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~J Cotter Corporation Mr. Bruce Humphries March 20, 1990 Page 3 Mining Operations Since 1980 Since 1980, many activities have been undertaken at the JD-6 Mine which constitute mining operations according to the current definition in the Mineral Rules and Regulations. Over a nine year period $238,000 were spent at the mine (an average of $26,500 per year) on activities of this nature. These activities included: surface drilling to further define the ore deposit;;"mine dewatering; ground control in preparation for long hole drilling;rground control for general mine safety,'"timber repair; radio- metric scanning and mapping; mine feasibility studies;`"installation of automated sump probes ,n reconstruction of air and water lines (including electrical wiring), mine surveys; mine inspections; access road re- graveling and regrading; access road maintenance; and general mine maintenance. Mining Plan The Mine will be operated as a "swing producer" as defined in the Intro- duction until such time as mine operations are terminated. Activities similar to those which have occurred since 1980 will continue to take place until production resumes. As the market for uranium andjor vanadium dictates, the Mine may operate continuously at full or partial capacity under the permitted mining plan for unknown lengths of time or it may be maintained in a "ready" state for unknown periods. Likewise, the operation may operate at some degree between these two extremes. As an active "swing producer", the Mine and its facilities will be continuously managed and maintained for operation. Of particular importance in the near future are surface drilling activities planned for 1990. This drilling program is designed to further define the ore deposit. Known economic reserves remaining in the Mine are approximately 59,500 tons based on current economic design parameters. In addition, 36,300 tons of additional reserves are expected to be encountered. Production from the reserves will be dependent on the market and the timing of unknowns associated with utilizing the Mine as a "swing producer". The anticipated mine production life is, however, expected to be eight years (i.e., five years production from current reserves plus three years production from expected additional reserves).