit and grading the surface. The GMG Mine has been partly reclaimed. The decline has been backfilled and graded, old dumps have been smoothed, topsoil has been spread lover part of the sitel, and the site was seeded. It is still very early to tell if seeding will became established, but the site appears stable for now. Other remote sites containing vent holes (S-1, S-2, S-3, S-4, S-5, S-6, S-7, S-81 and the surface support structures (fenced enclosures, electric substations, power drops, pump holes, service holes, overhead electric, and compressor buildingsl, and access roads were inspected also. Their observed details have been documented, and will be used as a basis for the upcoming bond review (unless different information may be submitted during an upcoming technical revisionl. The bond amount is currently $74,932. This amount is due to be reviewed in the near future. However, given the recent reclamation and clean-up, the present amount is estimated to be adequate at this time. No further items were observed or discussed during the inspection. No problems were observed onsite, and the operator has corrected all outstanding problems noted in the file. 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: Bob Oswald; phone no. 970-247-5193.