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<br />STATE OF COLORADO <br />DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />7313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3567 <br />FAX: (303) 832-8106 <br />August 3, 2007 ~ <br />Ms. Amy Thurlkill <br />Manager of Environmental, Health, and Safety <br />Cotter Corporation '~~ <br />7800 E. Dorado Place <br />Suite 210 <br />Englewood, CO 80111 <br />RE: <br />File No. M-1977-300 `~ <br />Deaz Ms. Thurlkill: <br />./ <br />COLORADO <br />DIVISION O F <br />RECLAMATION <br />MINING <br />- &- <br />SAFE'I'Y <br />Bill Ritter, Jr. <br />Governor <br />Harris D. Sherman <br />Executive Director <br />Ronald W. Cattany <br />Division Direoor <br />Natural Resource Trustee <br />Based on a review of operational conditions at the Schwartzwalder Mine, the Colorado <br />Division of Reclamation, Mining & Safety (the Division) has determined, under the <br />criteria specified in Rule 1.1(14) of the MINERAL RULES AND REGULATIONS OF <br />THE COLORADO MINED LAND RECLAMATION BOARD FOR HARD ROCK, <br />METAL AND DESIGNATED MINING OPERATIONS (Regulations), that the <br />Schwartzwalder Mine meets the definition of a Designated Mining Operation (DMO). <br />Under the authority of Rule 7.2.2 of the Regulations, the Division hereby notifies <br />Cotter Corporation (Cotter) that the determination has been made, effective on the <br />date of this notice, that the Schwartzwalder Mine is a Designated Mining Operation. <br />The Division's determination is based on the following: <br />The site has the potential to release toxic materials as a result of mining operations. <br />Under Rule 1.1(14) of the Regulations, a site will be assigned DMO status if "toxic or <br />acid-forming materials will be exposed or disturbed as a result of mining operations." <br />The Division is of the opinion that the ore and waste at Schwartzwalder are toxic <br />materials, based on the knowledge that the concentration of Uranium in the mine pool <br />water is sufficiently elevated such that treatment of the water will be necessary before the <br />water can be released to Ralston Creek. <br />The obligations and requirements of a site assigned DMO status are described in Rules <br />6.4, 7, and 8 of the Regulations, a copy of which may be downloaded from the DRMS <br />website at: httD://minin~.state.co.us/. <br />Office of <br />Mined Land Reclamation <br />Denver Grand Junction Durango <br />Office of <br />Active and Inactive Mines <br />