2012-02-28_REVISION - M1980244 (95)

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1.0 INTRODUCTION Cripple Creek & Victor Gold Mining Company (CC &V) operates the Cresson Project, a gold mining and processing operation in the Cripple Creek Mining District ( "District "). The Cresson Project is located between the cities of Cripple Creek and Victor, Colorado southwest of Pikes Peak. The gold mineralization in the District occurs primarily in the Cripple Creek Diatreme — an alkaline volcanic diatreme - intrusive complex ( "Diatreme "). The country rocks surrounding the Diatreme are dominantly Precambrian in age and include gneiss, schist, quartz monzonite, augen, gneiss /granodiorite and granite. The Diatreme is a steep - walled crater with a crudely elliptical outline at the surface. The volcanic activity which created the Diatreme took place during the Tertiary period, approximately 32 million years ago and included placement of plugs, flow domes, small stocks and late -stage diatremal pipes and dikes. Following the placement of the diatreme rock, the rocks were subjected to intense potassium metasomatism, hydrothermal brecciation and gold mineralization. Carbonate -rich styles of alteration post date the precious metal mineralization event. The carbonate alteration plays a major role in the ground water chemistry of the area, as evidenced by the alkaline nature of regional ground water draining from the Carlton Tunnel The District has been historically mined for over 100 years. In order to effectively mine at deeper depths, as the District was developed a series of progressively deeper drainage tunnels were constructed to drain the ground water. The deepest tunnel, the Carlton Tunnel, was completed in 1941 and has dewatered the rock in the District to an elevation below approximately 7,000 feet. This report presents a brief description of the surface water flows and drainage basins in the vicinity of the Cresson Project and a compilation of the surface water and ground water monitoring data for active monitoring locations. The report also discusses currently approved activities and planned activities under the Cresson Project Mine Life Extension 2 ( "MLE2 ") and potential effects to surface and ground water as a result of those activities. A separate report titled "Cresson Project Hydrogeochemical Evaluation" dated February 2012 and prepared by Adrian Brown Consultants, Inc. ( "ABC ") has also been prepared for MLE2. That report addresses the hydrogeological and geochemical properties associated with MLE2. Certain discussions contained in this report rely on the ABC report and contain references to data in the ABC report. 'Cripple Creek & Victor Gold Mining Company Cresson Project Hydrologic Evaluation for Mine Life Extension 2 1