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/ <br />RIO GRANDE, <br />SILVER,, INC. <br />March 26, 2013 <br />Bob Oswald <br />Colorado Department of Natural Resources <br />Division of Reclamation, Mining and Safety <br />Durango Field Office <br />691 CR 233, Suite A -2 <br />Durango, Colorado 81301 <br />RECEIVED <br />8272013 <br />Division of Reclamation® <br />Mining & Safety <br />RE: Bulldog Mine Permit No. M- 1977- 215,.�ppeal of No tice of Pending <br />nesignatjon as a Designated Mining Operation, February 25, 2013 <br />Gentlemen: <br />ci (A), 3F-01, rco <br />The Division of Reclamation, Mining and Safety's (DRMS) letter dated February <br />25, 2013 provides notice (Notice) of DRMS's pending designation of the Bulldog Mine <br />as a Designated Mining Operation (DMO). Rio Grande Silver, Inc. (RGS) disputes the <br />pending DMO designation since our activities do not meet the criteria of C.R.S. § 34 -32- <br />103(3.5) or Rule 1.1(14), and hereby appeals the pending DMO designation in <br />accordance with Rule 7.2.4 of the Rules and Regulations of Hard Rock, Metal and <br />Designated Mining Operations (the "Rules "). As discussed below, RGS is hopeful that <br />this appeal can be resolved through subsequent discussions with DRMS. <br />As an initial matter, the currently approved and proposed activities at the Bulldog <br />are for mineral exploration or prospecting only (collectively "exploration "), and do not <br />constitute "mining operations" as defined at C.R.S. § 34 -32- 103(8). The ongoing <br />underground exploration activities are detailed in Technical Revision 18, which was <br />approved by DRMS in October, 2011. The proposed additional underground <br />exploration program is being evaluated by the United States Forest Service (USFS) <br />through an Environmental Assessment, which is currently in a 30 -day public comment <br />period. Because these activities involve only mineral exploration, they do not constitute <br />a DMO (which applies only to certain types of "mining operations ") as defined at C.R.S. <br />§ 34 -32- 103(3.5) and Rule 1.1(14). If and when mineral exploration shows the <br />feasibility of mining at the Bulldog, and RGS decides to move forward with "mining <br />operations," RGS will, in coordination with DRMS, evaluate whether such future <br />operations would qualify as a DMO. <br />DRMS's Notice letter provides five bulleted points in support of its pending DMO <br />designation for the Bulldog Mine. Responding to each of those points below, RGS <br />