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Inspection Report - Problem 1 <br />The sites have not been active for quite some time and appear to meet the definition of a site that <br />needs to be placed in temporary cessation (as required by Rule 1.13). <br />Inspection Report - Corrective Action <br />The operator will need to initiate reclamation, put the site in temporary cessation, submit proof <br />of recent activity or submit a technical revision to change the site to intermittent status by the <br />corrective date. <br />Operator Response - Statement of Active Permit Continuance & Recent Activity <br />July 23, 2009 <br />Calais Resources Colorado, Inc. requests continuance of active status for permit M-1990-057 for <br />the Leadville Mill and the Hopemore Shaft. The following Statement is offered in support of <br />this request. <br />Property Sale and Transfer Background Information <br />Within the last 12 months (June 18, 2008 to June 18, 2009), Capital Gold Corporation sold the <br />mine property, equipment, supplies and lease rights to Robert Calder and the mill property, <br />equipment, supplies, and access agreements to Constructive Investments, LLC. Calais <br />Resources Colorado, Inc. (Calais), as permit operator of the mine and mill, filed a Transfer of <br />Permit and Succession of Operator (SOO) application. On April 6, 2009, the Division approved <br />the succession of operators from Capital Gold Corporation to Calais Resources Colorado, Inc. <br />Permit M-1990-057 was active following the Transfer of Permit. <br />Operational Relationships <br />Calais has an exclusive use lease of the Leadville Mill facilities and site for the processing of <br />Cross Mine ore. Union Milling Company, LLC (UMC) will operate the Leadville Mill on behalf <br />of Calais. Calais will use the Leadville Mill facility as an interim mill and pilot plant operation, <br />with the milling results forming the basis for the design of a 200tpd mill facility at the Cross <br />Mine. UMC is contractually committed to activate the mill within 120 days notice by Calais and <br />exclusively operate the mill until released by Calais. Furthermore, UMC is committed to <br />providing $600,000 in capital improvements and $500,000 in working capital for resumption of <br />the Leadville Mill operations. <br />The Leadville Mill and Hopemore Shaft facilities are separated by approximately 8-miles. <br />Calais' SOO application and transfer included both the mill and Hopemore Shaft. Robert Calder <br />has applied for a Tourist Mine permit from the Mine Safety and Training Program. Calais and <br />Mr. Calder are working on a new 110(2) permit application for the Hopemore Shaft with the <br />application to be submitted this summer/fall. Calais has no financial or operational interest in the <br />Hopemore Shaft, and the Hopemore Shaft will no longer be part of the transferred permit M- <br />1990-057 after approval of the new application.