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AUG-12-98 WED 17: 18 P, 04/06 <br /> Mr.Allen Sorenson-DMG <br /> Page 3 , <br /> August 12, 1998 <br /> Climax believes that the physical removal of the oxide tails from the Eagle Park Reservoir is <br /> complete. This effort along with the construction of facilities to protect the reservoir from potential <br /> releases of process water or designated chemicals has been so successful that the potential risk to <br /> the Eagle River from Climax mining activities has been all but eliminated. Because of this, Climax <br /> agrees to meet the following conditions even though Climax does not agree that DMG has the <br /> regulatory authority to require Climax to complete all of the activities below. <br /> Condition No. 1 <br /> Climax Molybdenum Company ('Climax") will maintain water levels and operational controls on Eagle <br /> Park Reservoir to prevent delivery of water to the Eagle River until such time as the Division of <br /> Minerals and Geology ("DMG") has accepted and approved all data from the approved monitoring <br /> plan up to and including water quality data from the sampling event conducted in the second quarter <br /> of 1998. These data were provided in the June 8, 1998 meeting at the WQCD offices. DMG has <br /> reviewed and accepted these data. Condition 1 has therefore been satisfied. <br /> Condition No. 2 <br /> The DMG will hold the option to rescind its conditional finding that post-mining land use of developed <br /> water resources for Eagle Park Reservoir has been achieved if, upon review of-the data and <br /> consultation with the Water Quality Control Division ("WQCD"), it is determined that the discharge <br /> results in exceedences of the chronic water quality standards. The conditional finding will become <br /> final based the acceptance of a report on data gathered over a three-year monitoring period. <br /> Tho monitoring period will commence with the first release of water and occur during the first three <br /> years of reservoir water delivery. <br /> Data used to judge long-term performance will be obtained by sampling the reservoir water at the <br /> outlet works during delivery. Climax will continue quarterly sampling through the fourth quarter of <br /> 1998 at the three established sampling points on the north, east, and south shores of the reservoir, <br /> and at a surface and 35 foot depth sample point in the center of the reservoir. During the period of <br /> reservoir water delivery to the East Fork of the Eagle River, a sample will be taken at the outlet works <br /> on the first day, approximately at the midpoint, and near termination of water delivery. Concurrent <br /> sampling in the East Fork of the Eagle River above and below the confluence of reservoir and river <br /> waters during reservoir deliveries will be conducted in order to compare data in the final report. <br /> Climax uses a depth bomb water sampling device made of Teflon to extract samples from depth in <br /> the reservoir. Collection and sampling methodologies are aligned with the Sampling and Analysis <br /> Plan (SAP) submitted in the April 15, 1997 Eagle Park Reservoir data summary for the reservoir. <br /> Upon completion of the three-year period, a report will be submitted to the DMG that summarizes the <br /> data and compares tho reservoir water quality with in stream water quality and the applicable <br /> standards. An anti-degradation type evaluation will be included in this report. If the data demonstrate <br /> that degradation has occurred during the first three years of reservoir water delivery, DMG'S <br /> consideration of final approval of SR-002 will be continued while investigation is conducted into the <br /> source of contaminants that caused degradation to occur. The plan for the investigation will be <br /> developed by Climax and subject to DMG review and approval. If the investigation determines that <br /> the contaminant source is related to the operations of the Climax Mine, the source will be mitigated in <br /> accordance with a plan approved by the DMG prior to SR-002 final approval. If it is determined that <br /> the source of the problem is naturally occurring or the result of non-Climax activity, then no further <br /> action is required by Climax. <br /> Contingency monitoring and response will be performed as follows, <br />