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OBSERVATIONS <br />PERMIT #: M -1977 -410 <br />INSPECTOR'S INITIALS: MAC <br />INSPECTION DATE: January 17, 2013 <br />The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety <br />(Division). Tom Hendricks of Calais Resources Colorado, Inc. was also present for the inspection. The Cross <br />Gold Mine is located 5 miles west of Nederland, CO at an elevation of 9,700 ft. The site is permitted for 2 acres <br />and the post- mining land use is residential. The weather was sunny and 6" - 12" of snow covered the ground <br />at the time of the inspection. <br />The inspection was conducted in response to a Notice of Temporary Cessation (TC) received by the Division on <br />January 4, 2013. The purpose of the inspection was to verify that there are no reclamation or performance <br />standard issues or problems that would prevent the site from entering into a five year period of TC. According <br />to the Notice of TC, the site has been inactive since April 4, 2012 due to financial constraints. The Notice of TC <br />maintains that the financial warranty is in good standing and that maintenance activities at the site are <br />ongoing; however, the Notice did not provide a plan for resumption of mining. Pursuant to Rule 1.13.6(1), the <br />Division notified Boulder County and the Town of Nederland of the request for TC; the notices were mailed on <br />January 17, 2013. <br />Hydrologic Balance: <br />Coon Track Creek bisects the site and drains the entire watershed that surrounds the Cross Gold Mine. Coon <br />Track Creek is a tributary of Beaver Creek, which flows into Middle Boulder Creek. The Coon Track Creek flows <br />throughout the year due to discharges from the Cross and Caribou mines. The discharge from the two mines is <br />regulated under a National Pollutant Discharge Elimination System (NPDES) Permit. The water from the Cross <br />Mine reports to a lined pond (Pond 1) located on the north side of the office building. The Operator adds lime <br />to Pond 1 on a daily basis to drop out zinc in order to meet discharge standards. The water from Pond 1 <br />reports to another lined pond (Pond 2) located immediately east of the office building. The water from the <br />Caribou mine does not require treatment and reports directly to Pond 2. The water in Pond 2 discharges into <br />an elevated pipe and into Coon Track Creek; the average discharge rate is 19 gpm. The Division reviewed the <br />daily water quality logs and found everything to be in order. The Operator will submit the 4th Quarter water <br />quality report to the Colorado Department of Public Health and Environment in the near future. Tom <br />Hendricks keeps the daily water quality logs and adds lime to Pond 1 on daily basis and will continue to do so <br />throughout any period of TC. <br />Gen. Compliance With Mine Plan: <br />The Cross Gold Mine is an underground mine with limited surface facilities; no processing of ore occurs on <br />site. The Cross Mine portal is located on the west side of the office and dry room building. The Operator has <br />removed several structures in the past year including the snow shed for the Cross Mine Portal and a boarding <br />house located on the south side of the warehouse /core storage building. The explosives are now being stored <br />in a blasting cap magazine and a powder magazine, which are located on the south side of the warehouse; <br />both of the magazines were locked and secure. The Operator has stockpiled approximately 300 tons of waste <br />rock from the Apache cross -cut along the east side of the access road and immediately south of the <br />warehouse. <br />On April 9, 2012, the Division approved Amendment No. 1 (AM -01). The approval of AM -01 increased the <br />affected area from 2 acres to 9.35 acres. In addition, the amendment revised the Mining Plan to allow for the <br />development of a new decline portal. The approval of AM -01 resulted in a financial warranty increase of <br />Page 2 of 5 <br />