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PERMIT #: M-1979-094-HR <br />INSPECTOR'S INITIALS: GRM <br />INSPECTION DATE: September 23, 2010 <br />OBSERVATIONS <br />This inspection was conducted as part of the normal program monitoring program of the Colorado Division of <br />Reclamation, Mining, and Safety (DBMS). DRMS inspector Russ Means was accompanied by Cotter Representative <br />Glenn Williams. The JD-7 open pit mine is a 112d-3 uranium mine located in Paradox Valley. The mine has intermittent <br />status and is currently on stand-by. <br />The mine identification sign and affected area boundary markers are in place and in compliance with Rule 3.1.12. The <br />sign is located at the main entrance. Permit boundaries located along the northeast side of the adjoining JD-7 <br />underground are not marked which is a separate permit. While identified by t-post in some areas in others it blends into <br />the overall mine area. At this time boundary markers are not considered a problem. <br />Currently there are no activities on site. Equipment is stored at the underground shop or inside the pit shop. The ore body <br />for this site has not been exposed therefore no known potential uranium issues are known. Highwalls generally appear to <br />be stable. There are a few areas on benches however that have had minor failures over the years that were previously <br />documented. No recent stability issues are noted. <br />No petroleum products, fuels, or other hazardous materials issues were noted or observed <br />No erosion or sedimentation issues were observed. The main pit floor area is very flat, and vegetated. <br />A stormwater control plan for the site directs flows to the west end of the pit. A diversion dam in this area directs flows to <br />the drainage that is on Cotter property. Waste dumps have minor riling and gulling but are stable with volunteer <br />vegetation. The inspector notes that a formal storm water control plan is lacking in the permit although measures are in <br />place. This is not an issue as the permit stands but must be incorporated into the pending Environmental Protection Plan <br />(EPP) and meet the specifications outlined in Rule 7.3.1(3)for a two year/24 hour event up to the Probable Maximum <br />Precipitation (PMP) event plus the ten year 24 hour storm event. <br />As noted above the area has substantial volunteer revegetation. The primary species is rabbit bush with some native <br />grasses. The revegetation while good is close to being a monoculture however, and does not necessarily meet any <br />approved reclamation requirements. No noxious or problematic weeds were observed. <br />DRMS holds a $39,000.00 bond for this permit. DOE records indicate that their bond for this site of 1,206,000.00. DOE's <br />bond also incorporates into the reclamation the underground permit area. The amount held by both agencies equals the last <br />bond liability of $1,245,000.00. A review of the bond is forthcoming and will be addressed by separate cover. <br />At this time the site meets the approved reclamation plans. However Cotter is advised that no work can be done on site <br />other than reclamation or general maintenance without an approved EPP. <br />Responses to this inspection report should be directed to Russ Means at the Division of Reclamation, Mining, and Safety, <br />Grand Junction Field Office, 101 South 3rd Street, Room 301, Grand Junction, Colorado 81501, phone no. 970-241-1117. <br />Inspection Contact Address <br />Glenn Williams <br />Cotter Corporation <br />P.O. Box 700 <br />Nucla, CO 81424 <br />Page 2 of 2