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hd <br />COLORADO <br />DIVISION OF MINERALS AND GEOLOGY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 86(x3567 <br />FAX: (303) 832A706 <br />March 9, 2006 I/ <br />Glen Williams <br />Cotter Corpora4on <br />P.G. BOX 700 <br />Nucla, Colorado 81424 ~~ <br />Re: SM-18 Mine, Permit No. M-1978-716, Determination Of Non-Designated Mining Operation Status. <br />Deaz Mr. Williams: <br />COLORADO <br />DIVISION O F <br />MIN&RALS <br />GEOLOGY <br />0.EC LA MATION•NINING <br />SAFETT•EQENCE <br />Bill Owens <br />covemor <br />Russell George <br />Ezeclrtive Director <br />Ronald W. Canany <br />Division Director <br />Natwal Resource Trustee <br />On July 27th, 2005 the Division of Minerals and Geology noticed Cotter Corporation of an initial fmding that the SM-18 <br />Mine fit the definition of a Designated Mining Operation (DMO) Per Rule 7.2.1(1) of the Hard Rock Rules and Regulations. <br />The initial fmdittg was based on SPLP test results that showed toxic-forming materials were present in the waste rock and ore <br />that is being deposited at the surface of the operation. <br />Cotter Corporation notified the Division within 30 days on August 26'", 2005 that it disputed the initial findings and <br />requested time to develop information and facts to support its case in accordance to Rule 7.2.4(1). The Division on <br />September 2, 2005 acknowledged the dispute claim and set an initial date of October 17'", 2005 for submission of <br />information and facts for Division review in the matter. Several meetings, delays and extensions by both parties to collect <br />and clazify the modeling reports and other parameters lead to a final report being submitted to the Division on February 8t6, <br />2006. <br />Please fmd a copy of the final review of the modeling and report by our Harry Posey and Kate Pickford. The review, like the <br />reports submitted, covers four sites under DMO consideration. However, staff will be addressing each site individually for <br />its final recommendations. <br />The Division Staff has carefully reviewed the report and modeling concerning the SM-18 Mine. The Division finds that <br />Cotter Corporation has satisfactorily demonstrated that the operation does not expose or disturb acid or toxic materials in <br />quantities that adversely affect human health, property or the environment. Staff accepts [hat contaminates from the waste <br />rock or underground workings will not have a deleterious affect on the ground water quality in We immediate area. <br />Therefore, the Division is rescinding its initial designation of DMO per Rule 7.2.4(1)(a). The posting of the April 12m / 131h <br />Mined Land Reclamation Boazd Agenda shall Notice of the Final Decision by this Office. <br />If you need additional information, please contact me at the Division of Minerals and Geology, Grand Junction Field Office, <br />101 South Third Street, Room 301, Grand Junction, Colorado 81501, telephone no. 970-241-1117. <br />Sind, <br />H. Bmce Humphries ~ <br />Minerals Program Supervisor <br />Cc: G. Russell Means, DMG Grand Junction (via email) <br />Carl Mount, DMG Denver (via email) <br />Steve Landau, Cotter Corporation <br />Office of Office of Colorado <br />Mined Land Rxlamation ARive and Inactive Mines Geological Survey <br />