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UJ /l ~ <br />March 23, 2008 <br />Mr. Allen Sorensen <br />Battle Mountain Resources, Inc. <br />P.O. Box 310 <br />San Luis, Colorado 81152-0310 <br />State of Colorado <br />Division of Reclamation, Mining and Safety <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 />2007 Annual Report <br />Dear Mr. Sorensen: <br /> <br />The following summarizes calendar year 2007 Battle Mountain Resources, Inc. (BMRI) operation <br />and reclamation activities at the San Luis mine. <br />Operation/Reclamation <br />Calendar Year 2007 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 2007. <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; and <br />• Surface and ground water monitoring. <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 the 2005 report. Subsequently, the 2005 review identified 422.7 acres of the 509 acres <br />of project disturbance has been reclaimed in accordance with the approved CMLRB reclamation <br />plan and permit. No field reclamation has been completed since the final demolition and <br />reclamation of the crusher and mill site area completed in 2005. Therefore, the 2005 amended <br />status map submitted in 2005 depicts the current site reclamation status and remaining mine <br />disturbances requiring to be reclaimed. As depicted on the 2005 map and Table 1 below, the <br />remaining reclamation obligation is associated with the ongoing West Pit water treatment plant <br />operation; the tailing disposal area water management and reclamation; access roadway <br />reclamation West Pit reclamation, and remaining topsoil stockpile storage area reclamation. <br />R CEIVED <br />MAR 31 2008 <br />Division of Reclamation, <br />Mining and Safety <br /> <br />