2011-12-27_GENERAL DOCUMENTS - M1983141

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In Reply Refer To: 3809 (COF020, SSC) CERTIFIED MAIL: 7010 0290 0002 0733 5902 RETURN RECEIPT REQUESTED Mick Montgomery AGC Resources, LLC "CD 4450 Arapahoe Avenue, Suite 100 Boulder, CO 80303 -9102 Mr. Mick Montgomery: United States Department of the Inte for Bureau of Land Management Royal Gorge Field Office 3028 East Main Street Canon City, Colorado 81212 DEC 2 2 2011 ifk=g TMAMERICA D C 7_ 2011 Cash and Who Do Mines (M1983 -141) 1. The Operator has failed to submit Annual Water Monitoring Reports to CDRMS. M Due to the recent inactivity, discharge of local consultants and lack of maintenance at the Cash and Who Do Mines [Colorado Division of Reclamation, Mining and Safety (CDRMS) permit Xn -141 and BLM COC 51793] and Gold Hill Mill (CDRMS permit M1994 -117 and BLM COC 51792) project located in Boulder County, Colorado, the BLM has determined in accordance with 43 CFR 3809.336 (a) that the Operator has abandoned these aerations. Per 43 CFR 3809.424 (a)(4), and in alliance with CDRMS's processes, BLM intends to pursue the initiation of forfeiture processes as outlined under 43 CFR 3809.596. This letter is intended to serve as communication regarding the status of your operations, as well as to provide a summary of events that have led all parties to this juncture. On December 8, 2011, the State of Colorado Mined Land Reclamation Board ( CMLRB) issued Board Orders for the Boulder County Project in reference to CDRMS's findings, which also included civil penalties. These findings were brought to CMLRB by CDRMS on October 12, 2011, which involved possible violations associated with the mine and mill sites as summarized below: 2. The 3 level adit is discharging mine water and the Operator has not obtained a discharge permit from the Colorado Department of Public Health and Environment. 3. A secondary escape -way hatch has been constructed outside of the CDRMS permit boundary. Gold Hill Mill (M1994 -117) 1. Tailings have been disposed of outside of the tailings storage facility. AGC Resources LLC has 30 -days from the date the Board Orders were issued to implement the mandated corrective actions for these findings.