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?oF coo COLORADO DIVISION OF RECLAMATION, MINING AND SAFETY <br />He% o MINERALS PROGRAM INSPECTION REPORT <br />PHONE: (303) 866-3567 <br />1876 <br />The Division of Reclamation, Mining and Safety has conducted an inspection of the mining operation <br />noted below. This report documents observations concerning compliance with the terms of the permit <br />and applicable rules and regulations of the Mined Land Reclamation Board. <br />MINE NAME: MINE/PROSPECTING ID#: MINERAL: COUNTY: <br />Cash & Who Do Mines M-1983-141 Gold and silver Boulder <br />INSPECTION TYPE: INSPECTOR(S): INSP. DATE: INSP. TIME: <br />Monitoring Michael A. Cunningham December 22, 2010 11:00 <br />OPERATOR: OPERATOR REPRESENTATIVE: TYPE OF OPERATION: <br />AGC Resources LLC Jim Beck & Jim Smith 110(2) - Hard Rock Limited Impact <br />REASON FOR INSPECTION: BOND CALCULATION TYPE: BOND AMOUNT: <br />Normal I&E Program Partial Bond $175,900.00 <br />DATE OF COMPLAINT: POST INSP. CONTACTS: JOINT INSP. AGENCY: <br />NA Colo. Health Dept. None <br />WEATHER: IN P TOR' SIG ATURE: SIGNATURE DATE: <br />Clear January 5, 2011 <br /> <br />The following inspection tonics were identified as having Problems or Possible Violations. OPERATORS <br />SHOULD READ THE FOLLOWING PAGES CAREFULLY IN ORDER TO ASSURE COMPLIANCE <br />WITH THE TERMS OF THE PERMIT AND APPLICABLE RULES AND REGULATIONS. If a <br />Possible Violation is indicated, you will be notified under separate cover as to when the Mined Land <br />Reclamation Board will consider possible enforcement action. <br />INSPECTION TOPIC: Hydrologic Balance <br />PROBLEM/POSSIBLE VIOLATION: Problem: An unpermitted dewatering well (CM-4) was observed in the Cash <br />Mine Area. Rule 3.1.6(1)(a) requires Operations to be in compliance with applicable Colorado water laws and <br />regulations governing injury to existing water rights. <br />CORRECTIVE ACTIONS: The Operator shall obtain a well permit from the Office of the State Engineer or seal the <br />well and provide the Division with a Well Abandonment Report by the corrective action date. <br />CORRECTIVE ACTION DUE DATE: 3/31/11 <br />INSPECTION TOPIC: Hydrologic Balance <br />PROBLEM/POSSIBLE VIOLATION: Problem: The Mount Royale Adit No.1 is discharging water from the Cash <br />Mine pool. Rule 3.1.6 states disturbances to the hydrologic balance of the affected land and of the surrounding <br />area and to the quantity o r quality of water in surface and groundwater systems both during and after the <br />mining operation and reclamation shall be minimized. <br />CORRECTIVE ACTIONS: The Operator shall obtain a discharge permit from the Colorado Department of Public <br />Health and Environment or demonstrate the Mount Royale Adit No. 1 is no longer discharging by the corrective <br />action date. <br />CORRECTIVE ACTION DUE DATE: 3/31/11 <br />Mde? (Ij- I kv) <br />Pagel of 4