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OBSERVATIONS <br />PERMIT #: M -1978- 222 -UG <br />INSPECTOR'S INITIALS: GRM <br />INSPECTION DATE: November 2, 2011 <br />This inspection was conducted as part of the normal monitoring program of the Colorado Division of <br />Reclamation, Mining, and Safety (Division) for permitted sites. The Monogram Mine is 112d -1 uranium mine <br />located on private lands on Davis Mesa along the southern rim of Paradox Canyon. The mine has an approved <br />environmental protection plan (epp) on file. The Division inspector, Russ Means, was accompanied Nuvemco <br />representative Tom Cavanaugh. <br />The mine identification sign and affected area boundary markers are in place and in compliance with Rule <br />3.1.12. The sign is located on the gate at the entrance to the site as it enters the lower bench permit access <br />point. Permit boundaries are marked by t -posts and other geographical features that clearly marked the <br />affected areas. <br />The EPP was reviewed and approved in early 2009 prior to final promulgation of the rules by the Mined Land <br />Reclamation Board for changes to the Act passed in May of 2008. The rules promulgation and Division <br />refinement of the process notes some areas of the plan that need to be updated. These areas are not being <br />identified as problems or violations within this report as the EPP was filed and approved in good faith by the <br />operator. Issues noted do not constitute an environmental risk as no uranium ore has been produced or <br />disturbed, and activities on site have been minimal. The Division will address by separate cover the issues <br />identified that will require correction in a Technical Revision to be submitted later. <br />Per the approved EPP construction schedule the only structure noted to be constructed is the ore storage bins <br />that were to be built upon approval of the conversion. It was observed that the bins have not been <br />constructed. The ore storage pad area has not been utilized however due to the economic turn down which <br />modified the life of mine and construction timetables. No uranium ore has been noted as being mined. No <br />waste rock has been developed or added to dumps with current activities. <br />The inspector looked at the on -site storm -water control measures. These controls are part of the internal <br />mine plans approved by the Division and do not reflect other measures required by the Colorado Department <br />of Public Health and Environment's (CDPHE) issued stormwater permit. Those requirements are regulated by <br />CDPHE. <br />Internal stormwater controls at the staging area, primarily grading, are currently channeling water towards <br />the area of a retention basin approved in the EPP. The retention basin as identified in the plans however is <br />not constructed. The inspector notes minor erosion and sedimentation from the staging area which will <br />require immediate attention while the EPP construction schedule is reviewed and revised. Hay bales, waddles, <br />or other suitable materials need to be installed at the lower gather point until the retention basin is properly <br />constructed as designed and approved. Weather may prevent the immediate construction of the retention <br />basin but shall be constructed as soon as possible and no later than spring. This is a problem at this time for <br />failure to protect the affected land from erosion pursuant to C.R.S. 34 -32 -116 (7)(i). A corrective action date is <br />noted at the end of this report. <br />Groundwater monitoring has concluded the five quarters of monitoring as required. Yearly sampling is still <br />being conducted for the life of the mine and reported. No water has been detected to date. <br />Page 2 of 4 <br />