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Cotter Corporation Mr. Bruce Humphries March 20, 1990 Page 2 permit application were premised on maintaining production rates and uninterrupted production schedules for the life of the Mine, which were consistent with the economics of the day. The reclamation plan and its timetable also were based upon an optimistic forecast for uranium and vanadium mining. Reclamation at the Mine is guaranteed for the permitted 6.24 acres by a financial warranty. Beginning in approximately 1980, the world market for uranium and vanadium, as well as many other metals, went into a rapid decline. Large world inventories glutted the market, and greatly decreased demand put metal prices into a steep downward spiral. Widespread and large scale layoffs occurred as metals producers, including Cotter, radically cut or curtailed production and downsized their operations. The uranium and vanadium mining industry went into a true depression. During this period of decline in the metal mining industry, the JD-6 Mine was forced to lay off employees and cease production. The Mine suspended production activities in 1980, but continued to conduct activities which are now characterized in the Mineral Rules and Regulations as mining operations. Accordingly, the ability to produce ore from the mine and process it through a milling facility has been actively main- tained, which allows the mine to remain an active "swing producer" (an operation maintained in a ready state with the ability to come on-line quickly and produce as the market dictates). While there is a definite future for the uranium/vanadium mining industry, and specifically the JD-6 Mine, that future will be subject to the world economy and the world market for the product. In addition, the ability to operate competitively on a highly efficient smaller scale will influence the future of the industry and the Mine. Although forecasts for the near term would seem to indicate a continued weakened demand for uranium and vanadium products, a turnaround could occur rapidly as evidenced by the changes within the primary copper industry during late 1987 and 1988. Thus, Cotter must be prepared to alter the extent and short-term duration of operations at the Mine on very short notice in order to efficiently meet changes in market demand for uranium or vanadium. With this change of events, it is evident that the Mining Plan section of the permit no longer accurately reflects present realities at the Mine site. Therefore, the decision was made by Cotter to revise the existing permit to update and to more accurately characterize the present Mine operation and its synchroni- zation with present and future mining activities, and terminate the status of temporary cessation.