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January 19, 2011 C-1996-084/Lorencito Canyon Mine KAG <br />Hydrolop.ic Balance <br />Four areas where equipment related repairs are likely necessary in the upcoming field season are <br />as noted: <br />• A gully trending southeast starting in area W-6 leading into area W-5 <br />• A gully at the west edge of area W-5 where flows leave the disturbed area headed to pond 5 <br />• A gully in the Fill 7a area trending southwest <br />• Two gullies in area S-4, both trending southeast <br />The operator should ensure that these erosional features are addressed in the 2011 field season. <br />Number of Partial Inspection this Fiscal Year: 5 <br />Number of Complete Inspections this Fiscal Year: 2 <br />Page 3 of 4 <br />The operator has completed less invasive measures to mitigate rills and gullies that have <br />developed over the past few years. Straw bales have been positioned above repaired areas to <br />help capture and slow runoff to prevent development of gullies in those problematic locations.