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(Page 4) MINE ID # OR PROSPECTING ID # M-1993-035 INSPECTION DATE 8/02/06 INSPECTOR'S INITIALS ESC The following problems (PB) and/or possible violations (PV) (and suggested corrective actions) were identified during this inspection. The problems should be corrected by the dates given, or they will become possible violations. The possible violations should be corrected by the dates given to reduce their severity when considered by the Mined Land Reclamation Hoard. The inspector noted on the previous page should be notified of all corrective actions taken. PROSL8N3/PO33ZBLS VIOLATIONS AND CORRECTIVE ACTIONS 1 .,/ PROBLEM; It appears that French Gulch Mines, Inc. and B&B Mines, Inc. are no longer the property owner of the site (as noted in the original lease agreement with Alpine Rock), and thus the lease may no longer be valid. 34-32.5-112(1)(c)(IV) of the Colorado Land Reclamation Act for the Extraction of Construction Materials, Rule 6.4.14 and the Performance Warranty requires the operator to describe the basis for legal right of entry to the site to conduct mining and reclamation. CORRECTIVE ACTIONS; The operator will need to provide documentation of Alpine Rock's legal right to enter the site to conduct mining and reclamation operations by October 31, 2006. 2.J PROBLEM; The operator committed to performing water quality monitoring on a three time per year basis (spring, summer and fall) at locations upstream and downstream of the mining operation. The parameters to be monitored include; Total Phosphorus (mg/1), Ortho Phosphorous (mg/1), Total Suspended Solids (mg/1), pH and Chlorides (mg/1). All information gathered on water quality monitoring was to be submitted to the Division in the annual reports. CORRECTIVE ACTIONS; The operator will need to submit all of the groundwater monitoring data since the permit was issued on or before October 31, 2006. DATE PB or PV:PH TOPIC (S):NP October 31, 2006 PB or PV:PB TOPIC (S):HH October 31, 2006 PROBLEM; PB or PV:PB A stipulation was placed on the mining permit as a Condition to TOPIC (S):TS the permit. The stipulation states that by March 1, 1994 the October 31, 2006 operator shall submit a letter to the DMG describing its efforts to explore the use of coat effective soil amendments at the Swan River Resource Pit and report the results of these efforts to the Division. CORRECTIVE ACTIONS; Alpine Rock will need to address the stipulation and respond to the Division on or before October 31, 2006.