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OBSERVATIONS <br />PERMIT #: M -1977 -342 <br />INSPECTOR'S INITIALS: PSH <br />INSPECTION DATE: January 4, 2013 <br />The Henderson Mine was inspected by Peter Hays with the Division of Reclamation, Mining and Safety <br />(Division) as a follow up inspection to the notice by Bryce Romig with Climax Molybdenum of a release of mine <br />water from the Henderson Mine to the URAD treatment facility pipeline. Mr. Bryce Romig and Mr. Miguel <br />Hamarat with Climax Molybdenum — Henderson Operations (Henderson) were present during the inspection. <br />Henderson is required by Rule 8.1(b) to notify the Division of a failure of any Environmental Protection Facility <br />(EPF) designed to contain or control designated chemicals or process solutions as identified in the permit. The <br />Henderson Mine to URAD water lines are indentified as an environmental protection facility in Henderson's <br />Environmental Protection Plan. Mr. Romig informed the Division of the mine water discharge on January 3, <br />2013 at approximately 3:30pm by phone. The leak was discovered at 1:OOpm and approximately 1,000 gallons <br />of mine water was released. <br />An investigation by the Henderson engineering staff determined the leak came from a frozen connection in <br />the 2 -inch PVC line that collects condensate from the 5 -Shaft fans and feeds into the URAD water lines. The <br />condensate collection system was non - operational at the time of the leak. The leak was caused by one of the <br />joints in the condensate line feeding into the 12 -inch URAD water line freezing and coming apart, which <br />allowed water to backflow from the water line into the condensate line and be released to the surface. The <br />released water flowed into a storm water ditch and froze before it reached the closest stormwater outfall <br />location (OF -5). No mine water left the affected area boundary. <br />The mine dewatering pumps were turned off after approximately 15 minutes and the mine dewatering was <br />diverted into the second URAD dewatering line. Following the incident, the condensate lines were exposed, <br />cut -off near the joint with the URAD lines and capped. Standpipes were placed over the caps and the area was <br />temporarily backfilled to prevent freezing. The standpipes will be monitored to assure no additional leaks <br />develop until a permanent fix to the condensate lines can be designed and completed. The frozen released <br />water will be chipped out, removed and stored in Pond 1.2. <br />During the inspection, the Division observed the backfilled area, the PVC standpipes, the sheet of frozen mine <br />water and stormwater outfall OF -5. Climax committed to provide a follow -up report to the Division as <br />required by Rule 8.2.3. No problems were noted during the inspection, since the mine water release did not <br />leave the affected area. <br />Photographs taken during the inspection are attached. <br />Inspection Contact Address <br />Mr. Bryce Romig <br />Climax Molybdenum Company <br />19302 County Rd. #3 <br />Parshall, CO 80468 <br />Cc: Tom Kaldenbach, DRMS <br />Page 2 of 4 <br />