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than the inflow to the mine pool measured and/or calculated/estimated by Mount Royale Ventures in recent <br />years. Regardless of water sourcing for the mill, unless an enforceable permit commitment were registered <br />greatly limiting discharge of tailing tonnage to the underground workings below the 70,000 ton per year <br />amount, large volumes of water would have to be pumped out of the mine to prevent flooding to the third <br />mine level of the Cash Mine. This water would either have to be treated and released under the Colorado <br />Discharge Permit System with a permit Mount Royale Ventures currently does not possess, or the water <br />would have to be recirculated to the mill for reuse. If the water were to be reused, dissolved solids in the <br />water and metals contamination would increase and over a short period of milling operations the interstitial <br />water in the tailing would be significantly more contaminated than the mine pool water, which argues <br />against permitting of tailing disposal into the underground workings. <br />4. If the DRMS were to permit tailing disposal into underground workings, precise location information for <br />tailing disposal would be required. The statement in the technical revision TR-06 application that multiple <br />voids associated with the mining property will be backfilled from both surface and underground is overly <br />vague and therefore unacceptable. If TR-06 is to be approved, DRMS will require initial specification of <br />voids to be backfilled followed by on-going submittals specifying backfill locations as mining continues to <br />create new voids. <br />5. If not cemented, tailings disposed into underground workings must be physically contained to prevent <br />mobilization by water flowing through the workings either as a result of continued tailing dewatering or <br />eventual ground water flooding of the mine. Provide either a design for physical containment of tailing, or a <br />cementation specification, or a combination of both. The cementation specification, if provided, must <br />include strength testing results for representative cemented tailing to demonstrate long term immobility in <br />the disposal environment. <br />In accordance with rule 1.9.2 of the Mineral Rules and Regulations of the Colorado Mined Land <br />Reclamation Board, the DRMS must notify Mount Royale Ventures by April 16, 2009 of our decision on <br />technical revision TR-06. Until all of the issues listed in this letter are addressed to the satisfaction of <br />DRMS, the decision will be to deny the technical revision. Clearly, these issues cannot be fully addressed <br />prior to April 16th. Therefore, to avoid denial, Mount Royale may provide a written request to extend the <br />review of the technical revision to allow sufficient time to address the issues, or may withdraw the <br />technical revision application and resubmit once the issues have been addressed. Additional considerations <br />relevant to this technical revision are: <br />1. DRMS has determined that tailing disposal from the Gold Hill Mill outside the pond approved in permit <br />M-1994-117 has not been approved by DRMS in any permits or other authorizations. DRMS has <br />knowledge that tailing from the Gold Hill Mill have been discharged to locations outside of the approved <br />pond; compliance issues relative to tailing management will be evaluated during the forthcoming <br />inspection. <br />3