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STA~E~ C <br />DIVISION OF MINERALS AND GEOLOGY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 86fr3567 <br />FAX: (303)832106 <br />March 9, 2006 <br />COLORADO <br />Glen Williams <br />Cotter Corporation <br />P.O. 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 />MINERALS <br />GEOLOGY <br />RECLANATION•NININO <br />SAFETY•SCIENCE <br />Bill Owens <br />Govemar <br />Russell George <br />Executive Director <br />Ronald w. Cattany <br />Division Director <br />Natural Resource Trustee <br />On July 27th, 2005 the Division of Minerals and Geology noticed Cotter Corporation of an initial finding that the SM-18 <br />Mine fit the definifion of a Designated Mining Operation (DMO) Per Rule 7.2.1(1) of the Hazd Rock Rules and Regulations. <br />The initial fmding 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 operatlon. <br />Cotter Corporaton notified the Division within 30 days on August 26'h, 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`h, 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 clarify the modeling reports and other parameters lead to a final report being submitted to the Division on Febnuuy 8th, <br />2006. <br />Please find 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, stall' will be addressing each site individually for <br />its final recommendations. <br />The Division Staff has cazefully reviewed the report and modeling concerning the SM-18 Mine. The Division finds that <br />Cotter Corpomtion has satisfactorily demonstrated that the operation does not expose or disturb acid or toxic materials in <br />quanfities that adversely affect human health, property or the environment. Staff accepts that contaminates from the waste <br />rock or underground workings will not have a deleterious affect on the ground water quality in the 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 12th / 131° <br />Mined Land Reclamation Board 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 C <br />Minerals Program Supervisor <br />Cc: G. Russell Means, DMG Grand Junction (via email) <br />Cazl Mount, DMG Denver (via email) <br />Steve Landau, Cotter Corporation <br />Office of Office of Colorado <br />Mined Land Rxlamation Active and Inactive Mines Geologiral Survey <br />