2008-02-13_HYDROLOGY - M1978091UG

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GGI would like to take the opportunity to respond to specific items within the Advisory Letter as numbered below. The Advisory Letter provides statements that are incorrect. For clarification, the following items are being refuted: Page 2, Bullet Item 4, second and third sentences stating "It was noted during an inspection of the site conducted by the WQCD on June 8, 2007 that the majority of the Level 6 pad is constructed out of waste rock. The majority of the access road to Level 6 pad is also constructed out of waste rock." It should be noted that both the Level 6 pad and the access road are 'cut and fill' construction features. As such, the access road is entirely comprised of native alluvium material and not'mined materials' from the Golden Wonder mine. Similarly, the Level 6 pad has a lithology comprised of cut and fill materials (native alluvium) at the bottom or lowest layer of the pad/pile. On top of the alluvium there is a deposit of andesite, or country rock that was removed when the Level 6 portal was established. Andesite is non-acid generating and does not contain any of the the ore body characteristics. Only recent mine activity has yielded ore-body rock which comprises the upper most lift/layer of the pad/waste rock pile. As per the CDPHE information, 'any storm-water that contacts the waste rock becomes industrial process wastewater.' It should be noted that any water on the road would NOT be defined as industrial process wastewater. Any storm-water routed from the road to the Level 6 pad is captured within the storm-water evaporative sump and is never released (as defined and measured within the previously submitted Chemical Trace evaluation) and would therefore not be subject to the industrial process wastewater Colorado Discharge Permit System. Page 2, Bullet Item 4, fifth and sixth sentences stating "In addition, any storm-water that comes into contact with this waste rock is now considered contaminated and can no longer be discharged under the storm-water discharge permit. This contaminated water would now be considered an industrial process wastewater and have to be discharged under a separate Colorado Discharge Permit System permit." We strongly disagree with the premise that any storm-water that comes into contact with the Level 6 pad/pile is ever'released'. As demonstrated within the previously submitted Chemical trace evaluation, there are no indications that storm-water ever infiltrates into the pad and emerges at the waste rock toe seeps. The waste rock toe seep water chemistry is correlative to Deadman Gulch baseline flows and not storm-water quality. The existing evaporative sump has been more than sufficient to contain, and evaporate any pad-related storm-water. We do not agree that any discharge exists. Regardless, we are willing to submit the application for a point source discharge permit and will maintain close scrutiny of the CDPHE evaluation of the permit conditions. Page 2, Bullet Item 5, entire bullet. During the June 8, 2007 CDPHE site visit, GGI representatives discussed the pending Deadman gulch diversion channel at length with the CDPHE site investigator. CDRMS representatives were also present. Since the site visit, the channel has been constructed and completed (refer to Photos 1 through 5 within the Attachment A Photograph File). The channel has shown to be effective in capturing headwaters flows from Deadman Gulch (refer to Photo 7). Photo documentation was mailed to Kelly Morgan in January, 2008. Page 2, Bullet Item 6, entire bullet. As summarized previously in the rebuttal provided for Bullet Item 4; the storm-water infiltration pathways are 'perceived' and are not valid. As described above, the already provided Chemical Trace evaluation indicates that there is no complete pathway between any Level 6 generated storm-water, and the waste rock toe seeps. This incomplete pathway is further validated by the fact that the pad itself does not generate any significant Page 5 of 37