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12/21/11 8:38 AM

#34587 RE: 73772832 #34580

CGFIA-From The Colorado Division of Reclamation, Mining and Safety 6

COLORADO GOLDFIELDS INC. RESPONSE
DRMS DEFICIENCY LETTER DATED SEPTEMBER 21, 2011
NOI P- 2011 -027
Deficiency Issue 4: Colorado Discharge permit System (WQCD); Degradation of Animas River
The Division's comments include the following statement: "Clearly, the proposed [NOI] activities have
potential to exacerbate the existing adverse impact to the water quality of the Animas River from the
Silver Wing Mine." Respectfully, we do not believe that type of conclusion is "clear" at all. As discussed
in more detail below, none of the proposed NOI activities will aggravate existing adverse impacts to
water quality. On net, they will help lessen existing adverse impacts. Truly, if one is to consider what
course of action has potential to exacerbate existing adverse impacts, doing nothing (i.e., no
investigation, no sampling, no clean -up of rubbish, no removal of sludge from the sediment pond, etc.)
arguably presents a greater threat than anything Colorado Goldfields has proposed.
In any event, Colorado Goldfields' proposed NO1 activities do not themselves trigger Section 301 NPDES
permitting requirements. Specifically, performing these particular activities does not involve or create
or in any way necessitate the discharge of pollutants from a point source into any state water. In fact,
the only discharge of water at the site — that from the existing mine portal — has been there for decades
and will continue percolating as it has whether or not the proposed NOI activities are carried out.
Past and present water sampling from the existing mine portal discharge does suggest that an NPDES
point source discharge permit will be required for future mining operations. In anticipation of this
requirement, Colorado Goldfields is working on putting together a permit application to submit to the
Colorado Water Quality Control Division. An integral part of this effort is the NOI, the purpose of which
is to determine (1) whether the existing portal discharge can be eliminated altogether and thus avoid
the need for a permit (at least for that particular discharge) in the first place, and (2), if the discharge
cannot be eliminated, what actions can be taken to minimize the discharge and, assuming a permit is
still required, what permit conditions would be most effective and appropriate for preventing discharges
of pollutants into the Animas River. In short, Colorado Goldfields is trying to find the best way to
address a very-long -term, pre- existing problem. The proposed NOI itself does not create the need for an
NPDES permit. Rather, the NOI merely represents a first step, followed if necessary by an NPDES permit
incorporating thoughtfully and appropriately tailored conditions.
As indicated above, Colorado Goldfields' proposed NOI activities will not aggravate existing adverse
impacts to water quality. On net, they will improve existing water quality:
• Investigate the sources of drainage and determine whether grouting or bulkheading is an
option to reduce or stop the drainage.
The primary impact from this activity will be stirring up sediments currently lying on the bottom of the
adit drift between the portal and the furthest penetration of the existing workings. This sediment will
be carried out of the portal to the existing sedimentation pond by the existing flow from the portal —
approximately 20 gpm. (This is the same material that is currently in the sedimentation pond.) A filter
will be incorporated at the discharge point of the sedimentation pond to filter out fine sediments prior
to discharge to the Animas River.

567

GL
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M_T_Pockets

12/21/11 8:48 AM

#34597 RE: 73772832 #34580

Thanks "Digits"!
I hope that is an acceptable nickname, I use it with all due respect intended, and only because I'm slightly dyslexic and would probably type my phone number instead! :-)

I / We mods do appreciate the kind words of encouragement. The Admins also deserve a note of thanks too. They watch this site and help out more than most readers realize.

CGFIA is going through the "darkness before the dawn" in my opinion. Your comment about being on the "edge of something special" reflects that of many others in the group of CGFIA followers, IMO.

I truly feel and trust that Mr Guyer and Mr Rice are doing everything they possibly can to make this company a success. Time will tell if our beliefs will pay off. That is what investing in pink slip stocks is all about. The proof will be a rewarding increase in all our portfolios!
Thanks for reminding the masses of the reality of trading at this level.

Happy Holiday to you and your family.
GLTY,
CGFIA