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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 />June 6, 2011 <br />Brian Morris <br />Rio Grande Silver, Inc. <br />PO Box 610 <br />Creede, CO 81130 <br />RF-CF-f <br />JINN 0 9 'IZ011 <br />Division of Redamaton, <br />Mining and Safety <br />COLORADO <br />D IV IS I ON OF <br />RECLAMATION <br />MINING <br />SA ETY <br />John W. Hickenlooper <br />Governor <br />Mike King <br />Executive Director <br />Loretta E. Piheda <br />Director <br />Re: Notice of Intent to Conduct Prospecting for East Upper Rat Creek, DRMS File No. P-2011-011, <br />Approval to Commence Prospecting. <br />Dear Mr. Morris, <br />The Division of Reclamation, Mining and Safety received your Notice of Intent to Conduct Prospecting Operations <br />(NOI) on May 13, 2011, and the non-confidential items were posted to the Division's website on May 16, 2011. The <br />NOI was reviewed by our office and approved on June 6, 2011. The reclamation costs associated with this project <br />have been estimated to be $17,424. (The reclamation cost estimate packet is enclosed herewith. Please contact me <br />promptly if you notice any errors or omissions.) Rio Grande Silver, Inc. has posted statewide prospecting bond <br />(corporate surety no. 6575235) in the total amount of $269,318, which was reviewed and accepted by our office. <br />There are several other NOIs currently bonded by this statewide prospecting bond, but the amount of the financial <br />warranty available is sufficient to cover this project. The NOI is considered to be bonded as of this date. <br />Therefore, final approval for this Notice of Intent to Conduct Prospecting at the East Upper Rat Creek project <br />is hereby granted and you may commence operations. <br />Also, in accordance with Rule 5.6, an Annual Report and associated fee of $86.00 must be submitted on your notice <br />approval anniversary date for each year following the filing of an NOI until reclamation responsibility release is <br />granted. In addition, Rule 5.3.4 requires the prospector to notify the Division of completion of prospecting <br />operations and Rule 5.7 requires the submittal of a final report for drill holes within 60 days of completion of the <br />abandonment for artesian flow holes and within one year of completion of the abandonment for any other drill holes. <br />(Form enclosed and also available on DRMS website at h"://www.mining.state.co.usD <br />Thank you for the opportunity to meet and discuss this project, and for the quality of the NOI materials. If you have <br />any questions I may be reached at the Division's Durango field office: 691 CR 233, Room A-2, Durango, CO <br />81301; telephone 970-247-5193, or you may contact the Division's Denver office at the address found in the <br />letterhead above. <br />Sincerely, <br />Bob Oswald <br />Environmental Protection Specialist <br />Office of Office of <br />Mined Land Reclamation Denver • Grand Junction • Durango Active and Inactive Mines