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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-1977-215 <br />INSPECTION DATE 5/6/08 <br />INSPECTOR'S INITIALS RCO, AJW <br />OBSERVATIONS <br />This inspection was performed by the Division as part of its monitoring of Hard Rock/Metals 112 permits. The operator's <br />representative was contacted about the scheduled inspection, and the representative named on page one was present during <br />the inspection. This was a partial inspection, since not all parts of the permit were inspected. The site had no snow on it, <br />allowing full inspection of all portions of the permit visited. <br />The permit was transferred recently to Emerald Mining and Leasing, LLC, and part of the transfer involves this office assessing <br />the level of disturbance at the site which must still be bonded. There is a sufficient amount of bond presently, given the <br />advanced degree of reclamation that has been adequately performed toward the fulfilling the existing approved plan. No <br />complete bond recalculation is being done at this time due to the imminent possibility of revised plans being submitted, which <br />will require a full recalculation at that time. <br />The site had been in final reclamation for several years following mining activity, and during recent years the site was in <br />temporary cessation (though water monitoring was being performed). During those years, since there was no mining activity <br />which could possibly involve excursions of activity outside the permit boundaries, marking of the permit boundaries was not fully <br />checked. With the approval of TR-13 (returning the permit to active status, and possibly a new mining or reclamation plan) the <br />operator must endeavor to locate and ensure that the boundaries are marked. These might not be marked presently, but this is <br />not noted as a problem at this time., but the boundaries must be marked in a durable and visible manner. <br />Overall, past reclamation has proceeded well, with most areas of past disturbance requiring little to no additional reclamation <br />work. The gulch diversion structures are being monitored, and noxious weeds are noted and treated as needed. <br />Area A: Features at the 9360 level pad was inspected. High flows in Windy Gulch are well contained by the diversion and <br />cutoff wall. Monitoring wells are still capped, and may be reused if recommenced activities require such. The portal location is <br />rock-covered and dry. Pad revegetation is well-established. The 9700 level area was not inspected. The mill site was well <br />reclaimed (with the office building still onsite, as the plan is currently approved). <br />Area B: The old tailings pond and dam were viewed from a distance, and considered to be well reclaimed. <br />Area C: This area is comprised solely of the access road down to the new tailings pond. The road is stable, exhibiting good <br />drainage and no shoulder erosion or weeds. <br />Area D: The new tailings pond and dam, which involved recent disturbance and reclamation, were closely inspected and found <br />to be nearly fully reclaimed (small areas of the pond surface and dam top still needed more revegetation). <br />Area E: This area was not inspected, though it was found in a past inspection to be fully reclaimed. <br />Area F: This area was not inspected, and is not believed to have been disturbed under this permit. <br />There are no changes currently filed to the approved mining or reclamation plans. The operator should submit all changes for <br />review priorto implementation. This may involve additions of new land areas, construction of new buildings or roads, opening <br />new portals, processing ore or tailings in some manner. If there are questions the operator is encouraged to contact this office. <br />No problems were noted during the inspection. No further items were observed during the inspection. Responses to this <br />inspection report should be directed to the Division of Reclamation, Mining and Safety, 701 Camino del Rio, Room 315, <br />Durango, Colorado 81301, Attn: Bob Oswald; phone no. 970-247-5193. (As of 10/22/07 we have a different room number. <br />Please revise your records as necessary.) <br />I & E Contact Address <br />NAME Brian Egolf <br />OPERATOR Emerald Minin and Leasing, LLC <br />STREET PO Box 628 <br />CITY/STATE/ZIP Creede. CO 81130 <br />Cc: Zeke Ward, PO Box 138, Creede, CO 81130 <br />Tristram Post, USFS, 13308 W Hwy 160, Del Norte, CO 81132 <br />cc: Tony Waldron, DRMS <br />? CE <br />? BL <br />? FS <br />? HW <br />? HMWMD (CH) <br />? SE <br />? WQCD (CH) <br />? OTHER