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(Page 2) <br />MINE ID # OR PROSPECTING ID # M-1997-032 <br />INSPECTION DATE 6/18/09 INSPECTOR'S INITIALS RCO <br />OBSERVATIONS <br />This inspection was performed by the Division as part of its monitoring of Hard Rock/Metals 110d permits, and due to a request <br />by the BLM for a joint inspection. The operator was contacted to arrange a time for the scheduled inspection. The operator's <br />representatives named on page one were present during the inspection. Also present was Barney Buria of the Montrose office <br />of BLM. There was no mining activity occurring at the time of the inspection. <br />The site was properly identified by the required permit ID sign and the permit boundary was clearly marked by white markers. <br />All existing disturbance was inside the boundary. All the previously observed structures are still present, though they were not <br />locked or secured. <br />Vandals recently damaged an electrical transformer and other equipment, and removed all of the copper electrical lines that <br />could be stolen, including pulling them out of the hoist motor, switch boxes and underground cables. The damaged facilities <br />will be difficult to repair, but otherwise did not cause lasting problems. The primary item of interest related to the vandalism was <br />the oil-contaminated soil where the electrical transformer oil was spilled. (The transformer was a non-PCB type.) The operator <br />had been aware of the spill soon after it occurred, and had responded appropriately. About 5 gallons of oil had been spilled. <br />The oily soil had been dug up and found to extend about one-foot deep. It was spread out and tilled to enhance the weathering <br />and aeration to break it down. This will be repeated again in the fall. The operator removed the other five transformers at the <br />site,and there was no damage to them. The operator had provided a written report of the incident and clean-up. This office is <br />satisfied that the damage has been abated. <br />Most of the site exhibits a stand of crested wheatgrass and rabbitbrush, with few other species. The topsoil stockpile is present <br />and does not exhibit erosion, though it does contain a noticeable amount of redstem filaree (an annual weed) with the crested <br />wheatgrass. In the area between the hoist building and the headframe is a new stand of Russian knapweed, estimated to be <br />about 600 sq ft. It is thin and does not contain the old stems indicating past years of infestation. This is a State-listed noxious <br />weed and is required to be controlled. The operator already has a weed control plan for this site, and stated that the site will be <br />treated soon. The presence of this patch is not a problem, since it appears to be new, and since the operator responsibly <br />monitors and treats such weeds. This area, however, will be inspected in coming years to ensure that it is being controlled. <br />Since this patch is so new and small, the goal should be to eliminate it before it spreads. Weed control activities should be <br />included in the annual reports. <br />The stormwater control berms and catchments appear intact and functional. They should be inspected regularly to ensure that <br />the design capacity is maintained. <br />The area of the single venthole was also vandalized, to steal the copper cable. The vent fan was still in place on the concrete <br />collar, but the cables and electrical panel were damaged. The damaged did not extend beyond the limits of the approved <br />affected area. <br />No problems and no further items were observed during the inspection. Responses to this inspection report should be directed <br />to the Division of Reclamation, Mining and Safety, 691 County Road 233, Room A-2, Durango, Colorado 81301, Attn: Bob <br />Oswald; phone no. 970-247-5193. (Please note this new address and update your records as needed.) <br />I & E Contact Address <br />NAME <br />OPERATOR <br />STREET <br />CITY/STATE/ZIP <br />Christy Woodward <br />Denison Mines (USA) Cor <br />105017 th St., Suite 950 <br />Denver, CO 80265 <br />cc: Steve Shuey, DRMS <br />? CE <br />? BL <br />? FS <br />? HW <br />? HMWMD (CH) <br />? SE <br />? WQCD (CH) <br />? OTHER <br />Cc: Jim Fisher, Denison Mines, PO Box 160, Egnar CO 81325 <br />Randy Marsing, Denison Mines, PO Box 160, Egnar CO 81325 <br />Barney Buria, BLM, 2505 S Townsend Ave., Montrose CO 81401