2012-02-28_REVISION - M1980244 (104)

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$99,143,871.21. This financial warranty is provided as surety for reclamation of major project facilities (e.g., overburden storage areas, crusher, VLF, process facility, maintenance facilities, etc.) and for reclamation of affected acreage for activities ancillary to major project facilities. The proposed MLE2 will add affected acres and change the category of some of the affected acreage from the MLE approval. A revised closure and reclamation financial warranty estimate is included in this application for the proposed MLE2 as well as the remainder of the Cresson Project in order to appropriately adjust the financial warranty for the proposed changes and to adjust all unit costs and labor rates to 2011 dollars. 1.2 Background of the Site The Cripple Creek Mining District ( "District ") has produced over 25 million ounces of gold since its discovery in 1891. Initially, most of the mining was by underground methods; however, since the 1970s there has been a conversion to surface mining and heap leaching for mineral recovery. Permit M- 1980 -244 was issued in April 1981. Subsequent amendments to the permit (Amendment Nos. 1 through 9) have modified site activities with the more recent amendments authorizing the present surface gold mining, processing, and recovery operations. The most recent amendment was submitted to the OMLR in April 2008 as MLE and was approved in December 2008. MLE was based on the ongoing exploration discoveries with incorporation of additional mining, processing, and ancillary facilities. Specifically, MLE included: 1) Additional mining areas associated with the Main Cresson Mine, the WHEX portion of the East Cresson Mine, and the North Cresson Mine to include extension of the Schist Island Mine area and remining of the Globe Hill deposit 2) Haul Roads to connect the new mine areas, Load Out Bin ( "LOB "), and Phase 5 of the Arequa Gulch Valley Leach Facility ( "AGVLF ") 3) Addition of the ECOSA and an extension to the Squaw Gulch Overburden Storage Area ( "SGOSA ") 4) Addition of Phase 5 to the AGVLF in Arequa Gulch and appropriate modifications of the drainage and storm water management plan in Arequa Gulch to accommodate the addition 5) Increase in the placement of ore on portions of Phases I -IV of the AGVLF from approximately 590 feet above the liner system to a height of approximately 800 feet 6) Modifications to the enrichment circuit to recirculate leach solutions more efficiently to load leach solutions with gold Cripple Creek & Victor Gold Mining Company Cresson Project Mine Life Extension 2 1 -2