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1.0 INTRODUCTION <br />The San Luis Project is located in Costilla County, Colorado and is an inactive precious metal <br />mining and milling operation operated by Battle Mountain Resources, Inc. (BMRI) under <br />Colorado Mined Land Reclamation Board (CMLRB) permit M -88 -112 administered by the <br />Colorado Division of Reclamation Mining and Safety (CDRMS). BMRI mined and milled <br />precious metal ore at the facility from 1989 through November 1996 and since 1996 has been <br />performing surface land reclamation and closure of the facility in accordance with the CMLRB <br />permit. Current reclamation and closure are associated with completing remaining surface and <br />land reclamation of mining and milling disturbance, extracting and treating groundwater from the <br />West pit, and monitoring surface and groundwater locations within the CMLRB permit area. The <br />surface and groundwater monitoring locations, frequency, and Regulatory Points of Compliance <br />are provided in Table 1 -1 and Table 1 -2 of Technical Revision 32 (TR -32) under Permit M -88- <br />112. <br />Groundwater monitoring well M -14 is located approximately 80 feet west of the toe -of -dam at the <br />San Luis Mine Lined Tailings Facility (LTF), as shown in Figure 1. On April 23, 2013, a <br />groundwater sample from well M -14 was collected in accordance with TR -32, and subsequent <br />laboratory analyses indicated a total dissolved solids (TDS) concentration of 633 milligrams per <br />liter (mg/1) which exceeded the 500 mg/l Permit Condition Value assigned to this well. A <br />verification sample was collected on May 23, 2013, and the laboratory reported a TDS <br />concentration of 587 mg/1. As outlined in TR -32, a second verification sample was collected on <br />July 1, 2013, and the TDS result for this sample was 595 mg/l. On August 28, 2013, a Response <br />Plan for evaluating TDS at well M -14 was submitted to Colorado Department of Reclamation, <br />Mining, & Safety (CDRMS) which outlined specific additional sampling activities to be performed <br />by BMRI. The Response Plan provided for additional monitoring at well M -14 utilizing a low <br />purge sampling technique and was approved by CDRMS on September 16, 2013. <br />TR -32 M -14 TDS Response Plan Report AES, Inc. <br />Battle Mountain Resources — San Luis, CO 1 January 2015 (Update) <br />