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HENDERSON OPERATIONS <br />Amendment AM-06: Mining and Reclamation Permit M -77 -342 <br />1.0 INTRODUCTION <br />The Henderson Operation (Henderson) is an active molybdenum mining and milling operation <br />wholly owned and operated by the Climax Molybdenum Company (CMC), which is a wholly <br />owned subsidiary of Phelps Dodge Corporation (PDC). Henderson began mining molybdenite <br />ore and production of molybdenum disulfide concentrates in mid -1976. The Colorado Mined <br />Land Reclamation Board (Board) approved the Mining and Reclamation Permit (Permit) <br />required under the Colorado Mined Land Reclamation Act of 1976 (Act) in late 1977 (Permit M- <br />77 -342). Subsequently, the Permit was formally amended in 1981 (AM -01), 1996 (AM -02 - <br />formally withdrawn), 1998 (AM -03), and 2003 (AM -04). Amendment AM -05, submitted in <br />early 2006, was formally withdrawn with the submittal of this Amendment. In addition, the <br />Colorado Division of Reclamation, Mining and Safety (DRMS) has approved 11 Technical <br />Revisions (TR) to the Permit over the 24 year operating history of Henderson. One other TR <br />(TR -04) remains under review by DRMS. <br />Historically, there has been little change in Henderson's primary operations since production was <br />initiated. The mine and mill facilities have been active over the last 22 years with no periods of <br />temporary cessation. Presently, the underground mine is producing at a peak rate. Molybdenite <br />ore is crushed underground and conveyed through the tunnel to the west side of the Continental <br />Divide and hence, to the mill in the upper Williams Fork River Valley for Concentration. Exhibit <br />B contains the index map. <br />2.0 THE AMENDMENT; AM -06 <br />Amendment AM -04 resulted in a reduction in Affected Land from 4137.8 acres to 3549.8 acres <br />(rounded to 3550 acres for clarity) — 3429 acres at the mill site and 121 acres at the mine site. <br />With AM -06, Henderson proposes to: 1) Using updated mapping technology, correct the <br />Affected Land boundary and increase the total affected acres to 3647 acres by the gross addition <br />of 97 acres of additional buffer at the mill site; 2) Delete 2.0 acres that encompass the Xcel <br />Energy easement from the new total Affected Land — new total Affected Land Area of 3645 <br />(3644.8) acres. <br />2.1 Affected Land Increase <br />Since AM -04 was approved in June 2003, Henderson has instituted an upgraded, sophisticated <br />mapping system at the mill site using ArcMap GIS software. Deployment of this system has <br />allowed Henderson to significantly refine mapping points and acreages within the property <br />3 <br />