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August 2, 2011 / <br />Mr. Michael Cunningham 1/ <br />Environmental Protection Specialist <br />Division of Reclamation, Mining and Safety <br />Department of Natural Resources <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />✓ V <br />Re: Permit M1990 -057, Notice of Designated Mining Operation <br />Dear Mr. Cunningham, <br />Union Milling Company (UMC) is responding to the Division's July 5, 2011, letter to UMC that its <br />Leadville Mill operation may be a Designated Mining Operation (DMO). On Monday, July 25, 2011, <br />UMC, Calais Resources, and the Division met and discussed the intent and the purpose of the law <br />regarding DMO designations. During the meeting, the Division concluded that a review of DMO rules <br />and regulations, as they would apply to UMC, was warranted. Both Division and UMC agree that the <br />interpretation of DMO rules would be influenced by the de minimis chemical use of Potassium Amyl <br />Xanthate (PAX). <br />In order to meet the 30 -day response requirement, as set forth in the July 5th letter, UMC is proceeding by <br />notifying the Division that UMC concurs with the DMO designation pending the internal review and <br />decision, and that UMC will initiate compliance with the requirements of Rule 7.2.3. This is with the <br />understanding that UMC, holding an active mining permit, will proceed with the collection and <br />submission of the Environmental Protection Plan (EPP), aka Exhibit U, concurrent with recommissioning <br />and operating of the mill. The Division understands that UMC will require 365 days to collect and <br />compile the necessary data supporting the EPP. <br />UMC awaits the results of the internal Division review. <br />Please contact me directly for additional information or clarification to this letter. I may be reached at <br />303 - 638 -2573, melder @unionmilling.com, or PO Box 36099, Denver, CO 80236 -0099. <br />Sincerely, <br />i`c1 ael Elder <br />Environmental Compliance and Permitting <br />Union Milling Company, LLC <br />Cc: Robert Calder — Hopemore Shaft <br />Tom Hendricks — Calais Resources Colorado, Inc. <br />The Union Milling Company <br />fr 6200 S. Vivian St. <br />Littleton, CO 80127 <br />+1.303.947.3499 <br />RECEIVED <br />` 0 0 2011 <br />, Division of Reclamation, <br />- /v Mining g Safety <br />