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(Page 2) M{NE ID # OR PROSPECTING ID #: M-1977306 INSPECTION DATE: 3/24/05 OBSERVATIONS INSPECTOR'S INITIALS GRM This inspection was conducted as part of the normal monitoring program established by the Colorado Division of Minerals and Geology. The JD-6 and associated Mineral Joe Claims, JD-8, JD-9 and the Wright Group / SM-18 Mines have begun mining operations after a lengthy period of minimal activity. The Division of Minerals and Geology is inspecting the referenced sites in conjunction with permit reviews to ensure that permits meet current standards for metal mining activities. No problems or issues will be noted within this report specifically as any concerns will be addressed through the permit review process for each site individually. The JD-9 Mine is the most complex of the mines noted above. The main entrance is in the Bull Canyon area of Monogram Mesa. The JD-9 has a shaft at the top of the mesa that is an emergency escape way as well as the point where water from the under ground working is pumped for treatment and de-sedimentation prior to release down the canyon. For clarity, this report will break down the observations into the shaft area and Mine Entrance azea. The Main Mine Entrance Area has a permanent building for equipmentmaintenanee and supply storage. Several ~ - -. loaders and mine equipment were noted in use or pazked in this azea. The onsite fuel tanks are in proper secondary containment constructed of earth berms and thick plastic. The area azound the building is free of debris'and well maintained. (Photos 2 and 5) Waste from current activities is being gobbed or backfilled into old workings to reduce haulage expenses and reduce surface impacts. Established waste piles have been graded on the top but slopes are not impacted at this time. The slopes are stable with only minor riling noted. Some mine debris was observed over the slope edge, which should be cleaned up as much as possible. A 36" culvert• runs- through the waste pile where water from the dewatering process passes. This culvert directs the water through the pile.while minimizing contact with the waste. 'The natural drainage then carries the water along the toe of the waste piles and then down gradient: (Photos 1,2 and 3) ` ~ - ;some ore has been brought to the surface for stockpiling. •°The operator stockpiles ore until there is enough far ' several loads. ?,t which point, the stockpile is removed and the.process started over. Overall, ore stockpiles at any_• sites remains for only short periods of time prior to shipping: Berrrisai'ound theatockpile area prevent; stormwater. ~ ~, fortn;escaping into ;undesirablep1aces. (Photo 4) i~a:~.':E"r„1..? ~ ~.?<ir :;_-:--~; ' . ~ ~; .-e-^ ":: ..r~ The Emer ency Shaft /Water Treatment Area has a head •frame and•2 small sheds on site. The sheds house the :~'.~;ii: pump§~and water treatment tanks. The inspector watched as Mr. Williams added barium chloride to one of the ' ' tanks. The water from the tank goes into a preliminary settling pond and then down to a secondary pond prior to release. The primary pond is noted as beginning to be silted up. (Photos 10,11) The liner above the water line is ' also beginning to show signs of deterioration along the free board of the pond. The secondarypond is in much better shape. (Photos 6,7,8 and 9) It should be noted that the operator has already built new ponds just to the west of the current ones. The only part missing is the installation of a liner prior to activation. This pond construction was part of an amendment a few yeazs ago. (Photos 13,14) CDWQ has an active dischazge permit that requires submittal of monthly samples to monitor water quality. There were no observed fuel tanks or storage of petroleum products noted in this azea. This area is somewhat isolated from general workers so housekeeping isn't great but not an issue of concern either.