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COTTER CORPORATION (N.S.L.) <br />RESPONSE TO NOTICE OF VIOLATION /CEASE AND DESIST ORDER <br />NO. I0- 100601 -1, AMENDMENT 3, PARAGRAPH 31 (INVESTIGATION OF <br />SOURCE MATERIALS AT THE SCHWARTZWALDER MINE), <br />ISSUED ON SPETEMBER 27, 2011 <br />Paragraph 31 of Amendment 3 (as issued on September 27, 2011): <br />Cotter shall perform or ensure it has completed a thorough investigation of the mine site to <br />identify all areas of pollutant source material at the Facility, if necessary, and unless Cotter <br />believes it has already performed such investigation. Within ninety (90) calendar days of the <br />date of this amendment, Cotter shall submit to the Division and DRMS a written summary of the <br />findings of the investigation and a plan and time schedule for the aggressive characterization and <br />removal or containment of all identified or known groundwater or surface water pollutant <br />sources at or associated with the facility, as necessary to eliminate unauthorized pollutant <br />discharges to surface water and groundwater. At a minimum, this should include a specific time <br />schedule for the identification and removal of all materials within the Pad that are uncontained <br />and /or contributing to the exceedance of water quality standards, and the characterization and <br />containment or removal of materials associated with the historic waste piles at the Facility that <br />are uncontained and /or contributing the exceedance of water quality standards. The submitted <br />plan and time schedule shall become a condition of the order and Cotter shall comply with the <br />plan and time schedule, as submitted, unless notified by the Division in writing that an alternate <br />plan or schedule is appropriate. If the Division imposes an alternate plan or schedule, it shall <br />also become a condition of the Order. <br />Background, Summary Interpretations and Responses: <br />12/22/11 <br />Extensive environmental monitoring data and site investigations to date indicate that there are <br />three basic sources of impacts to water quality at the Schwartzwalder Mine site ( "Site ") that can <br />be definitively linked to past mining operations (as opposed to naturally occurring impacts that <br />may have existed prior to mining due to natural uranium deposits and groundwater regimes <br />associated with local geologic formations). Anthropogenic sources of impacts include: <br />1. Solid source term material (mine waste rock) residing in the alluvium and fill pad <br />( "Pad "); <br />2. Solid source term material underlying portions of the South Waste Rock Pile; and <br />3. Small amounts of geochemically altered mine pool water migrating into the Pad <br />through historic exploratory core holes or geologic faults /fractures <br />Cotter Corporation (N.S.L.) ( "Cotter ") has interpreted and summarized below the essential <br />requirements described in Paragraph 31 of Amendment 3, followed by corresponding responses: <br />1 <br />