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03/06/2009 14:40 7205653497 MOUNT ROYALE VENTUR PAGE 03/04 <br />EPA - Follow-up 3-6-09.doc 3/6/2009 2 of 3 <br />Royale Ventures, LLC is the operator and permit holder of two Colorado Division of <br />Reclamation, Mining and Safety (DRMS) permits: M1983-141 encompassing the <br />Cash Mine, and M1994-117 encompassing the Gold Hill Mill. These permits allow <br />for minting and processing of up to 70,000 tons of material per year. There is <br />significant bonding associated with these permits that is dedicated toward the post- <br />mining reclamation of the land within these permits, approximately 19 acres. The <br />Cash Mine, as our original application for the UIC permit discussed, is to be <br />reclaimed with a hydraulic seal. <br />In addition to these two permits, MRV holds two Notices of Intent to Prospect (NOI) <br />that allow for disturbance of up to an additional 8 acres of laud. These NOI's were <br />acquired in 2004. They are numbered P2004-006 and P2004-007. <br />In. 2005, Mr. Steen began application for an amendment (AM2) to the M1983-141 <br />permit. Unable to properly complete this amendment, MRV and Matt Collins, <br />specifically, assumed responsibility for the completion of the permitting. In October <br />of 2006, the DBMS granted approval of the AM2 amendment. The amendment <br />contained language requesting the ability to emplace tailings (backfill) within the <br />Cash Mine. The approval of AM2 was conditional, stipulating a submittal of a <br />subsequent technical revision (TROS) concerning significant establishment of a water <br />monitoring program, not previously required under the existing permit. Also <br />contained within the AM2 approval, was significant hydro-geological <br />characterization of the groundwater regime within the area of the permit boundaries. <br />This was completed by Adrian Brown Consultants of Denver. Approval of AM2 and <br />TR05 was granted by Mr. Tom Schreiner, Environmental Protection Specialist for the <br />DBMS, who left the DRMS shortly thereafter, in the summer of 2007. In phone <br />conversations with, and acknowledged by Mr. Sorenson, and as further evidenced in <br />the gap in DRMS' electronic files between February 2006 and October 2006, there <br />are many important documents missing, which include a large portion of the AM-) <br />amendment. <br />MRV committed to acquiring an EPA-UIC_ permit for an injection well in the AM2 <br />documents. Pursuant to that, MRV applied to your office for just such a permit in <br />December of 2007. Upon receipt of that permit (by rule) MRV, under assumption <br />that the conversations and permit dialogue with Mr. Tom Schreiner allowed <br />backfilling, prepared to test a system for pumping mill tailings to the Cash Mine. in <br />approximately August of 2008, MRV, under permitted activities associated with the <br />NOI P2004-006, excavated and sampled two (2) historic. mine openings immediately <br />adjacent to the M1994-117 permit boundary. Conversations between Mr. Carl Mount <br />and Mr. Tony Waldron of the DRMS indicated that MRV's backfilling of those <br />openings and subsequent revegetaation would be acceptable to the State. In <br />compliance with the EPA-UIC Class V permit by rule obtained by MRV, MRV tested <br />the backfilling system by closing the holes excavated under P2004-006. One of these <br />holes has been re-contoured and mulched for revegetation, the other, as you must <br />have seen yesterday, is prepared for final capping with rock and contouring.