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This project extracts nearly all of the acid-forming minerals in waste rock that are the source of acid-runoff <br />that plague this historic mining district. By doing nothing, these piles of pre-existing waste rock will <br />continue to leach acid and heavy metals for a very, very long time. But, by designing a carefully regulated <br />and engineered program, as we have proposed, a solution can be achieved. <br />3. Demonstrating to the DRMS our search for a compromise regarding tailings impoundment stability by <br />proposing the application of geotextiles, more specifically Synteen Technical Fabrics SF350 geogrid, into <br />the structure for added shear strength. We discussed and provided you with a copy of the analysis Synteen <br />performed detailing the increased stability that can be achieved utilizing this product. In brief, this geogrid <br />would be placed in horizontal layers as the impoundment is raised. For the most part, the geogrid would be <br />specified at 10' vertical lift intervals, with the exception of Bench #3 which requires an application at 5' <br />vertical lift intervals. <br />Applying this geogrid system successfully approaches the DRMS' desired factor of safety targets. In <br />summary, the lowest reported values are: Saturated Slimes Static FS = 1.52, Saturated Slimes Seismic FS = <br />1.02. This saturated seismic factor of safety is quite acceptable considering the site location as discussed <br />above in #1- and the reality to-which the tailings will become actually un-saturated to be discussed in #4 <br />below. <br />4. Further seeking compromise, we proposed incorporating a network of "French drains" into the <br />impoundment to act as a second degree of active drainage to insure the tailings are effectively de-watered. <br />This is above and beyond the more passive drainage achieved by the geocomposite filtering liner layer that <br />rests between the proposed HDPE liner and tailings interface (as already submitted in the last technical <br />revision as required by the DBMS from the First Adequacy Review of February 16th). <br />We explained and showed to the DBMS the equipment we used to produce actual tailings samples for our <br />geochemical and geophysical laboratory analysis (a process described in the appendix of our application's <br />Exhibit Q. We also showed a dry tailings sample that illustrated how this material dries out and <br />consolidates. It is through our professional experience and knowledge that we continue to assert that the <br />tailings will NOT maintain a fully saturated state in this proposed tailings impoundment. <br />We also re-explained our proposed consolidation and saturation level testing program that was contained in <br />our last technical revision Exhibit C. This core sampling program would provide for a quality assurance <br />check before additional impoundment lifts could occur. <br />5. Illustrating to the DRMS how the Sediment Collection Pond would act as a secondary "trap" if an unlikely <br />catastrophic failure occurred. This would arrest the failed material's acceleration and contain a significant <br />portion within our property boundaries. <br />6. Taking the time to walk the DRMS through our proposed milling process by showing the actual equipment <br />to be used and the site layout. We also reminded the DRMS that during a period from March 2007 through <br />to August 2009 we had been operating under a regulatory regime of the CDPHE Solid Waste Division for <br />this proposed project - as an environmental remediation project. All of the infrastructure development and <br />equipment construction/mobilization was done during that period and has been ready for operation. It was <br />only after a hearing before the MLRD Board in August 2009 concerning whether or not our proposed <br />operations was a mining operation did we cease activity pending the issuance of this mining permit. We <br />were assured at that time by the DRMS that following this permit process would be the best way to bring <br />our project to operation. <br />We felt satisfied that the DRMS fully understood our proposed engineering solutions to move past this stability <br />concern. We all agreed that it was necessary to have a clear path forward on this stability subject prior to <br />resubmitting a formal technical revision, because the other elements of the Second Adequacy Review did not require <br />such complex attention. We concluded the meeting understanding that the DRMS would have to evaluate our <br />proposals internally and report back to us their position. <br />Page 2 of 3