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II. Exhibit "C" Mining Plan. <br />c. Are the current existing lined pond and the trenched area going to be the <br />two ponds? Since the trench was also noted with lots of water from the <br />storms that occurred in the area, how do you plan to process ore during an <br />event, which will likely fill up the middle of the ephemera( gulch? Please <br />explain. <br />Answer: Water levels in the retention pond and trench azea were recently <br />observed to be high. Before mining operation commence this year (2007), <br />the water level will be dropped to the "purchased water level" established <br />in 2006 of 12 feet in depth. Water in excess of the "purchased water level" <br />(storm water) will be dischazged in accordance with our current Water <br />Discharge Permit into the intermittent stream bed, until such time as a <br />Water Use Permit and Retention Pond Permit can be obtained from the <br />state of Colorado. <br />