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lPage 21 <br />MINE ID # OR PROSPECTING ID # <br />INSPECTION DATE 8129197 <br />M~6-076 <br />OBSERVATIONS <br />C~ <br />INSPECTOR'S INITIALS WHE <br />This inspection occurred as part of DMG routine monitoring schedule. The Incas Mine is a 110d <br />type permit and is approved for 9.94 acres affected area. Approved activities include surface and <br />underground extraction of gold and silver ore, on-site processing and milling, and disposal of tailings <br />and overburden. Bob Hill and Jim Long accompanied the DMG inspectors throughout the <br />inspection. Operations were active during the time of this inspection. DMG holds 540,358 <br />financial warranty. Records indicate that the permit area is located in an area of previous mining <br />disturbance. <br />Signs & Markers -Mine identification sign, required by Rule 3.1.12(1-, was posted. Public access <br />is controlled by multiple locked chains across the access road. All permitted mining activities <br />appeared to be contained within approved areas. <br />Facilities -Permitted mining activities appeared limited to surface excavations on a steep slope <br />outcrop of mineralized veins. Operator stated that ore bearing veins occur in sandstone and <br />limestone strata, gold and silver occur in low concentrations, significant concentrations of pyritic <br />materials and additional metals absent, acidity of mined materials in the range of pH 7 and 8. <br />Two excavated areas appeared previously disturbed and were estimated at 30'W * 40'D * 30'H, <br />each. Small jaw crusher, hammer mill, ball mill and two structures (10'W * 10'L) were located at <br />the mouth of one of the excavated areas. Metallurgical processing circuits were located within two <br />10'* 10' structures. Two 10' 10' structures were recently constructed with wood/metal walls <br />and roof, with concrete stem wall foundations. Concrete stem walls, woodfinetal walls and roofs <br />were intact. Structures appeared to be located away from avalanche path and landslide hazards. <br />Milling equipment appeared custom designed and assembled for small operation. Tailings, created <br />from permitted operations, appeared to be less than 1 cubic yard. <br />Hydrologic Balance -Operator is current with surface and groundwater monitoring schedule. <br />Evidence of excessive erosion or adverse impact to hydrologic balance was not observed. <br />Revegetation -Operator is conducting research on soils productivity, associated with University of <br />Illinois, Agricultural Department. Operator desires to apply results of soils research to revegetation <br />efforts of mine tailings. <br />I & E Contact Address <br />NAME Bob Hill <br />OPERATOR Daedwood Gulch Mining Co. <br />STREET P.O. Box 96 <br />CITYlSTATEIZIP Hesorus. CO 81326 <br />cc: Tom Gillis, DMG <br />^ CE <br />^ BL <br />^ FS <br />^ HW <br />^ HMWMD ICH) <br />^ SE <br />^ WOCD (CH) <br />^ OTHER <br />