2012-01-19_INSPECTION - M1977378

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PERMIT #: M -1977 -378 INSPECTOR'S INITIALS: WHE INSPECTION DATE: July 22, 2011 reclamation plan. The mine dump was graded to ensure positive drainage, stabilize slopes, and blend with the native topography. The Operator imported and distributed earthen material to support revegetation efforts. Affected lands have been reseeded several times (last reseeding in 2007), but, as shown in photo 4, vegetative cover for most of the mine dump is sparse. During the inspection, sheep tracks were observed within reclaimed areas. Previous occurrence of noxious weeds appears to have been eradicated. Despite the sparse vegetative cover, reclaimed lands appeared stable; evidence of slumping, settling or excessive erosion was not observed. Mayflower Tailings Pond 4: The Mayflower Tailings Pond 4 (Pond 4) is located along the west bank of the Animas River, several miles upstream from Silverton, at approximately 9,000 feet elevation. The current permit area at Pond 4 is limited to approximately 64.23 acres. The Mayflower Mill facility and Tailings Ponds 1, 2 and 3 have previously been released from the permit due to successful completion of reclamation. However, Pond 4 remained active to receive sludge from the water treatment plant at American Tunnel. Final reclamation of the water treatment plant at American Tunnel commenced 2006 and final reclamation of Pond 4 commenced 2007. The top of Pond 4 has been graded to direct all surface drainage to the west, where it is routed around the southwest perimeter of Pond 4 by the west diversion ditch. The west diversion ditch also diverts upland drainage, as well as ground water from up gradient areas intercepted by a ground water intercept wall. As shown in photos 6, 7 and 8, vegetative cover for Pond 4 and its associated borrow areas were well established, and appeared capable of self- regeneration and at least equal in extent of cover to the natural vegetation of the surrounding area. Affected lands appeared stable; no evidence of settling, slumping or excessive erosion was observed. Iron staining was observed within the west diversion ditch for Pond 4, originating at a drain outlet for the ground water intercept wall (photo 8). The source of the metals drainage is believed to be up slope of Pond 4 and possibly of natural occurrence. American Tunnel: The American Tunnel permit area is located at the confluence of the South Fork and North Fork of Cement Creek, at the historic town site of Gladstone, at approximately 10,000 feet elevation. The permit area at the American Tunnel area is approximately 21.64 acres and includes the portal, waste rock stockpile, and the Herbert Placer. As shown in photo 9, vegetative cover for the portion of Herbert Placer previously occupied by the water treatment ponds was well established and appeared capable of self- regeneration and at least equal in extent of cover to the natural vegetation of the surrounding area. Reclamation backfill, grading and seeding of the treatment pond area occurred in 2005. Clean up of the debris from the damaged Quonset hut has not yet been completed. Prior to the partial collapse of the Quonset hut, ownership of the Herbert Placer and the Quonset hut was transferred from the Operator to Todd Hennis, d.b.a. San Juan Corporation. The landowner is responsible for maintenance of the structure and is conducting the clean up activity. County Road 110 has been recently realigned at the crossing of the North Fork of Cement Creek. The realignment appears to have occurred to facilitate the installation of a new culvert for the creek crossing and was conducted by the county road department. The realignment has increased the surface disturbance associated with CR 110 and appears to have re- affected portions of previously reclaimed lands. As shown in photo 10, slopes of the mine bench have been graded to a stable configuration. The structures shown in photo 10 were approved as permanent structures through TR -29, as requested by the landowner. Page 3 of 4