PERMIT FILE - 7/9/2009, 8:43:36 AM-JWD

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Page 4C PROJECT DESCRIPTION ATTACHMENT NOTE: All references to page numbers refer to the photographic "Report on the Santiago Mine" submitted February 12, 2009 for some orientation information. The first 3 years will be limited to the initial work proposed earlier for the mine. This involves mine rehabilitation and clean up and examination of the underground workings. The only potential surface activity will be the reconstruction and restoration of the mill building and dry room once electricity is restored. Full time security will be on site to prevent any further vandalism. Minim and milling methods will be developed once underground conditions are known. Top soil is in place at the 5 Level Portal. (See photo # 19, Page 11 waste rock placement; Drawing, Page 5; photo # 12, Page 10; photo # 16, Page 11.) Drill holes two in number 400 and 800 feet on Santiago Ground US Survey #12903 (See Topographical Map.) We do not expect any discharge from the 5`h Level to have any impact on Leavenworth Creek. No water pumped from the mine will flow directly into the Leavenworth Creek drainage, but will be confined to the proposed holding pond. Any water reaching the creek as ground water should be of the same quality or better than that already flowing into Leavenworth Creek from the Waldorf Tunnel, which already supplies a large quantity of water to the creek. It would have to travel through the subsurface for a much greater distance from the holding pond to reach Leavenworth Creek than it presently does to reach the Waldorf Tunnel and then flow into Leavenworth Creek. The calculations for the settling pond submitted to the Colorado Department of Health by Patricia Mosch, mining engineer, are from the Application for Discharge Permit, # CO-0040657 located in Section 3, TSS, R75W in Clear Creek County. (See 7.5 minute topographical map, Page 1; aerial view Santiago Mine Area and relationship to Leavenworth Creek, Page 2; engineer's drawings, Pages 6,7,8; photos 9, 10, 11, page 9. In response to our application for Discharge Permit # CO-0040657 for the Santiago Mine, from the Public Engineer, Permits and Enforcement Section, Water Quality Control Division, the following was stated: "We have reviewed the above referenced {# CO-0040657} application for a NPDES permit and have determined that no such permit is required for this facility at this time. This decision is based upon your indication that no water will be discharged from this operation into State Waters (Leavenworth Creek). From your application form and my subsequent discussion with your consultant, Patricia Mosch, it appears that (using the most conservative estimates) the natural basin on your property to which you will discharge will hold more than twice the maximum probably volume of water to be pumped out of the mine. If you intend to go beyond exploratory activities at the facility or if the operations encounter water in large enough quantities to necessitate discharge, a permit will have to be obtained before the discharge occurs. The NPDES application must be submitted at least 180 days before discharge." Note: The analytical data from the water studies submitted to your office on February 12,2009 was only to demonstrate that we are aware of the baseline from which our work will begin. In addition, continuous monitoring of state sampling data will allow us to see any infraction from the average norm, which exists now that new waters are entering the head waters of Leavenworth Creek northwest of the Waldorf Tunnel discharge point. This will allow any future Santiago water analyses to be segregated data to determine the point of origin of any infraction. Analytical Data Samples will be taken-as soon as available from underground. (Parameters and Appendix A, Appendix B, and Appendix C are attached.)Analytical data for the following parameters, unless exempted, shall be submitted from at least one composite sampling of each discharge point, plus state waters upstream of each discharge.