REVISION - 4/20/2009, 11:24:03 AM-JWD

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FOGNANI &FAUGHT,PLLC Mr. Allen C. Sorenson April 15, 2009 Page 4 Treating, testing and analyses performed at the prospecting phase as "baseline site characterization," as DRMS apparently proposes to do, ignores the two-tiered structure of the MLRA, which was unaltered by H1308-1161. Section 113 of the MLRA establishes requirements for the contents of a Notice of Intent to prospect. C.R.S. § 34-32-113. The requirements are limited and not heavily burdensome to potential operators, since at the prospecting stage the potential operator has not conclusively determined to proceed with mining operations - that is, development and production activities. Thus, at this stage, there is no requirement to develop or submit baseline site characterization information. In fact, baseline site characterization information is not required to be developed or submitted until the potential operator submits a full, detailed application for a Reclamation Permit. C.R.S. § 34-32- 112.5(5)(a). Reclamation Permit applications are voluminous and highly specific, and can be extremely expensive to assemble. Such expense and specificity are justifiable, however, at this later stage, when the potential operator has determined that it is desirable from an operational, technical and economic standpoint to proceed with mine development and extraction, and is requesting approval from DRMS to engage in those activities. However, bumping up the "baseline site characterization" concept to the prospecting phase imposes an unacceptable expense and logistical burden on the potential operator, who may in the end never decide to mine the site. Prospecting Activities Versus Mining Activities The Western Mining Action Project claims that the aquifer pumping test included in Powertech's Notice of Intent Modification is "development work" rather than "prospecting" under the MLRA. Under Mr. Parsons' theory, which we reject in total, the aquifer pumping test (as well as a range of activities already approved by DRMS in the original Notice of Intent and Modification MD-01) presumably would trigger the requirement for a Reclamation Permit under the MLRA. We note that DRMS (correctly) does not itself argue that activities proposed under the Notice of Intent Modification constitute mining activities requiring a Mined Land Reclamation Permit under the MLRA. However, because DRMS requires Powertech to respond to issues raised by the Western Mining Action Project, we provide the following analysis of the issue. All of the activities described in the Notice of Intent Modification clearly constitute "prospecting" under the MLRA and the MLRB Regulations. "Prospecting" is defined in the MLRA as: The act of searching for or investigating a mineral deposit. "Prospecting" includes, but is not limited to, sinking shafts, tunneling, drilling core and bore holes and digging pits or cuts and other works for the purpose of extracting samples prior to commencement of development or extraction operations, and the building of roads, access ways, and other facilities related to such work....