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Letter to Stephen Hilgers 2 July 7, 2009 <br />Review of Santiago Mine NOI File No. P-2009-005 <br />bond for demolition and removal. Provide dimensions and descriptions of the building(s) and foundation(s) <br />so that removal costs can be estimated to establish the amount of required bond. <br />7. The DRMS understands that a secure closure with gated access has been installed on the Santiago Mine 5th <br />Level portal by the DRMS Inactive Mine Program. Please provide a commitment that activities under the <br />NOI will not alter or remove the portal closure, or if you will alter or remove the closure provide dimensions <br />for the portal so that replacement costs can be estimated to establish the amount of required bond. <br />8. As part of its review of this NOI, DRMS has referenced U.S. Geological Survey Scientific Investigations <br />Report 2004-5104. This report concludes that Santiago Mine waste rock contaminates water when contacted <br />by precipitation and snowmelt. Therefore, the proposal to dispose of waste rock generated by the <br />prospecting operation by adding it to the existing dump is not acceptable. The newly generated waste rock <br />must be isolated from the existing dump and must be encapsulated by low permeability liners and covers <br />prior to revegetation. Provide an encapsulation design and location information for DRMS review; <br />encapsulation designs must be prepared by a geotechnical engineer or other qualified person(s). <br />9. As we discussed when we met at DRMS offices on June 10, 2009, please provide a commitment stating <br />that you will not pump or otherwise dewater the mine in the first phase of prospecting. Once the mine pool <br />that is expected to be impounded in the lower workings, below the 5th Level, is accessible for collection of <br />samples, you may provide a sampling and analysis after consultation with DRMS. Once the water quality of <br />the mine pool is established, a dewatering and water disposal plan can be prepared for DRMS review. Given <br />the geochemistry of the existing waste rock dump, as discussed in item no. eight above, dewatering flows <br />must not be allowed to contact the dump. <br />Once you have adequately responded to the items listed above, DRMS will estimate the costs to reclaim your <br />proposed prospecting disturbances in addition to plugging and abandonment of core holes. You may not <br />commence prospecting operations until the bond has been submitted and you have been notified in writing <br />that the bond has been accepted by the DRMS. As we have discussed, the bond may be posted <br />incrementally; for example, you could post bond to commence mine rehabilitation, and then post the bond <br />for the core holes later, when you are actually ready to drill. <br />If you have any questions, please contact me at 303-866-3567 extension 8143. <br />Sincerely, <br />dld- <br />Allen C. Sorenson <br />Reclamation Specialist <br />enclosure(s) <br />cc: Patti Turecek, Forest Service (w/o enclosures) <br />cAacs files\My Documents 4-19-06 thru\santiago receipt of June 2009 NOI.doc