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PERMIT #: M-1987-012 <br />INSPECTOR'S INITIALS: RCO <br />INSPECTION DATE: August 12, 2010 <br />OBSERVATIONS <br />This was a routine monitoring inspection. The site was active on the day of the inspection: excavation, screening and <br />crushing were occurring. Stockpiling and hauling was also observed. The operator Ralph Martinez was contacted prior to <br />the inspection but was not able to be present. Other operator's representatives were present onsite: Steve Yohn was <br />supervising the installation of a scale onsite, and Corey Langford was running the crushing operation. This inspector <br />spoke with Mr. Yohn about the onsite activities. Overall this active, busy operation was found to be very orderly and <br />clean, with a minimum of debris. <br />(AT) Acid And Toxic Materials: <br />Narrative: The fuel and other hydrocarbons that are stored onsite for the equipment were stored in tanks placed within <br />steel pans, constituting impermeable secondary containment, as required. There was no contamination noted. <br />(BG) Backfilling and Grading: <br />Narrative: The south pit has been partially sloped to 2:1, as part of the required temporary stabilization of the pit, until it <br />is reactivated and expanded. Further slope grading (to 3:1) will be needed when the slopes are reclaimed. Active <br />excavation was being carried out in the north pit and along the boundary of the central part of the permit, but those were <br />vertical highwalls created by wheeled loaders. As a note to the operator, the temporary 2:1 slope grading helps not only to <br />stabilize the pit slopes but helps to minimize the reclamation earthwork costs, and should always be implemented between <br />episodes of excavation. <br />On that subject, it was noted that a limited amount of bank material from the toe of the sloped E wall of the south pit has <br />been removed, leaving the slope unsupported and possibly destabilized. The operator should place new material there <br />promptly and avoid removing this material in the future. This is not a slope in its final configuration, and this is not a <br />problem at this time. <br />There is an upland drainage that enters the south pit at its SE corner, as uncontrolled run-on, and it is gullying the slope <br />deeply. As the pit expands or approaches final reclamation there, this feature should be addressed so it doesn't affect the <br />pit reclamation. This is not a problem presently. <br />(FN) Financial Warranty: <br />Narrative: The bond is $216,866. It was calculated to be sufficient to reclaim the site at the end of mining. This office is <br />scheduled to review the figures soon. If an increase is needed, the operator will be notified. The operator should clearly <br />describe all mining and reclamation activities in the annual reports. <br />(MP) Gen. Compliance With Mine Plan: <br />Narrative: All activities and disturbances observed comply with the mine plan. Equipment operating at the site included <br />screen and crusher, Cat 988 loaders, scale and scalehouse (being installed at-grade, a safer condition), storage tanks, <br />conveyors, belly dumps, other loaders and backhoe. <br />(PW) Processing Waste: <br />Narrative: There was a large amount of fines created by the processing, all of which were bring placed in the tall <br />stockpiles along the western edge of the pit. This material is to be replaced as a layer under the topsoil and used as the <br />subsoil growth medium during final reclamation. The operator is cautioned to keep the stockpiled fines (and subsoil) <br />separate from the topsoil. <br />(RS) Reclamation Success: <br />Narrative: Other than interim grading, there is no reclamation performed. <br />(RV) Revegetation: <br />Narrative: No infestations of noxious weeds were noted. The operator must ensure that the site is regularly monitored <br />and treated as needed. <br />Page 2 of 3