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4- <br />J. M. BECK & ASSOCIATES <br />6130 W. Vassar Way <br />Lakewood, Colorado 80227 Mining & Environmental Engineering <br />Telephone (303) 985-1521 <br />Fax (303) 985-1532 <br />E-mail: jmbeckpe@comcast.net <br />August 6, 2010 <br />Mr. Allen C. Sorenson, E. <br />Colorado Department of Natural Resources <br />Division of Reclamation, Mining, and Safety <br />1313 Sherman Street - Room 215 <br />Denver, CO 80203 <br />RECEIVPI) <br />BUG 0 9 2010 <br />Division of Reclama ffon, <br />41r? Mining & safety <br />RE: Re"est-For.Authorization to Conduct Volumra-Rv tcfPoirfttivities <br />Gold Hill Mill Tailing Impoundment (Permit No. M 1994-117) ? <br />AGC Resources LLC - Front Range Gold Project <br />Dear Mr. Sorenson: <br />As technical consultant to and on behalf of AGC Resources, LLC (AGC), J. M. Beck & <br />Associates is submitting this letter request seeking Division of Reclamation, Mining, and Safety <br />(DRMS) issuance of approval and authorization to proceed with an immediate and responsive <br />environmental mitigation program at AGC's Front Range Gold Project. <br />On August 2, 2010 AGC submitted to your office completed Permit Transfer/Succession of <br />Operator (PT/SO) application forms along with financial warranties for the two Limited Impact <br />110 permits associated with the Front Range Gold Project. DRMS approval of the PT/SO forms <br />issued that same date, effectively making AGC the site "permittee". In addition, as you are <br />aware, AGC earlier acquired the joint venture operating position previously held by Mount <br />Royale Ventures, LLC for the Cash & Who Do Mines (Permit No. M 1983-141) and the Gold Hill <br />Mill (Permit No. M 1994 -117). <br />Inasmuch as DRMS review of the application(s) is underway, and given that DRMS has <br />indicated a willingness to entertain certain at-risk mitigative actions (carried out by parties other <br />than the permittee), AGC is seeking authorization to undertake such an action to address the <br />Gold Hill Mill tailing impoundment water level. The freeboard level of the tailing impoundment <br />was measured (by you) during a site inspection on July 20, 2010 and determined to be at <br />approximately four inches (0.3 feet), whereas the DRMS permit-stipulated minimum freeboard <br />level for the facility, in a non-operational status, is 2.0 feet. <br />AGC is concerned that the existing freeboard level is insufficient to accommodate a major <br />precipitation event, should such occur. For example, it is our understanding that the minimum <br />freeboard requirement for the (design basis) 100 yr/24 hr precipitation event is 1.3 feet, which is <br />approximately four times the existing 0.3 feet of freeboard.