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PERMIT #: M- 1978-09 1 -UG <br />INSPECTOR'S INITIALS: RCO <br />INSPECTION DATE: October 28, 2010 <br />OBSERVATIONS <br />This was a normal monitoring inspection of this 110-d permit. The entrance was properly signed. The site was active at <br />the time of the inspection, with several underground personnel and surface personnel present. This inspection was limited <br />to surface features only. There was about 4-6 inches of new snow. The roads and pads had been cleared and there was <br />access to all areas. <br />(AR) Availability Of Records: <br />Narrative: The current onsite operator has a general knowledge of the mine operation, but he would benefit from having a <br />full copy of the current permit maps, approved mining plan, and reclamation plan (and possibly a copy of the stormwater <br />management plan too). The permittee should provide those materials to the onsdite operator. Onsite activities, such as <br />surface disturbance, clean-up and repair, seeding and weed control, should be tracked so that they may be properly <br />reported in the annual reports. <br />(AT) Acid And Toxic Materials: <br />Narrative: There is no seepage at the toe of the level 6 dump, and no water discharging from the level 6 portal. All fuel <br />and hydrocarbons are stored adequately in lined secondary containment, stored at the level 6. The operator should ensure <br />that water (from precipitation) in the pan under the tanks is regularly removed to maintain the capacity, or possibly place a <br />cover over the tanks and pan to prevent water from collecting there (especially during winter inactivity). No evidence of <br />leaks or spills of hydrocarbons was noted. <br />(BG) Backfilling and Grading: <br />Narrative: No backfilling or grading is being carried out on either level 3 or 6. Since most of the muck generated from <br />the level 6 workings are acidic and mineralized, and that material comprises much of the waste dump and current working <br />surface, it is important that the operator manage the surface muck to reduce the residence time of the water and minimize <br />the potential for leaching. Since water on the pad is mainly from precipitation or drained from the ore, the surface should <br />be graded to allow drainage toward a low point, such as near the berm along the gulch or toward the limestone riprap near <br />the pipeline. This will improve the working surface. Or, an all-weather surface may be put down by using clean fill from <br />the level 3 borrow material. Finally, the operator might want to consider a revision to install a concrete ore pad, to <br />prevent mixing of ore and pad material. <br />(CI) Complete Inspection: <br />Narrative: The pads and waste dumps at both level 3 and level 6 were inspected. <br />(EX) Explosives: <br />Narrative: Blasting is carried out regularly underground (level 6) to generate ore and advance the workings, but no <br />explosives are stored on the surface. <br />(FN) Financial Warranty: <br />Narrative: The bond is $100,042, and is considered adequate at this time. <br />(HB) Hydrologic Balance: <br />Narrative: There was no discharge to surface water of any groundwater originating in the mine, and no seeps below the <br />mine. Deadman Gulch was dry at the time of the inspection. The diversion structures approved under Amendment AM-3 <br />appeared maintained and intact. The grated inlet of the pipeline was clear, and the limestone riprap was in place. There <br />was some sediment accumulatuion in the pond at the lower end of the pipeline which should be removed as soon as <br />practicable (considering the terrain, ground conditions and access limitations). The groundwater generated by the mine is <br />captured and routed one of two underground locations in the level 6 workings: the concrete reservoir or the decline sump. <br />The operator is neutralizing the impounded water from a pH of 3 to a pH of 7 by treating it with sodium bicarbonate. No <br />water is being the released or pumped the the surface. <br />(MP) Gen. Compliance With Mine Plan: <br />Narrative: Ore is being generated from the level 6 and is being hauled out of that portal. There was a pile of ore and a <br />Page 2 of 4