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Battle Mountain Resources Inc. San Luis Project Permit No. CO-0045675 Compliance Schedule Report July 25, 2002 Page 4 custody and order form instructions to complete the analysis per rush status. Receipt of the first verification sampling results were received Monday morning, July 15, 2002. These first verification sampling analytical results identified a Dissolved Iron concentration (0.13 mg/1) below the applicable water quality standard in the Rito Seco and a Dissolved Manganese concentration (0,75 mg/1) remaining elevated above the applicable water quality standard in the Rito Seco. Verbal notification of the first verification sampling analytical results were made with the WQCD via Ms. Lenkey's voice mail the morning of July 15, 2002. This voice mail message identified the first verification sampling analytical results and BMRI's planned schedule to implement further requirements of the Compliance Schedule. b) If the results of the first verification sample indicate that the concentration of one or more constituent exceeds the applicable water quality standard in the Rito Seco, the permittee shall complete the activities described in Paragraph 7(c). c) Within 3 calendar days of permittee's receipt of the first verification sampling, the permittee shall initiate the following measurements and observations to establish whether (i) [he groundwater flow direction is from the Rito Seco alluvium toward the West Pit, (ii) there are seeps along the north bank of the Rito Seco between the area of historic seepage and RS-2, and (iii) the average groundwater table elevation in the downgradien[ alluvial capture system (M-32 and M-33) is equal to or below 8540 ft. amsl. The results of these observations shall be transmitted in a report to WQCD within 14 days of completing all measurements and observations described in this paragraph. A separate compliance schedule activity may be required under Sections A.S.(3), A.5(5) and A.5(6) if any of these inspections or measurements indicate conditions of the groundwater system that are not consistent with the terms and limitations set forth in this permit. Weekly monitoring at RS-2 shall continue if any of the three conditions in this paragraph are met. The morning of July 15, 2002 a seepage inspection and collection of groundwater elevation measurements were completed. The seepage inspection was conducted along the north bank of the Rito Seco initiating at the historic seepage area and concluding at the RS-2 surface water monitoring station. The results of the inspection identified no visible seepage expressions along the northern bank of the Rito Seco in the area identified above. Groundwater elevation measurements were completed of all groundwater monitoring or pumping installations identified in Section 1 of the permit. These groundwater elevations measurements as identified below in Table 2 were transmitted to Telesto Solutions, Inc. for preparation of a groundwater potentiometric surface map and determination of the groundwater hydrologic flow gradient. In addition, groundwater elevation measurements completed on June 11, 2002 as identified in Table 2 below were transmitted to Telesto Solutions, Inc. for preparation of a groundwater potentiometric surface map and determination of the groundwater hydrologic flow gradient. Preparation of the groundwater potentiometric surface maps and determinations of the groundwater flow gradients associated with the two sets of data was completed by Telesto Solutions, Inc. on Tuesday, July 16, 2002. The results of Telesto Solutions, Inc. evaluation identified that both sets of groundwater measurement elevations