2011-03-14_REVISION - M1977493 (67)

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,. r CHmax MoA Freeport-McMoRan Company mss, March 4, 2011 Mr. Eric Scott Environmental Protection Specialist Colorado Division of Reclamation Mining and Safety 1313 Sherman Street; Room 215 Denver, CO 80203 Climax Mine Hwy. 91 Climax, CO 80429 'hone (719) 485-2150 Fax (719) 488-2251 1 0% 16) ?, / / Re: July 8, 2011 Letters to DRMS from Eagle Park Reservoir Company and the Eagle River Water and Sanitation District and Upper Eagle Regional Water Authority Regarding Climax Mine Amendment to Permit M-1977-493 Dear Mr. Scott, This letter is to respond to the July 8, 2010 letters filed by the Eagle Park Reservoir Company (the "Reservoir Company"), and the Eagle River Water and Sanitation District and Upper Eagle Regional Water Authority (collectively, the "Eagle Entities") seeking party status for those entities in the permit amendment application process for the AM-06 amendment to permit M-1977493, filed by Climax Molybdenum Company ("CMC") and called complete for review on August 24, 2010 by the Division of Reclamation, Minina and Safety ("DRMS" ). The Reservoir Company owns the Eagle Park Reservoir; the Eagle Entities are shareholders in the Reservoir Company. CMC conveyed the land and water for the Eagle Park Reservoir to the Reservoir O Company via a June 17, 1998 Purchase and Sale Agreement. As part of the agreement, CMC committed that it would not operate in a manner that could impair the water quantity or water' quality in facilities conveying water across CNIC property to Eagle Park Reservoir, or in the Reservoir itself. In their July 8, 2010 requests for party status, the Reservoir Company and the Eagle Entities have raised concerns that overlap with the agreement. They state broadly that they are concerned that CMC's proposed activities under AM-06 will adversely affect the water supply and water quality of Eagle Park Reservoir. Ultimately, the issues raised by the Reservoir Company and the Eagle Entities relate to CMC's obligations tinder the 1998 agreement. CMC believes the proper forum for resolution of these issues is under the covenants of the agreement and outside the permitting process. Nevertheless, because the Reservoir Company and Eagle Entities have raised these issues in the AM-06 permit application process, CMC submits the following responses to those parties' issues for the record in advance of the format hearing before DRMS. Since receiving notice of the July 8, 2010 letters from the Reservoir Company and the Eagle Entities, CHIC has been working directly with these entities, in good faith, to understand and address their concerns. Representatives from CMC met with the engineer for the Reservoir Companies and the Eagle Entities, and with their legal counsel. in November 2010 and January 2011 to understand the parties' concerns more specifically. From its meetings and other communications with the Reservoir Company and Eagle Entities, CMC understands those parties' specific concerns to be as follows: e Exhibit 10