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MCCLURE & EGGLESTON, L.L.C. <br />A L[MrMD LIABUM COMPANY <br />ATTORNEYS AT LAW <br />PETER M. EGGLPSTON <br />JOHN C. MCCLURE <br />RUBY M. WHITELEY, PARALEGAL <br />1401 17TH STREET, SUITE 660 <br />DENVER, COLORADO 80202-1244 <br />TELEPHONE: (303) 294-0822 FACSIMILE: (303) 2940824 <br />DIRECT LINE: (303) 953-5805 <br />May, 15, 2008 <br />Jeff Fugate, Esq. <br />Assistant Attorney General <br />Natural Resources & Environment Section <br />1525 Sherman Street, Rm. 125 <br />Denver, CO 80203 <br />Re: Battle Mountain Resources, Inc. <br />San Luis Project <br />Permit No. M-88-112 <br />Amendment No. AM-03 <br />Dear Jeff <br />15 WASHINGTON, S1ATE 106 <br />MONTE VISTA, COLORADO 81144 <br />PLEB DIM-AU Mnu TOT eCnN nADDEM <br />TELEPHONE: (719) 852-5609 <br />n "Geived <br />MAY 16 2008 <br />Durango Field Office <br />Division of Reclamation, <br />Mining and Safety <br />Thank you for you e-mail of April 18, 2008, setting forth the section of the regulations <br />dealing with amendments to the permit. During our discussion, we reviewed whether or not <br />adding additional land to the permitted area is a practice that commonly occurs. After we spoke, <br />I followed-up on that issue with Mr. Wally Erickson. Also, I have now received a copy of Mr. <br />Erickson's adequacy letter to Mr. William Lyle, of April 25, 2008. <br />Let me set forth my understanding of the facts. If my understanding is incomplete or <br />inaccurate, please advise. <br />Battle Mountain Resources, Inc. (BMRI) is currently in the reclamation phase with its <br />existing DRMS permit. Reclamation has not been completed, but is in the process of moving in <br />that direction. If BMRI had elected to continue to pursue its current course of action, and other <br />facets of the required reclamation phase were satisfied, at the end of the day, BMRI would have <br />only the water treatment facility in place. . <br />As far as treating the waste waters, the water treatment facility satisfies the needs of <br />reclamation. The water treatment facility treats untreated waters from the West Pit area which <br />allows BMRI to then discharge the treated waters to the Rito Seco under a permit issued by the <br />Colorado Department of Public Health and Environment (COPHE). As these waters continually <br />flow out of the West Pit area, it requires pumping in and around the West Pit area to lower the <br />water table which then prevents these waters from reaching the Rito Seco. If the last remaining <br />reclamation issue for BMRI is treatment of the waters (along with the attendent pumping), and