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BATTLE MOUNTAIN RESOURCES, INC. <br />March 29, 2006 <br />Mr. Allen Sorensen <br />State of Colorado <br />Division of Minerals and Geology <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />Re: Battle Mountain Resources, Inc. <br />San Luis Mine Project <br />CMLRB Permit No. M-88-112 <br />2005 Annual Report <br />Dear Mr. Sorensen: <br />REC~I~'~D <br />MAR 3 i 2006 <br />Division o(Minerals and Geology <br />The following summarizes calendar year 2005 Battle Mountain Resources, Inc. (BMRI) operation <br />and reclamation activities at the San Luis mine. <br />Operation/Recla m anon <br />Calendar Year 2005 reclamation activities included: <br />• Stormwater management on and adjacent to reclaimed and un-reclaimed mine land <br />disturbance areas. Bi-annual Stormwater inspections and maintenance was conducted at <br />the site during 2005. <br />• Water treatment management of the West Pit and Rito Seco alluvial groundwater <br />systems. <br />• Tailing facility supernatant pond, under drain and leak detection system water <br />management. <br />• Surface and ground water monitoring, and <br />• Completion of crusher and mill facilities demolition and reclamation. <br />Field surveys of the BMRI mine land disturbance and reclamation activities was completed by <br />Telesto Solutions, Inc. in 2002 and subsequently computer accounting (CAD drawing) updated in <br />2005 for this report. Subsequently, the 2005 review identified 422.7 acres of the 509 acres of <br />project disturbance has been reclaimed in accordance with the approved CMLRB reclamation <br />plan. Final demolition and reclamation of the San Luis course ore stockpile, crusher, mill and <br />cyanide circuits was completed during April 2005. This reclamation included the full demolition <br />and removal of all crusher, mill and cyanide circuit components, contouring, topsoiling, seeding, <br />and soil amendment of the reclaimed mill area. No other field reclamation was completed during <br />2005. Therefore, the attached amended status map depicts the current site reclamation status and <br />remaining mine disturbances requiring to be reclaimed. As depicted on the attached map and <br />Table 1 contained within the text of this report, the remaining reclamation obligation is associated <br />with the ongoing West Pit water treatment plant operation; the tailing disposal area water <br />P.O. Box 310 San Luis, Colorado 81152-0310 (719) 379-0798 Fax (719) 379-0713 <br />