2010-11-12_INSPECTION - M1978091UG

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