2012-01-24_GENERAL DOCUMENTS - M1977416

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DIVISION OF RECLAMATION, MINING AND SAFETY Department of Natural Resources 1313 Sherman St., Room 215 Denver, Colorado 80203 Phone: (303) 866 -3567 FAX: (303) 832 -8106 January 24, 2012 Denison Mines (USA) Corp. 1050 17th Street, Suite 950 Denver, CO 802650000 Re: Action Required to Demonstrate Compliance with Requirements for Intermittent Status of the Carnation Mine, Permit No. M1977416 Mined Land Reclamation STATE OF COLOFADO COLORADO D I V I S I O N O F RECLAMATION MINING — &— SAF ETY John W. Hickenlooper Governor Mike King Executive Director Loretta E. Pineda Director Dear Sir or Madam, The Division is currently reviewing its files for all intermittent hard rock mining operations to ensure that they are in compliance with the requirements of the Mined Land Reclamation Act, C.R.S. § 34 -32 -101 et seq ( "Act ") and the Rules and Regulations of the Colorado Mined Land Reclamation Board for Hard Rock, Metal, and Designated Mining Operations, 2 C.C.R. § 407 -1 ( "Rules "). Please read the following information carefully, as action on your part is required. The Act and the Rules require that operators who are not continuously engaged in the extraction of minerals must either file a notice of Temporary Cessation ( "TC") or apply for Intermittent Status ( "IS "). See C.R.S. §§ 34-32 - 103(6)(a)(II); Rule 1.1(26). Operators must file a notice of TC whenever they intend to, or do, temporarily cease production for more than 180 days. C.R.S. § 34- 32- 103(6)(a)(II); Rule 1.13.5. As an alternative to TC, operators may apply for IS, but only if they comply with the following requirements: 1) Active mining activities must occur each year: The Act provides that intermittent operations must "resume operating within one year." C.R.S. § 34- 32- 103(6)(a)(II). In order to fulfill this requirement, operators must demonstrate that some active mining occurs every year that they remain in IS. Active mining includes the development or extraction of a mineral from its natural occurrence, and /or, the following other activities on affected land: transportation, concentrating, milling, evaporation, and other processing. See C.R.S. § 34 -32- 103(8); Rule 1.1(31). Active mining does not include general site maintenance, which includes but is not limited to off -site smelting, refining, cleaning, preparation, transportation, and other operations not conducted on affected land, or the extraction of construction material where there is no development or extraction of any mineral. See id. In order for your operation to remain in IS, you must provide a detailed and specific narrative description of the active mining activities (consistent with the definitions above) that have occurred at the site during the past year. You must submit this information on or before October 1, 2012. If you wish to remain in IS thereafter, you must continue to submit this information in future Annual Reports. 2) Operators must apply for IS in a permit, amendment, or technical revision: The Act provides that intermittent operations must include, in their permit applications, "a statement that the affected lands are to be used for less than 180 days per year." C.R.S. § 34- 32- 103(6)(a)(II). The Rules provide that this statement may also be made in an application for an amendment or technical revision, and that the statement must include the information otherwise required when filing a notice of TC. Rule 1.13.7. Since your operation has previously been granted IS, no additional action is required to satisfy the application requirements. Office of Office of Denver • Grand Junction • Durango Active and Inactive Mines