2011-09-16_INSPECTION - M1983141

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PERMIT #: M -1983 -141 INSPECTOR'S INITIALS: MAC INSPECTION DATE: August 24, 2011 Availability Of Records: On April 9, 2007, the Division approved a surface and groundwater monitoring plan through Technical Revision - 05. The Operator is required to collect quarterly samples from the Cash Gulch which lies immediately to the west of the mine and mine portals and from an unnamed gulch which lies immediately to the east of the mine and mine portals. Samples can only be collected from the gulches during or immediately following a precipitation event, as they are normally dry. In addition, the Operator is required to collect groundwater samples from the Cash Mine pool and from an up- gradient well (MW -1) and a down - gradient well (MW -5). The results of the groundwater and surface water monitoring program are to be sent to the Division on an annual basis. The Division has not received an Annual Water Monitoring Report for 2009 or 2010. Hydrologic Balance: The Cash and Who Do Mines are permitted as a zero - discharge facility and as such no discharges are to occur on site. The former Operator, Mount Royale Ventures, obtained a Notice of Intent to Conduct Prospecting (N01) in 2004. Mount Royale Ventures completed a cross cut to intersect the third level of the Cash Mine. The Division received a citizen complaint from an adjacent landowner during the period of time when the cross cut was being completed. The Division conducted an inspection and noted in the inspection report dated December 21, 2004 that the cross cut was discharging mine water. The disturbed area associated with the cross cut was later incorporated into the Cash and Who Do Mines permit area under Amendment No. 2 in 2006. The cross cut is now referred to as the Mount Royale Adit No. 1 or the 3rd Level Adit and the NOI was terminated on January 15, 2011. The Division inspected the site on December 22, 2010 and found the 3 Level Adit was discharging water at a rate of approximately 5 -10 gallons per minute. The Division cited a problem for failure to minimize disturbances to the prevailing hydrologic balance of the affected land and of the surrounding area and to the quality and quantity of water in surface and groundwater systems both during and after the mining operation and during reclamation. The Operator does not possess the necessary water rights to allow the mine pool to be pumped down; therefore, the Division required them to obtain a discharge permit from the Colorado Department of Public Health and Environment. The original corrective action date for obtaining a discharge permit was March 31, 2011; the Division extended the corrective action date to June 30, 2011. To date the Operator has not provided the Division with a copy of a discharge permit, nor have they demonstrated that any progress has been made towards obtaining a discharge permit. The Division inspected the 3 Level Adit and found that it was discharging water at a rate of approximately 5- 10 gallons per minute. The water flows directly from the adit for a distance of approximately 10ft before it collects into a small sump, which is located on top of a waste rock pile. The water appears to infiltrate into the waste rock and there was no evidence the water was reporting directly to a surface water body. Off -site Damage: The Division noted that a secondary escape -way for the 3 Level Adit was possibly constructed outside the permit boundary during an inspection conducted on May 5, 2009. The construction of the escape -way was a safety requirement mandated by the Mine Safety and Health Administration. The escape -way is located immediately north of the access road which connects the Cash shaft to the 3 Level Adit. The escape -way is not a part of the approved Reclamation Plan and closure of the escape -way is not covered under the current financial warranty. Page 3 of 7