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(Page 2) MINE ID # OR PROSPECTING ID # MM-197 INSPECTION DATE 6123105 INSI~ECTOR'S INITIALS RCO OBSER This inspection was performed by the Division as part of its monitoring of Hard Rock & Metals 112, permits. The operatorwas nspection aThe inspection included cell perm lted areas on thetRed Moundtain Plant port on in Oura / Coanty, an d lal pareas n the Pandora Mill and Telluride tailings portion in San Miguel County. The permitted area is in final reclamation. Discussion during this inspection of the operator' I oved reclamaton plan The numerous items that the operator intends to perform, but that do not conform to the currently-app' deseablt y of leavi g certain spec fie structures on~helsit sll Not all fssueshof he poss ble reclamation plan a?e resolvedlat this the permi h This should be done soont sothat f naareclamation may prolceed and stal remial bena~'ifo ma'nce with the approved plan (as revised). At this time, there is no conflict with the reclamation being carried out and the existing approved plan. Red Mountain Plant Area This portion of the permitted area contains numerous building structures, the Treasury Tunnel portal, concrete foundation o a several yelarse incudingeemopal oflunused and unstable struuctures, regmoval of debris and contam nantsl and placemept of clean rock fill on affected areas to improve drainage. Several structures still P dsthe modulamat he north s de of the area~and during this coming year, including a small steel storage building on the dump p possibly the concrete ore handling structures (if they are found to be unstable). The concrete orf; structures are currently used for storing drum enlevel structures w9lhmostly rema'nratthensiee for future) polstl m sling (nonlrn'ininlg)eusel or h'storic value, value. The upp including the snow shed over the Treasury's tracks, the shop and storage buildings, and the elevated trest e. buriedan place.nNume olus~temstof steelhwood and concdrete debris stillamust bebemoveld prior to ba kfilli gl and g adiPg. Somer of he d amp scopes on the9 ai ealstl s'der facing the natural d ainagewayhare ttoo steep and mustlbe pulled back t ensure stability. All wood, metal and concrete debris in those east dumps must also be pulled back from the drainageway and properly disposed of. Some dumped cores are among that debris, and will be removed. The pump house adjacent to the creek, southeast of the main pad area, is still present and functional. It will be maintained and remain on the site. const ucfon and c rider block construe on) as well asha o demulnperm fled magaz~ines(loglamstruction)e All th eeoof these structures will be demolished and removed from the site. They have not contained explosives In several years, and are empty now. Pandora Mill and Telluride Tailings Area The area contains several structures including the mine office, manager's residence, portal, snow shed, carpenter's shop, mi building and its associated facilities, plus roadways, buried pipelines, infiltration ponds, six re/egetated tailings ponds, and a new tailings disposal area (approved under TR-01). The approved reclamation plan is different from the reclamation that the operator presently wishes to implement. The existing approved plan specifies that all surface structures will be removed (except for the discharge conveyance and impoundments). The operator wishes to leave the mine office and the residence, which are both in good condition and currently utilized. The signifi cant amount of surface track has eento n up and the pae of rails will beremoved If omrthe site aDiscussions have been ongoing with local government offices regarding the final disposition of the mill building grid associated structures. If the decision is made to leave the mill, several other adjacent structures may remain as well. If it is to be removed, it will betaken down to the concrete stem walls, fractured, backfilled, and buried in place. Currently there is no milling circuitry or contaminants in the building. The infiltration ponds are in good condition and functioning. The series of ponds exhibits a gradation of colorfrom yellow-green