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PERMIT #: M -1977 -493 <br />INSPECTOR'S INITIALS: ECS <br />INSPECTION DATE: July 3, 2013 <br />OBSERVATIONS <br />This was a routine monitoring inspection for the Climax molybdenum mine, a 112d -3 hard rock mine operated <br />by the Climax Molybdenum Company — a division of Freeport McMoRan. This site is located at the summit of <br />Freemont Pass on Highway 91. DRMS representative for this inspection, Eric Scott, arrived on -site at <br />approximately 1000. DRMS was guided /accompanied on the inspection by Climax representatives Ray Lazuk <br />and Aaron Hilshorst. <br />The DRMS inspection started with an MSHA safety briefing, followed by a general discussion of the site and <br />some items of interest identified by Climax. One of the issues identified by Climax to DRMS was the <br />occasional "upset" of a concrete drop box structure that passes tailings from the mill to the tailings repository <br />during certain operating conditions. This upset has, on several occasions, resulted in the discharge of a limited <br />amount of mill tailings onto the ground surrounding the box structure. Climax has cleaned up all the tailings <br />that were discharged as a result of these upsets from the ground surface, and has taken steps to contain and <br />minimize any further events (creation of a containment excavation and mill operations modifications) while a <br />permanent solution is identified and implemented for this issue. <br />Another issue that Climax has recently identified is a possible impacted groundwater to surface water seep near <br />the base of the reclaimed Stork Yard area. While it was initially suspected by Climax that this feature may only <br />be a result of seasonal runoff events, it now appears that this may not be the case. At this time, the monitoring <br />data do now show any detectable impacts to surface water in the Arkansas drainage. However, Climax will <br />need to address this issue, and mitigate any impacted groundwater to surface water discharge that may be <br />occurring at this location. Mr. Lazuk stated that additional information is currently being gathered by Climax to <br />this end so an appropriate remediation can be implemented. DRMS will evaluate the data and any potential <br />remedial plans as provided by Climax. <br />There is still a significant amount of construction activity on -site associated with the restart of full -scale mining <br />operations. DRMS observed the locations of additional monitoring wells that were installed during the 2012 <br />field season (photo 1), the active construction sites for the approved new water treatment plant (photo 2) and <br />Mayflower TSF emergency bypass tunnel (photo 3), the TSF areas (photos 4,5 and 6), Robinson Pond, Eagle <br />Park reservoir, Robinson Lake and McNulty Gulch. <br />DRMS was later joined onsite by several members of the State Engineer's Office Dam Safety Group. DRMS <br />accompanied them as they conducted a brief site inspection on the Chalk Creek and Robinson Lake dams which <br />are under SEO jurisdiction. The SEO Dam Safety Group may provide technical comment to DRMS on a <br />forthcoming revision to be submitted by Climax for the Mayflower tailings dam, so the group also visited the <br />active TSF areas for general site orientation. DRMS departed the site at approximately 1500. <br />Inspection Contact Address <br />Ray Lazuk <br />Climax Molybdenum Company <br />Highway 91, Fremont Pass <br />Climax, CO 80429 <br />Page 2 of 3 <br />