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STATE OF COLORADO <br />DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3567 <br />FAX: (303) 832-8106 <br />September 17, 2010 <br />Cotter Corporation <br />Attn: John Hamrick <br />P.O. Box 1750 <br />Canon City, CO 80215-1750 <br />RE: Schwartzwalder Mine; File No. M-1977-300; Notification of Pipe Discovery <br />Dear Mr. Hamrick: <br />COLORADO <br />D I V IS I ON OF <br />RECLAMATION <br />MINING <br />SAFETY <br />Bill Ritter, Jr. <br />Governor <br />Mike King <br />Executive Director <br />Loretta E. Pineda <br />Director <br />On September 3, 2010 the office received an email with a pdf letter attached describing a <br />condition discovered at the Schwartzwalder Mine and to advise the Division of actions Cotter <br />was taking in response to that discovery. The discovery was a draining pipe un-earthed during <br />excavation operations associated with installation of the alluvial water treatment system. This <br />pipe was apparently located near or in the embankment along the southeast corner of the old <br />emergency storage pond. It was reported that field personnel were able to stop the flow by <br />simply elevating the end of the pipe. <br />According to your letter, a sample of the discharging water was taken and the results were <br />entered into an AgQA computer program to generate a Piper diagram. You reported that the <br />results of this analysis showed that the chemical characteristics of the water coming from the <br />pipe were consistent with the chemical characteristics of the mine pool water including <br />uranium concentrations. <br />At the time of notification, we had already scheduled an inspection of the Schwartzwalder Mine <br />for September 9, 2010 to evaluate the new alluvial water treatment system. During that <br />inspection, we were informed that the water level in the mine pool is now approximately 15 <br />feet below the Steve Adit indicating a rise of 10-15 feet from the last reported level. We also <br />discussed the discovery of the discharging pipe and Cotter was asked to provide some <br />additional information including: <br />-When was this discovery made (date and time)? <br />-Your letter indicates that a sample was collected and analyzed. Please forward the original <br />laboratory reports for that sample to our office. <br />- What is the size and type of pipe? <br />-What was the estimated flow rate? <br />-What is the elevation of the mine pool? <br />Office of Office of <br />Mined Land Reclamation Denver • Grand Junction • Durango Active and Inactive Mines