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s The extreme conservatism in the PMP event for the Bulldog Project is further evidenced in a discussion with Mr Nolan Doesken, Colorado Assistant State Climatologist (Attachment B). In this conversation Mr Doesken indicated that the largest recorded storm in the vicinity of Creede occurred near the turn of the century and the recorded amount was a inches in a 24 hour period. The PMP event for the project area is estimated to be 16 inches, well above the highest ever recorded event for this area. Should the Bulldog site be hit with a storm event greater than the 100 year, 24 hour event some channel erosion would be expected to occur in both the constructed and native channels in the area. Failure of the waste dump (considered unlikely) could temporarily block the Windy Gulch drainage but no significant risk to human health or property exists downstream from such a failure. Because the Project was permitted for the 100 year, 24 hour event and the diversion systems as constructed meet this requirement, Homestake believes we have met our obligations to minimize disturbances to the prevailing hydrologic balance of the affected land and surrounding area (Rule 6.2 Mineral Rules and Regulations). The PMP event should not be the design storm event for this project. Acid -Base Accounting Acid-Base accounting was conducted on a composite waste rock sample from the Windy gulch waste dump as you requested. The results of this testing are presented in Attachment C. As interpreted by Dr Roman Pyrih, these results indicate that the acid-neutralizing potential far exceeds the acid-generating potential and no additional testing is recommended. These results suggest that water quality should not be adversely affected by water flowing through the constructed channel. Road Reclamation Summarv There are seven (7) major roads in the Bulldog project area as illustrated on the figures in Attachment D and summarized below. Area 1: Road to lower tailings impoundment, The road provides access to the tailings impoundment and to the Millsite patented claims in this area. The road will be left open at a point below County Road 5041D to access these private lands. Area 2: Road to upper tailings impoundment. Road will be closed at a point prior to the junction with the County road and at the access road east of the tailings impoundment. Area 3: Road to 9700 level portal and waste rock dump. The lower road goes to the toe of the waste dump and the upper road goes to the 9700 level portal and supports the power line. The upper road provides access to patented claims that 3