2003-01-14_REVISION - M1977342 (3)

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HENDERSON MINE AND MILL Amendment AM-Q4: Mining and Reclamation Permit M-77-342 L0 INTRODUCTION The Henderson Mine and Mill (Henderson) is an active molybdenum mining and milling operation wholly owned and operated by the Climax Molybdenum Company (CMC), which is a wholly owned subsidiary of Phelps Dodge Corporation (PDC}. Henderson began mining molybdenite ore and production of molybdenum disulfide concentrates in mid-1976. 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 (Board} in late 1977 (Permit M-77-342). Subsequently, the Permit was formally amended in 1981 (AM-Ol}, 1996 (AM-02 -withdrawn), and 1998 {AM-03). In addition, the Colorado Division of Minerals and Geology (DMG) has approved 10 Technical Revisions (TR) to the Permit over the 24 year operating history of Henderson. Two other TRs (TR-04 and TR-12) remain under review by DMG. The latter TR, involving issues related to the recent recalculation of the financial warranty {FW) by the DMG, is a nexus for AM-04. Historically, there has been little change in Henderson's primary operations since production was initiated. The mine and mill. facilities have been active over the last 20 years with no periods of temporary cessation. Presently, the underground mine is producing at a rate of approximately 24,000 tons per day, 246 days per year; rates and days that aze dependent upon market conditions and may vary on short notice. Molybdenite ore conveyed through the tunnel to the west side of the Continental Divide and hence, to the mill in the upper Williams Fork River Valley for grinding and concentration. Exhibit B contains the index map. 2.0 THE AMENDMENT; AM-04 Within the Henderson property boundary, 3587 acres presently are included in the Permit as affected land. The present post-mining ]and use (in effect for the entire site since the original Permit was approved in 1977) is "Open Forest". Briefly, this land use is something of an amalgamation of "forest" and "rangeland" uses. This Amendment proposes to: 1) delete, in entirety, Area 23 -Lost Creek Reservoir area, from the Permit; 2) change the underlying post- mining land use for the entire Permit to "Rangeland", with noted exceptions; 3) change two building sites at the mine site to "IndustriaUCommercial", allowing two specific buildings to remain in place, and 4) change the reclamation plan and post-mining land use for the tailings