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COLORADO GOLDFIELDS INC. RESPONSE <br />DRMS DEFICIENCY LETTER DATED SEPTEMBER 21, 2011 <br />NOI P- 2011 -027 <br />Deficiency Issue 6: Water Monitoring Plan and Performance Standards <br />General Comments <br />Deficiency Issue 6 in the Division's letter states in part the following: <br />"NOTE: If the samples show that the mine discharge meets receiving stream standards and if the <br />Applicant can demonstrate to the Division's satisfaction that the proposed activities will not <br />adversely affect the water quality, the Division would consider accepting the NOI. However, if <br />the samples show that the mine discharge does not meet the receiving stream standards, then it <br />is possible that by re- entering the mine and disturbing the existing waste rock stockpile, the <br />Applicant may incur perpetual water treatment liability." <br />In response to this paragraph, Colorado Goldfields Inc. would like to submit the following comments: <br />1. The primary purpose of this NOI as submitted is to investigate the mine workings to determine the <br />source of the water currently flowing from the mine adit and to determine if this can be managed in a <br />manner to improve the quality of water flowing from the adit; and, if necessary, to determine an <br />appropriate treatment plan so that any remaining discharge will meet standards of the receiving stream. <br />2. Nothing in the proposed plan will result in a degradation of the current water quality either coming <br />from the mine or in the Animas River as it flows past the mine site since no change in the current flow <br />regime will occur under the work proposed in this NOI. The underground water flow path will not <br />contact any materials not now being contacted (no gain in metal values), and basic flow patterns will not <br />be changed. Any sediments disturbed and carried in water out of the adit will be removed in the <br />Sedimentation Pond prior to the water being discharged to the Animas River. The proposed rock <br />sampling program, as described in Colorado Goldfields' response to Deficiency Issue 4, will not provide a <br />mechanism to degrade existing water quality. Cleaning of the existing Sedimentation Pond, which is full <br />of sediment, should result in improved water quality that is discharged to the Animas River since greater <br />sediment removal will occur. <br />3. Possible remedial measures that are currently under consideration are the following: <br />• Close the fracture in the back of the mine adit that is noted as a significant source of water (on <br />the existing maps) by a grouting program. <br />• Locate one or more sites for a possible tunnel bulkhead upon closure of the mine or for future <br />installation if mining is not determined to be economically feasible. <br />• Install a catchment structure at or immediately downstream of the water source and convey the <br />water to the portal in a closed pipe so that it does not contact the mineralized zone of the mine. <br />If the water meets receiving stream standards and does not require treatment, then pipe the <br />discharge directly to an appropriate discharge point. <br />