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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 />August 15, 2011 <br />Greg Schifrin <br />Minex Exploration <br />1256 W. Elmira Rd. <br />P.O. Box 2183 <br />Sandpoint, Idaho 83864 <br />Dear Mr. Schifrin, <br />Mined Land Reclamation <br />STATE OF COLORADO <br />R CEIVIND <br />AUG 18 2011 <br />Division of Reclamation, <br />Mining and Safety <br />RE: Powderhorn Project Exploration Drilling Program, Notice of Intent File No. P- 2011 -024, <br />Notice of Deficiencies. <br />COLORADO <br />D I V I S I O N O F <br />RECLAMATION <br />MINING <br />SAFETY <br />John W. Hickenlooper <br />Governor <br />Mike King <br />Executive Director <br />Loretta E. Pineda <br />Director <br />The Colorado Division of Reclamation, Mining, and Safety (Division) received your Notice of Intent (NOI) <br />to conduct prospecting operations on July 26, 2011. Per Rule 5.1.3 (a) the Division is notifying you of <br />deficiencies with the application. A review of the Notice application notes the following deficiencies: <br />1. Per Colorado Law, all companies wishing to mine or prospect in the state must be registered <br />with the Colorado Secretary of State. A database search on July 25 and August 15, 2011 does <br />not indicate Seaglass Holdings or Minex have registered. (Copy enclosed) Please provide proof <br />of filing with the Secretary of State. <br />2. Section D, (F, other disturbances) notes pits or sumps with a 7 foot depth. Please provide more <br />details as to the reason for such deep holes. Does Minex expect to encounter groundwater <br />while drilling? <br />3. Section F, Roads indicates no new roads or significant upgrades. However in Section IV (2) it <br />notes if there are any disturbances they will be reclaimed. Please note if there are road areas <br />that are anticipated to be impacted by blading or reconstruction and show on a map. If water <br />bars and riprap may be required, please provide documentation from BLM of acceptance of <br />locations and design. <br />4. Section M, Per Rule 3.1.6 and 3.1.7, an applicant must show they are in compliance with State <br />water laws to protect both quantity and quality. Please provide documentation showing Minex <br />has the legal water rights to remove and use water from any natural source, including seasonal, <br />within the area. <br />5. Section IV, (2) request information regarding the native vegetation of the area. The information <br />provided does not adequately address the requested information. <br />6. Section IV, (8) it is understood that drilling will occur on roads. However, sumps will be adjacent <br />to the drill pads. Please provide information on how topsoil will be segregated and protected <br />from other overburden and topsoil. Please state the estimated topsoil depth. <br />7. Section IV, (9) Bentonite plugging is an acceptable method for dry holes. Please clarify what <br />measures will be implemented to protect the prevailing hydrological balance should <br />groundwater be encountered both during and after drilling. <br />8. Sections IV, (10) please describe in detail how all disturbed areas will be reclaimed. <br />Office of Office of <br />Denver Grand Junction Durango Active and tnactâ– ve Mmes <br />