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ATTACHMENT TO ANNUAL REPORT <br />CARNATION MINE <br />PERMIT NO. M-1977-416 <br />OCTOBER 30, 2008 <br />In July 2007, the mine site was occupied, and site maintenance and clean-up was performed. <br />The Carnation portal has been opened for mine ventilation. No ore has been produced out of the <br />Carnation Mine portal this year, and while a small amount of ore production is possible in the <br />upcoming year, it is unlikely to occur. Presently, the Carnation site is only used for ventilation <br />and emergency access, and no ore stockpiles are on site and no mine development rock is being <br />added to existing storage sites. <br />In March of this year, the Division provided notification to Denison Mines that the Carnation <br />Mine is a Designated Mining Operation. Denison has initiated characterization of the waste rock <br />and ore. Potential impacts to groundwater and surface water from exposure of the waste rock is <br />ongoing. In July and September, work plans for waste rock and groundwater analysis were <br />provided and approved by the Division. In August of this year, Denison conducted sampling at <br />mines adjacent to the Carnation; however, due to the vegetation growth on the Carnation waste <br />rock pile, no sampling was conducted of this material in an effort to leave the vegetation <br />undisturbed. It is anticipated however, that the analysis of the rock and ore at the adjacent mines <br />will be representative of the conditions at the Carnation. <br />An Environmental Protection Plan will be prepared for the Sunday Mines (inclusive of the <br />Carnation) and provided to the Division in March 2008. This plan will include the results of the <br />material characterization, drainage report, surface water, and partial groundwater evaluations. <br />The Designated Mining Operation process requires five quarters of groundwater sampling. <br />Denison anticipates that groundwater samples will be obtained in the fourth quarter of 2008; <br />however, five quarters will not be obtained by the March reporting date. Therefore, groundwater <br />sampling will be ongoing following the reporting process. <br />A Weed Management Plan consistent with the requirements of San Miguel County and the <br />Department of the Interior Bureau of Land Management (BLM) was prepared for the Sunday <br />