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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 20, 2011 <br />Mr. William Katz <br />Sr. Environmental Engineer <br />Climax Molybdenum <br />1746 County Road 202 <br />P.O. Box 68 <br />Empire, Colorado 80438 <br />RE: Climax Molybdenum; Red Mountain Exploration Drilling; File No. P- 2011 -014 <br />Notice of Intent to Conduct Prospecting Approval Letter <br />Dear Mr. Katz: <br />The Division of Reclamation Mining and Safety received your Notice of Intent to Conduct <br />Prospecting Operations (NOI) on June 29, 2011. Your notice was reviewed by our office and <br />approved on July 29, 2011. The financial warranty for this site was determined to be $71,000.00. <br />The financial warranty was submitted on the appropriate financial warranty form and accepted by <br />the Division on August 1, 2011. <br />Final approval for this Notice of Intent to Conduct Prospecting is hereby granted and you may <br />commence operations. <br />Also, in accordance with Rule 5.6, an Annual Report and associated fee of $86.00 must be <br />submitted on your notice approval anniversary date for each year following the filing of an NOI <br />until reclamation responsibility release is granted. In addition, Rule 5.3.4 requires the prospector <br />to notify the Division of completion of prospecting operations and Rule 5.7 requires the submittal <br />of a final report for drill holes within 60 days of completion of the abandonment for artesian flow <br />holes and within one year of completion of the abandonment for any other drill holes. (The form is <br />available on DRMS website at http: / /mining.state.co.us /) <br />If you have any questions, please contact me at 303 - 866 -3567 Ext. 8124. <br />Peter S. Ha vs <br />Environmental Protection Specialist <br />Cc: Tom Kaldenbach; DRMS <br />STATE OF COLORADO <br />NOV CCPIFOEN`rAi <br />COLORADO <br />D I V I S I O N O F <br />RECLAMATION <br />MINING <br />— &— <br />SAFETY <br />John W. Hickenlooper <br />Governor <br />Mike King <br />Executive Director <br />Loretta Pineda <br />Director <br />Office of Office of <br />Denver • Grand Junction • Durango Active and Inactive Mines <br />Mined Land Reclamation <br />