2006-12-12_REVISION - M1987028 (2)

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EXHIBIT D RECEIVED DEC 12 2006 MINING PLAN Division of Reclamation, Mining and Safety Site History and Geologic Setting The Monarch Mining District is a historic mining area located neaz the Continental Divide within the southern reaches of Sawatch Range in Chaffee County, Colorado. Varied and numerous underground and surface mine operations were initiated in the late 1800's for precious metals and industrial minerals to supplement the steel industry, supported by narrow gauge railroads followed by standard gauge rail systems through the early 1900's and continuing until the early 1980's, lndustrial mineral operations, namely pure calcium carbonate limestone and mazbles, were mined in the Taylor Gulch area both surface and underground stazting in the late 1800's. Numerous underground metal mining operations were active in the early 1900's through the 1950's. At least thirty underground mine plays and waste piles can be seen on the slopes above and below the elevation of the Lilly Mines location. The Taylor Gulch basin, at an elevation of between 10500'-12800', is a primary contact area of Precambrian granite and granite gneiss complex with Paleozoic sediments of carbonate rock type. Taylor Gulch drainage basically sepazates the granite/granite gneiss bedrock east of the drainage channel from steeply dipping (nearly vertical) meta-sediments outcropping west of the Taylor Gulch drainage. The area has experienced mountain building uplift and Tertiary aged injection of intrusives including andesite and rhyolite dykes and sills into the metamorphosed sequence of marble, quartzite, and slate. The siliceous and carbonate meta-sediments as well as the granite gneiss sequence have been intruded by apparently more than one event resulting in the deposition ofmafic-rich andesite and basalt dykes with associated iron and manganese ores deposited in localized areas (now evident by the numerous muckpiles of oxidized rock peppering the slopes in Taylor Gulch). The Lilly Mines were developed from existing patented lode claims located in the late 1800's, but were not mined from the surface until the late 1980's, facilitated by a type 110 reclamation permit approved by the MLRB in 1987. The origina19.9 acre permit azea was mined well beyond its boundaries by 2004, with a DMG GPS survey showing app. 20 acres of surface disturbance. In late 2004, the MLRB ordered the operator to increase the reclamation bond on the disturbed land to reflect cunent disturbance levels and develop a permit amendment to address current and future mining activities. This permit amendment application is intended to address present (short term) and future (long range) planning for mining and reclamation at the site. The Lilly Mines marble deposit is located within a singulaz bed of steeply dipping metamorphic rock type of Pennsylvanian age. Measurements of strike of the marble bed vary within a few degrees of N 15E and dip eastwazd app. 75 degrees. The white marble bed measures 115 feet at its thickness point available at surface outcrop. The marble is white, macro-crystalline medium hard calcium carbonate, portraying a primary joint habit pazalleling the bedding plane. Primary joint field measurements vary from NSE to N18E, dipping east at 75-88 degrees. Primary jointing controls the attitude of the highwall 4