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(Page 2) MINE ID # OR PROSPECTING ID # M-1986-076 INSPECTION DATE 10/24/06 INSPECTOR'S INITIALS RCO.KAP.AJW.DAB This partial inspection was performed by the Division as a follow-up to its prior inspection (datedl0/5/06). The operator was contacted about the scheduled inspection, but was not present onsite during the inspection. The site was secured and not active at the time of the inspection. The required permit ID sign was observed posted at the entrance to the permit area. The permit area corners were marked by signs mounted on steel T-posts. All activity appears to be within the boundaries. There are numerous underground openings throughout the permit area, but all are caved shut, and all activity is carried out on the surface. The mill building was locked and the surrounding area was orderly. Features that were inspected and discussed include: the integrity of the concrete stem walls of the mill building, and the evidence of undermining of the southern side of the building from sloughing of the cut slope for the access road. It has been suggested to the operator that he investigate a combination of driven or "planted" anchors, timber cribbing, larger angular boulders, or other type of revetment, in addressing this issue, before it becomes a problem. Other features outside the mill building were observed and discussed, including: the steel tank for storing water for milling needs, the diesel tank behind the mill, which has secondary spill containment and a cover for keeping precipitation out, the ore hopper and conveyor which is also to reduce exposure to weather. The tailings sump outside the east end of the building was fairly empty, apparently having been recently cleaned out. It is unlined and intended to allow dewatering of the neutralized tailings before their placement in the tailings pond. The approved plan requires that the tailings be completely neutralized before being introduced to the sump, and the operator must ensure that this is the only way the milling proceeds. (Note: The operator was met by the Division inspectors a few minutes after this inspection ended, down near the La Plata River bridge at the bottom of the access road. The method of neutralization utilized by the operator was discussed with the operator, and consists of additions of chlorine to the tails slurry as it is angered out to the tails sump. The chlorine lowers the pH of the tailings slurry to 7, and along with the residence time in the sump, is considered a practical method of cyanide neutralization. During processing the operator monitors the pH four times daily. These details are consistent with the approved environmental protection plan.) The mining area east of the mill was discussed onsite. As mining proceeds up the hill slope or deeper into the hill, there has been recent failure of the topsoil and loose rock above the ore being mined, resulting in damage to topsoil. This condition was previously noted as a problem, and the operator has subsequently responded with a written discussion of how the mining and topsoil salvage will be modified to ensure adequate topsoil protection and slope stability. This office will review the operator's 11/6/06 letter to determine if the proposed change is adequate and/or requires a technical revision. The operator's 11/6/06 letter does act to correct the problem noted in the Division's 10/5/06 inspection report. At this time there is no further problem noted for the topic of topsoil. Mining equipment and other features previously noted on the various bench levels of the site are still present. The mining location, crusher and tailings pond were viewed from the upper bench near the mill. The lower portal was not viewed or inspected. No further items were observed during the inspection. Responses to this inspection report should be directed to the Division of Reclamation, Mining and Safety, 701 Camino del Rio, Room 125, Durango, Colorado 81301, Attn: Bob Oswald; phone no. 970- 247-5193. I & E Contact Address cc: Tony Waldron, DRMS NAME OPERATOR STREET CITY/STATE/ZIP James Bender DGMC 5529 US Hwv 64 Farminoton. NM 87401 ^ CE ^ BL ^ FS ^ HW ^ HMWMD (CH) ^ SE ^ WOCD (CH) ^ OTHER