2009-08-31_INSPECTION - M1994117

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• MRV plumbed water to drill sites as described below. These hoses, etc. may have, at times, been abandoned and left for future uses. As stated in this section, these have largely or completely been removed so as to clarify the situation for the DRMS, CDPHE & EPA. Please refer to the Cash Mine well photos in Appendix I. The 2-inch line goes directly to the mill tailings pond. There are two (2) one inch lines that I was installing personally on July 22, 2009, which form a loop at our next proposed diamond drill site. Typically a closed circuit, one hose takes water from the well to a proposed piping arrangement which would allow the drillers to tap off water for the drill tanks as required (200 + or- gallons) with the second hose returning to the well all unused water. This is the system we used the last couple of years. I did not complete this installation at the request of yourself, as you had some issues to discuss relative to our diamond drilling. We will have this discussion prior to MRV proceeding with this. A matter of concern is the July 22nd date as it is very germane to this point. This is the date that I met Mark Williams; Water Quality Program Coordinator, Boulder County Public Health. He was responding to an "anonymous" complaint regarding an illegal discharge of water. I suggested he call you to get the name of Mr. Anonymous, but as it turns out in a letter dated July 28, 2009 from Dennis W. Pontius the innominated was none other than Mark Steen. Mr. • Williams found one (1) gpm flow from the one (1-inch) line I had just installed for planned diamond drilling and tested by turning water into the hose to check for leaks. I had walked the hose, checking the joints, and then as I walked back to the wellhead along a road and trail to turn the pump off, Mr. Williams was inspecting the hose line. When he arrived at the discharge end of the hose I had already turned off the pump and the one (1) gpm flow was only drainage from the hose. I may have pumped water onto the ground but as Mr. Williams commented, "the pine needles weren't even wet". Beyond this inconsequential, infinitesimal and finite amount, no water was discharged. We vehemently deny this allegation that we conducted an "Unpermitted Industrial Wastewater Discharge to Groundwater and Surface Water." Other hoses are the one (1) inch tailing disposal line from the mill to the upper adit escape way which is currently unconnected and a one (1) inch water line to the lower or 3`d level escape way for drill water if required for drilling purposes and dust suppression. I have put a connection into the drill line whereby we can divert water into the sump below the 3`d level escape way. This is sometimes necessary in the winter months when there is no natural inflow to the upper mine workings. The significance of connectors within a segment of line, and their particular location is unknown to MRV. It is unclear what Steen's allegations are in regards to these connectors.