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(Page 2) MINE ID # OR PROSPECTING ID #: M-1977-306 INSPECTION DATE: 4/5/06 INSPECTOR'S INITIALS GRM OBSERVATIONS This inspection was conducted as part of the normal monitoring program established by the Colorado Division of Minerals and Geology. The JD-9 MINE is located in Bull Canyon, on Monogram Mesa in western Montrose County. Cotter representatives Glen Williams and Dick White accompanied the inspector on site. Division staff members Chris Rowe, Rick Wenzel and Deb Gonima also were present. The mine identification sign and affected area boundary markers are in place and in compliance with Ruie 3.1.12. T-posts denote the permitted area around the mine site and the signs are located at the entrance off the county road. The adit entrance is gated and locked at this time. The mine has been active in the past 6 months, but due to Cotter's mill feasibility studies, production was halted for the near future. All ore stockpiled at the site has been removed and the stockpile area is graded to prevent stormwater run-off. Overall, the site grading is such that it minimizes erosion and directs flow to maintain on-site capture of precipitation. If the mine remains in an inactive state longer than this fall, the Division will require that the waste piles be smoothed out and reshaped. Currently the dump has multiple piles on the top that are unsightly and could cause a potential for sedimentation and erosion issue during the winter or major precipitation event. Also noted is some mining debris within the waste that will have to be removed or properly buried if the piles are graded out for a more permanent feature. The fuel storage tank is in secondary containment. It is noted that recent precipitation has partially filled the structure. If the current wet trend continues, Cotter should drain off the water. If it appears that the mine shut down is going to be for a prolonged period of time, the tank should be removed to a more secure location. A large industrial equipment battery is noted next to the entrance to the mine office. Although the battery is on a pallet, it is exposed to the elements, which will degrade the casing. The operator needs to remove the battery to ether an interior storage area or properly dispose of it off site. The battery is noted for follow up during the next inspection. The poly-pipe that carries treat water from the discharge pond is intact and water is being released below the waste dumps into the drainage. At the shaft azea, the inspector noted that the pumps were running and that no leaks in the untreated water going into the treatment building. The pond liners appear to be in the same condition as in previous reports. No evidence of leakage was noted. No problems are noted at this time. However, erosion control measures and fuel tank security are noted as issues of concern for future monitoring. Responses to this inspection report should be directed to Russ Means at the Division of Minerals and Geology, Grand Junction Field Office, 101 South 3rd Street, Room 301, Grand Junction, Colorado 81501, phone no. 970-241-1117. I & E Contact Address cc: ^ CE NAME: Glen Williams ^ BL OPERATOR: Cotter Corporation ^ FS STREET: P.O. Box 700 ^ HW CITY/STATE/ZIP: Nucla. CO 81424 ^ HMWMD (CH) ^ WOCD (CH)