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PERMIT #: M -1983 -141 <br />INSPECTOR'S INITIALS: MAC <br />INSPECTION DATE: December 4, 2012 <br />OBSERVATIONS <br />The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety <br />(Division). Mark Steen and Gordon Sweeney were present on behalf of Gold Hill Mines, Inc. The Cash and Who <br />Do Mines are located 10 miles northwest of Boulder, CO. The site is permitted for 9.83 acres and the post - <br />mining land use is forestry. <br />The purpose of this inspection was to follow up on the outstanding corrective actions which were issued by <br />the Mined Land Reclamation Board (Board) at the October 12, 2012 Board Hearing. At that hearing the Board <br />found the following violations: <br />a) C.R.S. 34- 32- 116(7)(h) for failing to protect areas outside of the affected land from slides or damages <br />occurring during the mining operation. <br />b) C.R.S. 34- 32- 116(7)(g) for failing to minimize disturbance to the prevailing hydrologic balance of the <br />affected land and the surrounding area and to the quality and quantity of water in surface and groundwater <br />systems. <br />c) Rule 3.1.6 for failing to comply with applicable federal and state water quality laws and regulations, <br />including statewide water quality standards and site specific classifications and standards adopted by the <br />Water Quality Control Commission, CDPHE. <br />The Operator at the time of the issuance of the violations was AGC Resources, LLC and they were ordered to <br />complete the following corrective actions: <br />a) submit all past due Annual Water Monitoring Reports. <br />b) submit either a discharge permit from CDPHE or written proof that the application process for such <br />discharge permit has commenced. <br />c) complete permanent closure of the secondary escape -way. <br />On April 23, 2012, the Board amended the original Order to allow the Successor Operator (Gold Hill Mines, <br />Inc.) additional time to complete the corrective actions which were issued to AGC Resources, LLC. The <br />amended Order required the Successor Operator to comply with the outstanding corrective actions within 180 <br />days from the date of approval of the transfer of the Reclamation Permit; the requirement for submitting all <br />past due Annual Water Monitoring Reports was waived. The Reclamation Permit associated with the Cash and <br />Who Do Mines was transferred from AGC Resources, LLC to Gold Hill Mines, Inc. on October 2, 2012. <br />Therefore, the final date to achieve compliance with the corrective action is January 29, 2013. <br />The secondary escapeway is located immediately north of the third level adit, approximately 20' north of the <br />access road. The Operator removed the corrugated metal riser and the steel grate at the opening to the <br />escapeway. The opening was then backfilled with waste rock which had been piled next to the opening during <br />excavation of the secondary escapeway. The secondary escapeway is no longer accessible and the area has <br />been reclaimed. When the mine becomes operational, the Operator will need to install a secondary <br />escapeway to meet MSHA requirements. The Operator is aware that an amendment to the reclamation permit <br />will need to be filed if a future secondary escapeway is constructed outside of the permit boundary. If the <br />secondary escapeway is constructed within the permit boundary, then a Technical Revision will need to be <br />filed. <br />Page 2 of 4 <br />