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PERMIT #: M -1994 -117 <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 Gold Hill Mill <br />is located 10 miles northwest of Boulder, CO. The site is permitted for 8.4 acres and the post- mining land use <br />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 a violation of C.R.S. 34- 32- 116(7)(c) for failing to handle acid - forming or toxic producing material in a <br />manner that will protect the drainage system from pollution. The Operator at the time of the issuance of the <br />violation was AGC Resources, LLC and they were ordered to submit and obtain approval of a technical revision <br />which addressed reclamation of the historic prospect pits below the tailings impoundment and the transport <br />of tailings from the pond. On April 23, 2012, the Board amended the original Order to allow a Successor <br />Operator (Gold Hill Mines, Inc.) additional time to complete the corrective actions which were issued to AGC <br />Resources, LLC. The amended Order required the Successor Operator to comply with the outstanding <br />corrective actions within 180 days from the date of approval of the transfer of the Reclamation Permit. The <br />Reclamation Permit associated with the Gold Hill Mill was transferred from AGC Resources, LLC to Gold Hill <br />Mines, Inc. on October 2, 2012. Therefore, the final date to achieve compliance with the corrective action is <br />January 29, 2013. <br />The historic prospect pits, referred to throughout the rest of the report as the White Cloud Mine and Cy Eaton, <br />are located immediately down gradient of the Mill building and the tailings impoundment (see attached map). <br />The Cy Eaton pit was approximately 300 ftZ and 8' -10' in depth. The Operator has backfilled the pit with the <br />waste rock stockpile which had been located next to the excavation. The topsoil which was available was <br />spread over the top of the disturbed area; the area has not been seeded. The reclaimed area has been <br />returned to the approximate original contour so that there is positive drainage over the site. In addition, there <br />was no longer any evidence of exposed tailings at this location. The White Cloud Mine pit was a shallow <br />surface excavation which was approximately 300 ftZ. The Operator has backfilled the area to the approximate <br />original contour. There was no topsoil stockpiled in this area as this area had little topsoil to begin with and <br />was likely removed many years prior to this most recent disturbance. The Operator covered the reclaimed <br />area with organic matter from the surrounding area; this area was not seeded. The Division did not observe <br />any exposed tailings at this location. <br />The surface disturbance associated with the White Cloud Mine and Cy Eaton pit has been reclaimed by the <br />Operator. The only remaining reclamation task to be completed is the establishment of vegetation over the <br />reclaimed areas. The historic prospect pits are located beneath a stand of pines and the surrounding area is <br />sparsely covered with native grasses. The Division believes that the reclaimed areas would benefit from <br />seeding; establishing grass stands in these areas will be difficult, but is necessary to prevent erosion. In <br />addition, the Board Order specified that the Operator was to obtain approval of a Technical Revision in regard <br />to reclamation of these areas. The Operator has not submitted a Technical Revision to the Division for review. <br />Despite the fact that most of the reclamation work is complete, the Operator will still need to submit a <br />Technical Revision to the Division for approval by January 29, 2013. The Technical Revision shall describe all of <br />the reclamation work that has been performed to date and shall address the seeding of the reclaimed areas. <br />Page 2 of 4 <br />