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March 22, 2012 <br />Battle Mountain Resources, Inc. <br />P.O. Box 310 <br />San Luis, CO 81152 -0310 <br />Mr. Jim Dupler <br />State of Colorado <br />Division of Reclamation, Mining, and Safety <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />Re: Battle Mountain Resources, Inc <br />San Luis Mine Project <br />CMLRB Permit No. M -88 -112 <br />2011 Annual Report <br />Dear Mr. Dupler: <br />The following summarizes calendar year 2011 Battle Mountain Resources, Inc. (BMRI) <br />operation and reclamation activities at the San Luis Mine. <br />Operations /Reclamation: <br />Calendar year 2011 reclamation activities included: <br />• Storm water management on and adjacent to reclaimed and un- reclaimed mine <br />land disturbance areas. Bi- annual (spring and fall season) storm water inspections <br />and maintenance activities were conducted during the 2011 operating year; <br />• Operation of the water treatment plant to manage water from the West Pit and <br />Rito Seco alluvial groundwater systems; <br />• West Pit water management at the Tailing Storage Facility; <br />• Tailing facility storage pond, under drain and leak detection system management; <br />and <br />• Surface and ground water management. <br />Extensive field surveys and reconciliation of the BMRI mine land disturbance and <br />reclamation activities were previously completed by Telesto Solutions, Inc. in 2002 and <br />subsequently further computer accounting (CAD drawings) were conducted and updated <br />for the 2005 annual report. Subsequently, the 2005 review identified 422.7 acres of the <br />509 acres of project disturbance has been reclaimed in accordance with the CMLRB <br />reclamation plan and permit. No further field reclamation has been completed since the <br />final demolition and reclamation of the Battle Mountain Resources, Inc. beneficiation <br />facilities associated crusher and mill area was completed in 2005. As depicted on the <br />2005 map and Table 1 below, the remaining reclamation obligation is associated with the <br />