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Battle Mountain Resources, Inc. <br />P.O. Box 310 <br />San Luis, CO 81152-0310 <br />March 23, 2011 <br />Mr. Alan Sorenson <br />State of Colorado <br />Division of Reclamation, Mining, and Safety <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />Re: Battle Mountain Resources, Inc <br />San Luis Mine Project <br />CMLRB Permit No. M-88-112 <br />2010 Annual Report <br />Dear Mr. Sorenson: <br />The following summarizes calendar year 2010 Battle Mountain Resources, Inc. (BMRI) <br />operation and reclamation activities at the San Luis Mine. <br />Operations/Reclamation: <br />Calendar year 2010 reclamation activities included: <br />• Storm water management on and adjacent to reclaimed and un-reclaimed mine <br />land disturbance areas. Bi-annual (spring and fall season) storm water inspections <br />and maintenance activities were conducted during the 2009 operating year; <br />• Operation of the water treatment plant to manage water from the West Pit and <br />Rito Seco alluvial groundwater systems; <br />• Tailing facility storage pond, under drain and leak detection system management; <br />and <br />• Surface and ground water management. <br />Extensive field surveys and reconciliation of the BMRI mine land disturbance and <br />reclamation activities were previously completed by Telesto Solutions, Inc. in 2002 and <br />subsequently further computer accounting (CAD drawings) were conducted and updated <br />for the 2005 annual report. Subsequently, the 2005 review identified 422.7 acres of the <br />509 acres of project disturbance has been reclaimed in accordance with the CMLRB <br />reclamation plan and permit. No further field reclamation has been completed since the <br />final demolition and reclamation of the crusher and mill area was completed in 2005. As <br />depicted on the 2005 map and Table 1 below, the remaining reclamation obligation is <br />associated with the on-going West Pit water treatment plant operation; the tailing facility <br />storage pond area reclamation and water management; access roadway reclamation of the