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SILVER r INC, <br />'. . <br />SawJuavt. silver M%w%wsjo%wt Vewture <br />September 12, 2011 <br />Division of Mining, Reclamation and Safety <br />f7 691 CR 233, Suite A -2 <br />Durango, CO 81301 <br />Dear Mr. Oswald, <br />RECENED <br />SEP 19 ZUn <br />Division of Reclamation, <br />Mining and Safety <br />112 East 12 Street P.O. Box 610 Creede, CO 81130 <br />719 - 658 -1080 Fax 719 -658 -1082 <br />Re: Response to the Preliminary Adequacy Review Letter and Second <br />Adequacy Review Letter for the Technical Revision No. 17 — Bulldog <br />Mine Operation, Permit No. M- 1977 -215 <br />The Technical Revision No. 17 (TR -17) was submitted to Colorado Department of <br />Reclamation and Mining Safety (DRMS) specifically for the construction of the <br />two temporary lined water holding ponds. <br />The plans for construction of the decline and handling of the near surface meteoric <br />water that may be encountered during the driving of the new decline are addressed <br />in the Technical Revision No. 18 (TR -18), submitted to Colorado DRMS on <br />August 29, 2011 <br />The first paragraph of the Preliminary Adequacy Review Letter refers to <br />containment of the "anticipated mine pool water" that would be pumped during <br />construction of the new decline. It is important to note that the water that may be <br />encountered during construction of the new decline is anticipated to be similar to <br />the meteoric water that was encountered by Homestake Mining Company <br />(Homestake) in the existing 9360 Level incline approximately 1,200 feet back <br />from the portal along a geologic contact between the Campbell Mountain Tuff and <br />Creede Formation units. During construction of the decline, there will be no <br />connection between the new 9400 Level decline and the mine pool water. <br />Existing conditions in the 9360 Level incline show that the meteoric water backs <br />up behind the hydraulic plug (placed 100 feet back from the portal) to a static <br />water table elevation of 9382 feet (measured from the Bulldog monitoring well, as <br />described in TR -16). At this elevation the water backs up the incline to a point <br />