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REASON FOR INSPECTION: <br />Preoperation Inspection <br />BOND CALCULATION TYPE: <br />Complete Bond <br />BOND AMOUNT: <br />$16,435.00 <br />DATE OF COMPLAINT: <br />NA <br />POST INSP. CONTACTS: <br />U.S.Forest Se ..ce <br />JOINT INSP. AGENCY: <br />None <br />WEATHER: <br />Clear <br />INS O SIGNAT <br />6 <br />SIGNATURE DATE: <br />August 11, 2011 <br />MINE NAME: <br />South Upper Rat Creek <br />MINE /PROSPECTING ID #: <br />P- 2011 -023 <br />MINERAL: <br />Silver, gold, lead anc <br />COUNTY: <br />Mineral <br />INSPECTION TYPE: <br />Mineral Prospect Inspection <br />INSPECTOR(S): <br />Bob Oswald <br />INSP. DATE: <br />July 29, 2011 <br />INSP. TIME: <br />09:00 <br />OPERATOR: <br />Rio Grande Silver, Inc. <br />OPERATOR REPRESENTATIVE: <br />Randy McClure <br />TYPE OF OPERATION: <br />MP - Mineral Prospecting <br />RECEIVOS <br />COLORADO DIVISION OF RECLAMATION, MINING AND F Z 11 <br />MINERALS PROGRAM INSPECTION REPORT <br />PHONE: (303) 866 -3567 �'wslon of Reclamation, <br />AAining and Safety <br />The Division of Reclamation, Mining and Safety has conducted an inspection of the mining operation <br />noted below. This report documents observations concerning compliance with the terms of the permit <br />and applicable rules and regulations of the Mined Land Reclamation Board. <br />GENERAL INSPECTION TOPICS <br />This list identifies the environmental and permit parameters inspected and gives a categorical evaluation of each. No problem <br />or possible violations were noted during the inspection. The mine operation was found to be in full compliance with Mineral <br />Rules and Regulations of the Colorado Mined Land Reclamation Board for the Extraction of Construction Materials and /or <br />for Hard Rock, Metal and Designated Mining Operations. Any person engaged in any mining operation shall notify the office <br />of any failure or imminent failure, as soon as reasonably practicable after such person has knowledge of such condition or of <br />any impoundment, embankment, or slope that poses a reasonable potential for danger to any persons or property or to the <br />environment; or any environmental protection facility designed to contain or control chemicals or waste which are acid or <br />toxic - forming, as identified in the permit. <br />(AR) RECORDS <br />Y (FN) FINANCIAL WARRANTY NA (RD) ROADS NA <br />(HB) HYDROLOGIC BALANCE NA (BG) BACKFILL & GRADING NA (EX) EXPLOSIVES NA <br />(PW) PROCESSING WASTE /TAILING - - -- NA (SF) PROCESSING FACILITIES NA (TS) TOPSOIL-------- - - - - -- NA <br />(MP) GENL MINE PLAN COMPLIANCE- NA (FW) FISH & WILDLIFE NA (RV) REVEGETATION - - -- NA <br />(SM) SIGNS AND MARKERS NA (SP) STORM WATER MGT PLAN - - -- NA (SB) COMPLETE INSP - - -- NA <br />(ES) OVERBURDEN/DEV. WASTE NA (SC) EROSION /SEDIMENTATION - -- NA (RS) RECL PLAN /COMP -- NA <br />(AT) ACID OR TOXIC MATERIALS NA (OD) OFF -SITE DAMAGE NA (ST) STIPULATIONS NA <br />Y = Inspected and found in compliance / N = Not inspected / NA = Not applicable to this operation / PB = Problem cited / PV = Possible violation cited <br />Page 1 of 3 <br />