2013-09-04_INSPECTION - M2006031

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PERMIT #: M- 2006 -031 INSPECTOR'S INITIALS: MAC INSPECTION DATE: August 7, 2013 INSPECTION TOPIC: Permit Stipulations PROBLEM /POSSIBLE VIOLATION: Problem: The Operator has failed to submit the required information under Stipulation No. 1. Please see the body of this report for additional information regarding the reporting requirements. CORRECTIVE ACTIONS: The Operator shall submit the required information under Stipulation No. 1 on or before the corrective action date. CORRECTIVE ACTION DUE DATE: 10/03/13 OBSERVATIONS The inspection was conducted by Michael Cunningham of the Division of Reclamation, Mining and Safety (Division). Phillip Brueggeman of Steel Rose I, Inc. was also present for the inspection. The Steel Rose 1 site is located approximately 13 miles northwest of Lake George and 2 miles north of State Highway 24 on Forest Road 226. The site is located in the Pike -San Isabel National Forest; no representative from the US Forest Service was present for the inspection. The site is permitted for 3.39 acres and the post- mining land use is rangeland. The permit sign was posted at the site entrance and the boundary of the affected area was clearly delineated by monuments. No mining was taking place at the time of the inspection and no equipment is stored on site. Gold is the commodity of interest at this mine. The Operator has performed assay work on the ore, but none of the ore has been sent to a mill for processing. The location of the boundary markers were surveyed using a Trimble GPS unit and the data was downloaded using GPS Pathfinder Office software. The Division determined that the boundary markers delineate an area that is 5.08 acres in size; a copy of the map showing the location of the boundary markers has been enclosed with this report. Based on the Division's findings, the boundary markers are not in the correct location. This has been cited as a problem and will require corrective action by the Operator; please see the first page of this report for additional information. During the inspection, the Division also surveyed the area which was currently affected by the mining operation. The Division has found that the Operator has affected 3.39 acres of land. Therefore, the Operator has reached the maximum level of disturbance that is allowed under the Reclamation Permit. The Operator may not expand the footprint of the operation without increasing the size of the permit boundary through an Amendment to the Reclamation permit. Any disturbance beyond the approved 3.39 acre limit will result in a possible violation of C.R.S. 34- 32- 116(7)(h) for failure to protect areas outside of the affected land from slides or damages occurring during the mining operation and reclamation. The Operator is currently excavating within a trench on the west side of the permit area. The trench is approximately 200 ft. in length, 40 ft. in width, and 25 ft. deep. The Operator has stockpiled waste rock around the perimeter of the site; the Division estimates there is approximately 5,000 cubic yards of waste rock stockpiled on site. The topsoil has been salvaged and stockpiled along the east side of the pit; however, the topsoil has not been stabilized with vegetation as specified in the approved Mining Plan. The failure to stabilize the topsoil stockpiles has been cited as a problem and will require corrective action by the Operator; please see the first page of this report for additional information. The Division observed a small stockpile outside of the southern permit boundary; the Operator identified the stockpile as ore. Since the boundary markers are not in the correct location, the Division was unable to determine if the ore stockpile is outside of the approved permit boundary. The Division will allow the Operator to move the ore stockpile and place it adjacent to the other stockpiles; this should be accomplished as soon as possible. The Division will conduct a Page 2 of 5