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(Page 2) MINE ID # OR PROSPECTING ID # M-2005-065 INSPECTION DATE 11/1/05 INSPECTOR'S INITIALS WHE OBSERVATIONS This pre-operation inspection was conducted as part of DMG's review of a 110-construction materials application. The proposed permit area is located approximately 3.5 miles north of Silverton, in portions of the NW ''/<of the SW '/< and in portions of the SW Y< of the NW Y< of Section 31, T42N, R6W, NMPM, San Juan County. Eight photos accompany this report. Most of the proposed 5.9-acre permit area is located within the 100-yearfloodplain in a braided reach of the Animas River. The mine plan is to excavate and process sand and gravel from areas along the east bank of the river. Mining activities will not approach the east bank of the fow flow channel closer than 50 feet. Excavation activities will maintain 3H:1V slopes and extend to approximately 15-footdepth. Groundwaterelevationsfiuctuate seasonally between 1 to 5 feet below the existing ground surface. The excavation will be conducted to maintain internal drainage, no pit dewatering is anticipated. Material processing will include crushing, screening and washing. Fuel storage area will be located above the 100-yearfloodplain. An historic railroad grade, located along the east side of the permit area, will remain unaffected by mining and reclamation activities. Affected lands will be reclaimed to support rangeland post-mining land use. Reclamation will result in two ponds. The smaller of the two ponds will be approximately 0.14 acres in size, with the larger pond being approximately 2.1 acres in size. The remaining 3.7 acres affected land, located above the anticipated water line, and will be stabilized with vegetative cover. As shown in the accompanying photos and noted in the application documents, most of the permit area is a sparsely vegetated gravel bar located in flood prone areas. The permit area is located on the outside of a turn in the river channel, where erosive energies are concentrated. Evidence of active erosion of the east bank, adjacent to the proposed permit area, was observed. A developing gravel bar, located mid-channel and adjacent to the proposed permit area, splits the flow and further concentrates erosive energy to near bank regions. The 50-foot buffer separating the excavation area from the low water channel is void of substantial vegetative cover and is composed of easily eroded alluvial materials. The current erosion of the east bank and development of the mid- channel gravel bar suggests that erosion of the east bank may continue and possibly advance into portions of the proposed excavation area. The application should be revised to address such potential. Several high flow channels pass through the proposed excavation site. Flow debris littered the site. Therefore, it is anticipated that portions of the excavation area may be flooded during high flows. The application should be revised to address the potential for flooding. Additionally, the presence of high flow channels and flow debris indicates a potential for the excavation to encounter historic mill tailings. Such tailings could have been transported from upstream milling operations and deposited within the proposed excavation area during previous high flows. Evidence of such tailings was not observed during the inspection. However, the application should be revised to address the potential of encountering historic mill tailings. Public notice of the proposed mining operation was posted at the entrance to the proposed permit area. Mining activities had not commenced. No problems or possible violations were observed. I & E Contact Address cc: Harry Posey, DMG X COE, Durango Regulatory Office NAME Jack Clark, Jr. ^ BL OPERATOR Jack Clark. Jr. ^ FS STREET P.O. Box 767 ^ HW CITY/STATE/ZIP Silverton. CO 81433 p WOCD (CH) X Charles Ponchak, permitting contact