2010-09-08_HYDROLOGY - M1977300 (2)

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A2. 0 ?, Carter, Via Email and U.S. Mail September 3, 2010 Mr. Anthony J. Waldron Division of Reclamation, Mining and Safety 1313 Sherman Street, Room 215 Denver, CO 80203 Re: Schwartzwalder Mine, Permit No. M-1977-300 Dear Mr. Waldron: DECEIVED SEP 08 2010 Division of Reclamation, 740 Mining & Safety As you requested in our telephone conversation on September 2, 2010, Cotter Corporation (N.S.L.) ("Cotter") is submitting this letter to describe a condition discovered at the Schwartzwalder Mine site and to advise you of the actions Cotter is taking in response thereto. A pipe was found on the bank of the old emergency storage pond at the Schwartzwalder Mine site during the installation of the 100 gallons per minute (gpm) water treatment system. Please find enclosed a map indicating the approximate location of that pipe. Water samples were taken and the technician stopped the flow of water from the pipe by elevating it. As discussed, I entered into the AgQA computer program the chemical concentrations from the pipe water and the mine pool water to generate a Piper diagram. That diagram showed that the chemical characteristics of the pipe water were consistent with the chemical characteristics of the mine pool water. The pipe water also showed uranium concentrations generally similar to uranium levels in the mine pool. However, a comparison of radium and molybdenum concentrations showed radium and molybdenum concentrations significantly different in the pipe water from that in the mine pool water. Cotter is arranging for COLOG, a borehole geophysics company, to be on-site next week with equipment which will allow a video camera/accelerometer to be passed through the pipe. This will generate a three-dimensional image of the underground path of the pipe and a video record of what is encountered inside the pipe. In the event that it is found that the pipe is connected to the mine pool, Cotter intends to use appropriate means to permanently seal any such mine opening in accordance with Colorado standards. As the area where the current visible end of the pipe now resides is part of the permitted (disturbed) area under the above referenced permit, reclamation of this area is already approved by permit conditions. Cotter will keep Division of Reclamation, Mining and Safety staff apprised of conditions encountered during this effort. Cotter Corporation Telephone (719) 275-7413 Canon City Mill, P.O. Box 1750, Canon City, CO 81215-1750 USA Fax (719) 275-1669