2011-10-06_INSPECTION - M2011040

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OBSERVATIONS PERMIT #: M- 2011 -040 INSPECTOR'S INITIALS: GRM INSPECTION DATE: September 21, 2011 This is a pre - operational inspection and is part of the normal review process for permit applications by the Colorado Division of Reclamation, Mining, and Safety (Division). The Prince Albert Mine is a proposed 110d site located off County Road U -16, in Montrose County. Allen and Wesley Chiles, Rim Rock representatives, accompanied the inspector on site. A sign for the Prince Albert is noted at the intersection of EE22 Road and U -16. A formal sign will be required at the newly installed gate at the entrance to the permitted site off U -16. Permit boundaries are currently t -post and survey markers. All significant permit corners and boundaries will require at a minimum t- posts. The proposed Prince Albert Mine is the evolution of a prospecting project under Notice of Intent (NOI) P- 2005 -021 and P- 2005 -021 into a permitted mine for development and production. Under the NOI a monitor well was placed at the edge of the potential waste dumps to begin groundwater monitoring. Data collected at this well indicates no groundwater down to the most probable geological stratification for an aquifer below the proposed mine workings. Additional well locations are being reviewed both upgradient and below under the Environmental Protection Plan (EPP). On site the inspector and Rimrock discussed the proposed mine plans and possible locations. Two and possible three locations were tentatively identified as being logical. However, until additional geological information is submitted and underground work better defined those locations are not approved. The additional information is forthcoming in the Preliminary Adequacy Review (PAR) due to be released soon by the Division. Surface disturbance covered under the NOI, P- 2005 -021 has been limited to the development of the exploration tunnel, associated waste, an isolated ore pad for the bulk sampling, topsoil stockpile and stormwater controls. The mining and reclamation plans, as well as the EPP address the continued development of the above referenced features. No ore is stored on site and the pad is clear of any materials down to the solid bed rock pad. Stormwater controls in place direct precipitation from this area into a retention basin. Visual observations note the grading and design have worked as planned. The retention basin was noted as holding water with no evidence of an excursion. Waste piles have been rough graded to slope back into the disturbance area. Berms along the proposed permit edge provide additional stormwater run -off controls. The northern edge of these berms has been topsoiled and has some vegetation is starting to appear. Stormwater run -on has been prevented by the construction of a diversion ditch on the up slope side of the project along the proposed permit boundary. A secondary collection ditch will direct stormwater run -off from the waste piles and non -ore areas into a retention basin. The planned ditch will be advances at the toe of waste piles as they grow. The inspector and Rimrock discussed the areas where underground work will be conducted. The Chiles described proposed immediate plans that focus on ore zones close by. Also discussed was the potential idea of tying into the historical "Better Be" Mine. The inspector brought up complications with the review process given the lack of information on the mine and its impact on new operations. Also at issue is the need to evaluate the proposed underground mining areas not just surface disturbance under the EPP. The issues will be discussed in depth within the PAR. No issues or problems are cited that are not under review within the PAR. Responses to this inspection report should be directed to Russ Means at the Division of Reclamation, Mining, and Safety, Grand Junction Field Office, 101 South 3rd Street, Room 301, Grand Junction, Colorado 81501, phone no. 970 - 241 -1117. Page 2 of 3