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-2- July 22, 2009 <br />' _. ? t `Cl t 1.i ?F <br />n 4j <br />t <br /> <br />- <br />f <br />v <br />t a <br />--Example: Waste Rock Pile, Gilpin County, Abandoned Pewabic Mine Complex <br />Please reference the following documents (attached hereto) prepared by the then named CO Division of Minerals <br />and Geology and the US EPA for a comprehensive analysis of the situation: <br />"Reclamation Feasibility Report - Virginia Canyon", December 2001 <br />"Best Practices in Abandoned Mine Land Reclamation: the remediation of past mining activities", 2002 <br />"EPA Record of Decision R08-88/019 - Central City, Idaho Springs", 1988 <br />Following the recommendations directly made in these publications, we began designing a voluntary program to <br />manage the abandoned waste rock piles on our property. Various scenarios were analyzed for economic feasibility. <br />It was quickly determined it would be an expensive adventure. <br />Capping and revegetation were considered. This would add to the potential real estate value, but there was no <br />immediate return on investment. Additionally, this method only "covered up" the real problem which is the pyritic <br />content of the material that is the source of the acidic run-off. There would still be an effect on the groundwater in <br />the future. Repeatedly, the documents referenced above indicate removal is the very best solution. <br />We began doing metallurgical testing to determine whether or not it is feasible to process this material for any trace <br />precious metal content to offset the initial capital outlay. It was determined that at today's prices, it was indeed <br />feasible to construct a processing mill to extract the precious metals and all of the heavy metal contaminants from <br />the waste rock. This brought about a private, voluntary business solution to cleanup an environmental problem <br />caused by the abandoned mine waste rock. The EPA recognized this cleanup methodology in their ROD R08- <br />88/019: <br />"REPROCESSING ALTERNATIVE: THE REPROCESSING ALTERNATIVE CONSIDERS THE <br />TAILINGS AND WASTE ROCK PILES AS AN ECONOMIC RESOURCE AND RECOVERS THE <br />INHERENT MONETARY VALUE WHILE GENERATING A WASTE WHICH MAY NOT BE <br />DETRIMENTAL TO THE ENVIRONMENT." <br />"REPROCESSING WOULD BE A PERMANENT SOLUTION THAT ELIMINATED COLLAPSE OF <br />THE TAILINGS AND WASTE ROCK PILES. A NEW WASTE TAILINGS IS PRODUCED. <br />LEACHING TESTS SHOW THAT THE NEW TAILINGS CAN BE DISPOSED INA MUNICIPAL <br />LANDFILL. (emphasis added)" <br />Two years ago we began to start our engineering and permitting phase with the CDPFIE. A concentrating mill will <br />be constructed employing both gravity and flotation concentration processes. Initially, we have assembled a 40 <br />ton/day mobile processing facility to start at a small scale to prove out the concept and iron-out process details. The <br />