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Introduction The Climax Mine (Climax) is a molybdenum mining and milling operation wholly owned and operated by the Climax Molybdenum Company {CMC), which is a wholly owned subsidiary of Phelps Dodge Mining Company. The operation is located in the historic Consolidated Tenmile Mining District completely within a private land block of approximately 14,000 acres straddling the Continental Divide at Fremont Pass. The mine, one of the world's largest primary producers of molybdenum, was generally in constant operation from about 1917 until the mid-1980s. Climax also operated briefly in 1995. Climax remains an active operation with ongoing and documented closure/reclamation and composting operations, dust control, water treatment and compliance management, and general property management activities. There is also a large molybdenum reserve exceeding 150 million tons of ore. Planning for future mining and concomitant specific reclamation planning are in progress at Climax. The Mining and Reclamation Permit (Permit) required under the Colorado Mined Land Reclamation Act of 1976 (Act) was approved by the Colorado Mined Land Reclamation Board (MLRB) in late 1977 (Permit M-1977-493). The Permit was formally amended in 1980 (AM-Ot), 1989 (AM-02), 1997 (AM-03), and 2001 (AM-04). In addition, 13 Technical Revisions (TR) to the Permit have been approved by the Colorado Division of Minerals and Geology (DMG). The history of Climax is well documented. Briefly, molybdenite was discovered on Bartlett Mountain in 1916. With the start of World War I, the ore body was developed by underground techniques and production initiated. The mine closed briefly following the war, but opened again in the early 1920s. Both production and the facilities grew for approximately 60 years, reaching a production peak in the late 1970s of approximately 50,000 tons per day of ore from both underground and open pit operations. At the peak, Climax employed more than 3,200 people. Beginning in 1982, the world molybdenum market went into a rapid decline. Production was curtailed causing widespread and large-scale layoffs and facility shutdowns. Climax ceasetl production and reduced its workforce by mare than 3,000 during the early to mid-1980s. By early 1987, the mine was producing at a low rate exclusively from the higher grade portions of the underground facility. Production operations were curtailed later in 1987. At that time, Climax was placed in a ready state, care and maintenance condition as a swing producer capable of production from the open pit as the market dictated. Other than a brief period of limited production in early 1995, recent activities at Climax have involved upgrading and maintenance of the complex water control and treatment system and extensive closure and reclamation of facilities no longer foreseen as required for production. Climax is actively planning and conducting site activities directed toward returning the mine and mill to production in the future. Presently, the operation employs 16 full-time empbyees and several contractors at the site. This Amendment covers two primary topics. The first considers the operational status of the Climax Mine under evolving global markets for molybdenum and the business context in which the Climax Molybdenum Company will operate the Climax Mine as it manages molybdenite reserves at the Henderson and Climax Mines in Colorado. Based on current market and business conditions, the swing producer status contained in Climax's prior Mining Plan is obsolete. This Amendment revises the Mining Plan and provides an explanation of CMC's basis for resumption of operations at Climax. An Amendment is provided to Exhibit D, the Mining Plan for the Climax Mine Reclamation Permit. The second topic covered by this Amendment is the pending design and construction of upgrades to the existing water treatment system at Climax. Climax treats impacted water for discharge to Tenmile Creek in the Upper Blue River Basin using pH adjustment and clarification in the Tenmile and Mayflower Tailing Ponds. In consideration of new water quality standards, and in recognition Phelps Dodge Corporatlon Mnual Report and Securities Exchange Commission Fonn tOK for fiscal year ended December 31.2004.