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DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866 -3567 <br />FAX: (303) 832 -8106 <br />January 25, 2013 <br />Thomas Hendricks <br />Calais Resources Colorado, Inc. <br />4185 Caribou Rd. <br />Nederland, CO 80466 <br />RE: Reason to Believe a Violation Exists at Cross Gold Mine; DRMS File No. <br />M- 1977 -410 <br />Dear Mr. Hendricks, <br />On January 17, 2013, the Division of Reclamation, Mining and Safety (Division) conducted an <br />inspection of the Cross Gold Mine and found the following: <br />The Operator has commenced development of the Cross Mine decline portal which was <br />approved through Amendment No. 1 on April 9, 2012. Approximately 500 tons of waste rock <br />generated from the development of the Cross Mine decline portal was stockpiled outside of the <br />currently approved 2 acre permit boundary. In addition, the Division has not received the <br />performance and financial warranties associated with the approval of Amendment No.1; <br />therefore, the revision has not been finalized. <br />Based on these findings we believe that this is a violation of: <br />AND <br />• C.R.S. 34- 32- 116(7)(h) for failure to protect areas outside of the affected land from <br />slides or damage occurring during the mining operation. <br />Therefore, we have reason to believe that a violation exists to DRMS File Number M -1977 -410 <br />and to the Law, and have scheduled this matter to appear before the Mined Land Reclamation <br />Board. <br />A Formal Public Hearing will be held during the March 13 and 14 2013 Board Meeting for <br />consideration of a possible violation. The hearing will be held in Room 318 of 1313 Sherman <br />Street, Denver, Colorado, beginning at 9:00 a.m. on March 13 or as soon thereafter as the <br />Office of Office of <br />Denver • Grand Junction • Durango Active and Inactive Mines <br />Mined Land Reclamation <br />STATE OF COLORADO <br />COLORADO <br />D I V I S I O N O F <br />RECLAMATION <br />MINING <br />— &— <br />SAFETY <br />John W. Hickenlooper <br />Governor <br />Mike King <br />Executive Director <br />Loretta E Pineda <br />Director <br />• C.R.S. 34 -32- 112(8) and C.R.S. 34- 32- 117(1) for failure to submit the supplemental <br />performance and financial warranties for additional acreage added through a <br />reclamation permit amendment, prior to affecting land associated with said <br />amendment. <br />