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Memorandum in Response to Notice of Determination of Designated Mining <br />Operation (DMO); DRMS File Numbers M-1977-416, M-1978-039 HR, M-1977-285, <br />M-1980-055 HR, M-1981-021 and M-1977-032. <br />On February 8, 2008, Denison Mines (USA) Corp. ("Denison") received Notices of <br />Determination of Designation Mining Operation (DMO) from the State of Colorado <br />Division of Reclamation, Mining and Safety ("the Division") for the following six <br />Colorado Mines: ~~~ <br />~ ~ ~~ ~wll~~ ` <br />• Carnation Mine (M-1977-416) <br />• St. Jude Mine (M-1978-039 HR) ~;~~~, <br />• Sunday Mine (M-1977-285) a ~ ~~a <br />• Topaz Mine (M-1980-055 HR) ~ ~, ~ ` ~ . ~_ - ; - ~, <br />~4. <br />• West Sunday Mine (M-1981-021) ~ 5, ; ~r '- ~ , --; <br />Van 4 Shaft ~-i~3-7 03 z- ~ ~' ~ ~~~' :~' ~e~ <br />• ( ~~ M - 199~- <br />By letters dated March 7, 2008, Denison notified he Division under Rule 7:23(1) of the <br />Colorado Mineral Rules and Regulations for Hard Rock, Metal and Designated Mining <br />Operations, that it was not challenging these determinations, but that it would proceed to <br />prepare Environmental Protection Plans (EPPs) for each of these mines in accordance <br />with Rule 7.2.3(2). In those letters, Derison also advised the Division that it believed <br />that in the course of preparing such EPPs "it maybe able to demonstrate that some or all <br />of the mines should be considered to be exempt from:.the EPP: requirements under Rule <br />1.1(14)(e) or Rule 7.2.6(1). <br />Three of these mines; the Carnation, St. Jude and Van 4, are currently permitted as <br />limited impact operations (110 permits), while the remaining three, the Sunday, Topaz <br />and West Sunday, are currently permitted as Regular Operations (112 permits). As the <br />Division has indicated that the DMO Rules could be applied differently to 110 permits <br />relative to 12 permits; ,we address each type of permit separately. <br />110::PERMITS <br />Under Rule l:l{14)(e), metal°operations, permitted under Section 34-32-110, C.R.S. <br />1984, as amended;-which do not use or store designated chemicals, are exempt from the <br />requirements applicable .to DMOs unless they have a potential to produce acid mine <br />drainage in quantities'sufficient to adversely affect any person, property or the <br />environment. If the operator can demonstrate to the satisfaction of the Division that the <br />requirements of Rule 1.1(14)(e) are satisfied, then it will not be necessary to prepare an <br />EPP for the mine. <br />Denison believes it will be able to make this demonstration with respect to the Carnation, <br />St. Jude and Van 4 mines, and proposes, as the first step in preparing the EPPs for those <br />mines, to conduct sampling and tests aimed at making that demonstration. If after review <br />of the results of these tests Denison has not demonstrated to the Division that the <br />exemption in Rule 1.1(14)(e) is applicable to any of these mines, Denison will continue <br />with the preparation of an EPP for each of the mines. <br />