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(Page 2) <br />MINE ID *OR PROSPECTING ID # M-1988-112 <br />INSPECTION DATE 5/7/08 INSPECTOR'S INITIALS WHE <br />OBSERVATIONS <br />This inspection occurred as part of the Division's review process of Amendment No. 3 (AM-03) and to <br />observe the Operator's water sampling procedures and to procure split samples for. independent <br />analysis. This report is accompanied by a portion of Figure C-1 from AM-03, modified to illustrate the <br />sample locations, twelve photos and copy of the analytical report from the independent laboratory. <br />A total of eight samples were taken from seven locations. Surface water samples were procured <br />from the Rito Seco upstream of the West Pit at RS-1 and downstream of the West Pit at RS-2. <br />Ground water samples were taken from the backfilled West Pit at BF-4, down-gradient of the tailings <br />pond at M-12, down-gradient of the mine site and up-gradient of the proposed irrigation area at SLM- <br />1, down-gradient of the proposed irrigation site and up-gradient of the Town of San Luis at SLM-2, <br />and at the Town of San Luis well number 11606-F. According to Figure G.4-1 of AM-03, monitoring <br />well SLM-2 is 320 feet deep and is screened at 300-foot depth and at 90-foot depth. Therefore, two <br />samples were taken at SLM-2 and are designated as SLM-2A, taken at 300-foot depth, and SLM-213, <br />taken at 90-foot depth. <br />The Operator conducted the sampling and provided the Division with a split of the sample at each <br />location. The Division's sample bottles were previously prepared by an independent laboratory. <br />Each of the Division's samples included two bottles, one prepared specifically for WAD cyanide and <br />the second for dissolved metals. The Division's samples were immediately placed in a cooler with ice <br />and remained either on ice or in a refrigerator until delivered to the laboratory. The samples were <br />procured on May 7th and were delivered to the laboratory on the following day, May 8th <br />Field parameters were measured at each sample location by the Operator with YSI 55 and Oakton <br />Waterproof meters. Field parameters for each sample location were as follows: <br />Sample ID Temp. in <br />Celsius EC pH Dissolved <br />Oxygen Time <br />[AS-1 surface 3.9 138.1 7.87 9.90 0920 <br /> 3.9 138.1 7.91 9.50 0925 <br />RS-2 surface 5.0 144.1 8.04 9.67 0940 <br /> 5.1 143.7 8.03 9.51 0945 <br />M-12 GW well 10.9 342 7.83 7.78 1105 <br /> 10.9 341 7.81 7.65 1120 <br />BF-4 GW well 10.0 952 7.26 1.78 1200 <br /> 9.9 949 7.25 2.47 1205 <br />SLM-1 GW well 9.6 207 6.49 8.77 1325 <br /> 9.5 212 6.86 8.50 1330 <br />SLM-26 GW well 12.4 169 7.46 5.55 1410 <br /> 12.3 168 7.43 5.45 1415 <br />SLM-2A GW well 11.1 251 7.47 5.80 1430 <br /> 11.3 208 7.49 5.42 1435 <br />Town GW well 17.6 156 7.70 5.61 1500 <br /> 15.0 158 7.73 5.78 1505