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Annual Report — 2014 <br />Henderson Mine and Mill Reclamation Activities <br />Permit No. M -1977 -342 <br />3.0 Anticipated 2015 Activities <br />3.1 Prospecting <br />No prospecting activities are currently planned for 2015. <br />3.2 Ute Park Extraction Wellfield — Phase II <br />Phase II of the Ute Park Extraction Wellfield is planned for 2015, with the installation of two additional <br />extraction wells and two monitoring wells. <br />3.3 Gravel Pit <br />Approximately 50,000 tons of material is anticipated to be produced in 2015. <br />3.4 Sand Seam Proiect <br />The Troublesome Formation located within the Ute Park drainage area consists of consolidated to semi - <br />consolidated interbedded layers of sandstone, siltstone and claystone. During the construction and early <br />operation of the Ultimate Canal, a higher permeability layer consisting of sandstone and siltstone was <br />encountered on the northwest side of the TSF, beginning at an elevation of 8875 feet. In order to mitigate <br />the potential for seepage of tailing water through this layer, Henderson is planning a 2015 project to <br />install a liner system before deposition of tailings in this area. <br />4.0 Financial Warranty <br />Climax and its parent company Freeport- McMoRan, Inc. are scheduled before the Mined Land <br />Reclamation Board in April, 2015 to discuss financial assurance (FA) instruments that may be applied to <br />revised Henderson Mine and Mill cost estimates provided to the Division in 2014. Climax anticipates <br />Board resolution allowing revision of the FA for the Henderson facilities prior to the end of 2015. <br />There have been no material changes to the valuation of water rights currently collateralized as part of the <br />existing Henderson FA. <br />Page 4 <br />