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October 18, 2012 C-1981-018/Deserado Mine ZTT <br /> Inspection Topic Summary <br /> NOTE: Y=Inspected N=Not Inspected R=Comments Noted V=Violation Issued NA=Not Applicable <br /> Y -Air Resource Protection R -Roads <br /> N -Availability of Records R -Reclamation Success <br /> N -Backfill &Grading N -Revegetation <br /> N -Excess Spoil and Dev.Waste N - Subsidence <br /> N -Explosives N - Slides and Other Damage <br /> N -Fish &Wildlife N - Support Facilities On-site <br /> R -Hydrologic Balance R - Signs and Markers <br /> N -Gen. Compliance With Mine Plan N - Support Facilities Not On-site <br /> R -Other N - Special Categories Of Mining <br /> R -Processing Waste R -Topsoil <br /> COMMENTS <br /> This was a partial inspection of Deserado Mine conducted by Zach Trujillo on October 18, 2012. Bill Lepro of <br /> Blue Mountain Energy, Inc. accompanied myself on the inspection. <br /> HYDROLOGIC BALANCE -Rule 4.05 <br /> Drainage Control 4.05.1, 4.05.2, 4.05.3; Siltation Structures 4.05.5, 4.05.6; Discharge Structures 4.05.7, 4.05.10; <br /> Diversions 4.05.4; Effluent Limits 4.05.2; Ground Water Monitoring 4.05.13; Surface Water Monitoring 4.05.13; <br /> Drainage —Acid and Toxic Materials 4.05.8; Impoundments 4.05.6, 4.05.9; Stream Buffer Zones 4.05.18: <br /> Ponds PP-I, PP-2, DP-1, RP-2/3 and B-seam dewatering pond system held water.No ponds were discharging at <br /> the time of the inspection. All embankments were stable and vegetated. <br /> Pond DP-1's primary discharge outlet was partially clogged with mud and should be cleared. <br /> All other ponds inspected were dry with no discharge. Embankments were stable. <br /> Culvert that runs below the access road to Moon Lake Substation is partially filled along its outlet. <br /> The Explosives SAE was inspected. The explosives SAE is surrounded by berms which lead any runoff through a <br /> rock check. The SAE was stable with no signs of erosion. The north Rock Dust Tank,Water Tank,Vent Shaft and <br /> Radio Tower SAE were also inspected. Each site was stable with no signs of erosion leaving the site was <br /> observed. <br /> The 10 Left Vent Shaft pad was inspected. Berms surrounding the pad have been added to direct surface runoff to <br /> a rock check as erosion control. <br /> Number of Partial Inspection this Fiscal Year: 3 <br /> Number of Complete Inspections this Fiscal Year: 1 <br /> Page 2 of 4 <br />