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Mr. James Cowart December 17, 1997 Page 7 3. Section 3.2 of the Conceptual Reclamation Plan discusses removal of tailing from the mill thickener tank to the tailing pond, and discusses washing down the mill building interior. Prior to undertaking either of these operations, the operator must assure that loss of containment of the thickened tailings or of the wash water will not occur. Specifically, there have been problems with leaking at an access panel located at the low end of the mill. The integrity of this panel must be assured prior to commencement of mill washing operations. There have also been problems with piping of tailings from the mill building to the tailings pond. The integrity of the tailings distribution system must be assured prior to thickened tailings transport. If some other tailings transport system is to be used, the Division must be assured of the veracity of any proposed system prior to initiation of the operation. The Division must be notified by the operator when prepazations for thickened tailings removal and mill washing are completed so that a site inspection can be conducted prior to initiation of the operations. 4. It is stated in section 3.3 of the Conceptual Reclamation Plan that approximately 1,500 cubic yards of tailings are presently stored in the pond, and that the pond has a capacity of approximately 2,500 cubic yards. It must be reiterated that any capacity present in the pond at this time is freeboard needed for storage of process and storm water. There is no remaining capacity in the pond for the storage of tailing. As such, prior to transference of thickened tailing currently stored in the mill to the tailing pond, the operator must provide a demonstration that freeboard requirements will not be compromised. 5. It is stated in section 3.3 of the Conceptual Reclamation Plan that the pond is Hypalon lined. The liner in the pond is high density polyethylene. 6. It is stated in section 3.3 of the Conceptual Reclamation Plan that the pond depression will be filled with material from useable waste rock piles within the permit area. The operator must be advised that the permit azea boundaries do not coincide with Colina Oro Molino land ownership boundaries, and that portions of the permit area aze on land owned by Mi Vida Enterprises. The tetras of the approved permit make it very clear that the right to enter Mi Vida property does not include the use of the waste rock piles, some of which, Mi Vida contends, may contain gold values. 7. It is stated in section 3.1 of the Conceptual Reclamation Plan that Hazel-A water quality is appropriate for land application, and has been approved for such within the permit area. It must be reiterated that land application of Hazel-A water was approved on an interim basis with on-going quality testing. Land application was approved to forestall the less desirable results of dam overtopping or unpermitted process water release. Land application is to be used only when spray evaporation is not able to keep pace with tailing pond inflows. 8. It is stated in section 3.7 of the Conceptual Reclamation Plan that post closure ground water monitoring will be conducted on a quarterly basis for one year. Given the dearth of baseline ground water quality data available for the site, and Colina Oro Molino's continuing failure to comply with