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(Page 3) <br />MINE ID # OR PROSPECTING ID # M-1984-043 <br />INSPECTION DATE 07/17/2009 <br />INSPECTOR'S INITIALS PSH <br />The Jesse Lee site consists of a road leading into the site, the pit area, product storage areas and two <br />sediment ponds in the southern section of the site. No mining was taking place during the inspection, <br />however evidence of recent mining activity was observed. Maintenance on the processing plant was <br />occurring during the inspection, a large crescent shaped stockpile of recently crushed material was observed <br />east of the processing plant and evidence of recent mining activity was observed in the northwest corner of <br />the highwall. The current highwall excavation consisted of two 5 to 10 foot high benched areas within Phase <br />3 of the conversion area. <br />The Operator's 2008 annual report states mining operations are ongoing at the site and 13,000 tons of <br />materials aro ovtra?torr] di`winaa )on7 <br />Based on the Operator's 2008 annual report and the inspection observations, the Division believes a <br />possible violation has occurred at the Jesse Lee sit. The Operator failed to comply with the August 16, 2006 <br />Board Order by completing the conversion application process and has violated the Cease and Desist Order <br />by continuing to mine outside the original permit boundaries. The Division will schedule this matter for a <br />hearing before the Board. A notice of possible violation and information regarding the Board hearing will <br />be sent under separate cover. <br />The permit states the pit is de-watered by a diversion ditch that carries water around the pit and into the <br />sediment ponds in Phase 1. The conversion area will require reconstruction of the diversion ditch further <br />west. The new ditch will run to the same sediment ponds. The de-watering ditch was not observed during <br />the inspection. It appears the operator has mined through the existing ditch and has not constructed the new <br />ditch as required in the permit. Surface water was flowing across the pit floor surface from a spring in the <br />northwest corner of the excavated pit toward the sedimentation ponds to the southeast. The water <br />appeared to flow toward the lower two sediment ponds where it eventually discharges into the Arkansas <br />River. As noted in the previous inspection report, the operator may be required to obtain a National <br />Pollutant Discharge Elimination System (NPDES) Permit from the Colorado Department of Public Health and <br />the Environment (CDPHE) because mining related water is discharging from the sediment ponds. The <br />operator must contact the CDPHE in regards to the need to obtain a NPDES permit for the mine site. To avoid <br />a possible violation, the operator must, within 30 days, provide the Division with proof of the diversion <br />ditch construction and documentation that CDPHE has been contacted regarding the requirement for an <br />NPDES permit. <br />An entrance sign was posted and permit boundary markers were observed as required by Rule 3.1.12. <br />I & E Contact Address <br />NAME <br />OPERATOR <br />STREET <br />CITY/STATE/ZIP <br />cc: <br />? CE <br />Mr. Scott Pelino ? BL <br />Pelino, Inc. ? FS <br />33551 CR 361 ? HW <br />Buena Vista, CO 81211 ? HMWMD (CH) <br />? SE <br />X WQCD (CH) <br />? OTHER