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Battle Mountain Resources, Inc. <br />P.O. Box 310 <br />San Luis, CO 81152-0310 <br />March 23, 2009 <br />Mr. Ron Cattany <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 />2008 Annual Report <br />Dear Mr. Cattany: <br />The following summarizes calendar year 2008 Battle Mountain Resources, Ric. (BMRI) <br />operation and reclamation activities at the San Luis mine. <br />Operations/Reclamation: <br />Calendar year 2008 reclamation activities included: <br />• Stormwater management on and adjacent to reclaimed and un-reclai ed mine <br />land disturbance areas. Bi-annual (spring and fall season) stormwate inspections <br />and maintenance were conducted at the site during 2008. <br />• Operation of the water treatment plant to manage water from the Wet Pit and <br />Rico Seco alluvial groundwater systems. <br />• Tailing facility supernatant pond, under drain and leak detection man gement; <br />and <br />• Surface and ground water monitoring. <br />Field surveys and reconciliation of the BMRI mine land disturbance and reclamation <br />activities was completed by Telesto Solutions, Inc. in 2002 and subsequent) further <br />computer accounting (CAD drawings) was conducted and updated in 2005 for the 2005 <br />annual report. Subsequently, the 2005 review identified 422.7 acres of the 509 acres of <br />project disturbance has been reclaimed in accordance with the approved CM RB <br />reclamation plan and permit. No field reclamation has been completed since the final <br />demolition and reclamation of the crusher and mill site area was completed i 2005. As <br />depicted on the 2005 map and Table 1 below, the remaining reclamation obligation is <br />associated with the on-going West Pit water treatment plant operation; the tailing facility <br />supernatant pond area reclamation and water management; access roadway r clamation