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C~, _ ~ ~~iCc7//LN'LC~/z-~Zi(J.c, G+..Pl~ trd~-Z~orLG'~e ~"C7 ~/J~Jr6v~ ~~(-~S ,/ Application for an Amendment (AM-051 to a Section 112d-3 Reclamation Permit 4638 Acres Affected Land in Lake. Summit, and Earle Counties Climax Molybdenum Company. Climax Mine. Permit No. M-1977-493 Mining Plan Since the approval of Permit Amendment AM-02 in 1989, the Climax Mine has been permitted as a swing producer of molybdenum concentrates. The tern "swing producer" is defined in the approved permit as: An operation maintained in a ready state with the ability to come on-line quickly in response to mazket demand. The 1989 molybdenum market referenced by this language was almost exclusively dominated by demand from metallurgical applications. Subsequently, a mazket for chemical applications of molybdenum products, which require higher-grade molybdenum concentrate than metallurgical applications, has emerged. The Climax Mine is a primary molybdenum mine, unlike copper mines that produce molybdenum as a secondary product. Molybdenum concentrates from the Climax Mine aze purer and command a premium for chemical applications, as opposed to metallurgical applications. The Henderson Mine, which is a Climax Molybdenum Company facility, is an active operation with an estimated additional twenty to twenty-five years of viable ore body. The Climax Molybdenum Company currently meets the demands of its chemical sales book from Henderson production as the chemical mazket dictates. Substantial ore reserves remain at the Climax Mine. Climax Molybdenum Company is conducting planning and permitting activities that will enable the Climax Mine to operate as a swing producer for chemical application uses in the near term, if market demand so justifies, and as a replacement to the Henderson Mine in the long term. The Climax Mine's reserves will be used to replace Henderson production in a twenty to twenty-five yeaz timeframe. AM-OS is designed to acknowledge the current and future viability of the Climax Mine for the production of molybdenum within this timeframe. In the meantime, reclamation activities at the Climax Mine aze ongoing, with over $25 Million having been spent on reclamation at the Climax Mine since 1993. For the reasons stated above, the operation and permitting of the Climax Mine as a swing producer in response to demand from the metallurgical market is an obsolete strategy that is out of touch with current market realities. The following language is provided in the Amendment AM-OS application to replace the definition of swing producer in the mining plan, as it applies to the current status of the Climax Mine: The Climax Mine will be operated in response to demand for molybdenum concentrate by Climax Molybdenum Company's chemical application customers. A major factor in the Climax Mine's operations will be the extent to which chemical application demand can be satisfied by the Henderson Mine. Based on current mazket conditions, it is expected that neaz the end of the life of the Henderson Mine the capitol investments will be made at the Climax