PLAN OF OPERATIONS FOR SURFACE DISTURBING BASELINE STUDIES PROJECT , USA

U.S. Energy Corp. P.O. Box 629 Gunnison, Colorado 81230

Distribution:

2 Copies and one electronic copy – United States Forest Service, Gunnison, CO 1 Copy and one electronic copy – Bureau of Land Management, Gunnison, CO

March 31, 2010 Compilation December 7, 2010

TABLE OF CONTENTS

1.0 INTRODUCTION ...... 1 1.1 Background ...... 1 1.2 The Plan of Operations ...... 2 1.3 Potential Mine Operations...... 3 1.4 Timeline ...... 5 2.0 OWNER-OPERATOR AND LOCATION INFORMATION ...... 6 3.0 DEVELOPMENT ACTIVITIES ...... 6 3.1 Geotechnical Baseline Study ...... 7 3.1.1. Geotechnical Site Investigations ...... 7 3.1.2. Work Planned at the Points of Diversion and Storage Areas ...... 12 3.2 Surface Water Baseline Study ...... 13 3.2.1. Streamflow Measurements ...... 13 3.2.2. Water Quality Measurements ...... 13 3.3 Groundwater Baseline Study ...... 14 3.3.1. Possible Surface Disturbance and Mitigation Measures ...... 14 3.3.2. Site Restoration ...... 15 3.4 Structures ...... 15 3.5 Materials ...... 15 3.6 Water Use ...... 16 3.7 Solid Waste ...... 16 3.8 Mobile Equipment and Workforce ...... 17 3.9 Permits and Approvals ...... 17 3.10 Surface Disturbance ...... 18 4.0 SITE CONDITIONS ...... 19 4.1 Geology ...... 19 4.1.1. Geology/Seismicity ...... 19 4.1.2. Topography and Physiography ...... 20 4.1.3. Measures to Protect Scenic Values ...... 21 4.2 Land Use ...... 21 4.3 Cultural Resources ...... 22 4.3.1. Measures to Protect Cultural Resources ...... 22 4.4 Climate ...... 22 4.5 Air Quality ...... 23

ii 4.5.1. Measures to Protect Air Quality ...... 24 4.6 Water ...... 25 4.6.1. Surface Water Hydrology ...... 25 4.6.1.1 Carbon Creek Area ...... 26 4.6.2. Surface Water Quality ...... 26 4.6.2.1 Carbon Creek Area ...... 27 4.6.3. Groundwater Hydrogeology ...... 27 4.6.3.1 Mount Emmons Area ...... 27 4.6.3.2 Carbon Creek Area ...... 29 4.6.4. Methods to Minimize Impacts to Water Quality ...... 30 4.7 Soils ...... 30 4.7.1. Methods to Minimize Impacts to Soils ...... 31 4.8 Vegetation ...... 31 4.8.1. Sensitive Areas ...... 32 4.8.2. Threatened and Endangered and USFS Sensitive Species ...... 33 4.8.3. Methods to Minimize Impacts to Plants ...... 34 4.9 Wildlife ...... 34 4.9.1. Threatened and Endangered and USFS Sensitive Species ...... 35 4.9.2. Methods to Minimize Impacts to Wildlife...... 36 4.10 Noise ...... 36 5.0 ACCESS ROUTES ...... 37 6.0 RECLAMATION ...... 37 6.1 Slash Clearing ...... 37 6.2 Drill and Test Pit Pads ...... 38 6.3 Drill Hole Abandonment ...... 38 6.4 Revegetation ...... 38 6.4.1. Topsoil Application ...... 38 6.4.2. Species Selection ...... 39 6.4.3. Seeding and Planting ...... 40 6.5 Noxious Weed Control ...... 40 7.0 REFERENCES ...... 40

iii LIST OF FIGURES Figure 2-1 Site Map Figure 2-2 Project Area U.S. Energy Claims Figure 3-1 Photo of Typical Excavator Figure 3-2 Surface Water Monitoring Locations and Access Routes Figure 4-1 Parcel Ownership Figure 5-1 Access to Geotechnical Investigation Locations LIST OF DRAWINGS

Drawing No. 1a Mt. Emmons Project General Arrangement and Index Drawing No. 1b Mt. Emmons Project General Arrangement Topo Drawing No. 2 Mt. Emmons Project Potential Paste Plant Site Drawing No. 3 Mt. Emmons Project Reservoir No. 1 Drawing No. 4 Mt. Emmons Project Potential Mill Site No. 1, Water Treatment Plant No. 2 Drawing No. 5 Mt. Emmons Project Potential Mine Portal Drawing No. 6 Mt. Emmons Project Potential Mill Site No. 2 Drawing No. 7 Mt. Emmons Project Potential Tailing Facility No.1, Reservoir No. 2 Drawing No. 8 Mt. Emmons Project Potential Tailing Facility No. 2 Drawing No. 9 Mt. Emmons Project Reservoir 3 Drawing No. 10 Mt. Emmons Project Potential Tailing Facility No. 3 Drawing No. 11 Mt. Emmons Project Slate River Intake Facility No. 1

LIST OF TABLES

Table 3-1 Permit List Table 3-2 Proposed Prefeasibility Test Pit Locations Table 3-3 Proposed Prefeasibility Geotechnical Drill Hole Locations Table 3-4 Surface Water Monitoring Locations Table 3-5 Analyte List and Reference Water Quality Criteria Table 4-1 Climatic Data from a WRCC Weather Station at , CO (Station 051959) Table 4-4 Sensitive Species Recorded in the Area Table 5-1 Summary of Access to Surface Hydrologic Monitoring Locations Table 6-1 Candidate Graminoid, Forb and Shrub Species for Revegetation Seed Mix

iv LIST OF APPENDICES

Appendix A List of Claims Appendix B Unconsolidated and Bedrock Monitoring Well Construction Diagrams Appendix C Special Use Permits and Right of Way Permit Applications

v 1.0 INTRODUCTION

1.1 Background

U.S. Energy Corp. (USE), and the Mt. Emmons Moly Corp. (MEMCO) are proposing to develop an underground molybdenum mine and associated surface facilities near Crested Butte, Colorado, known as the Mount Emmons Project (Mine Project), where USE holds patented and unpatented claims located on land administered by the United States Forest Service (USFS), , Gunnison District and United States Bureau of Land Management (BLM) Gunnison Field Office. MEMCO would be the proposed operator of the Mine Project. The proposed underground molybdenum mine is located about 3 miles west of Crested Butte in Gunnison County. The Mine Project lies primarily within lands managed by the Gunnison National Forest and on patented lands owned by USE.

On April 15, 2008, USE submitted to the USFS a Baseline Study Plan (BLSP). Pursuant to the USFS’s request, the BLSP was formally submitted on May 23, 2008 as a Notice of Intent (NOI). By letter dated June 20, 2008, the USFS responded to USE’s NOI, advising USE that certain of the activities identified within the BLSP would need to be more fully addressed in a plan of operations.

In January 2009, USE submitted a Plan of Operations to the USFS. This 2009 Plan of Operations provided a proposal for activities associated with the Mine Project that are not a part of this initial Plan of Operations (PoO) and are not being pursued at this time. In response to the 2009 Plan of Operations the USFS issued a comment letter dated February 27, 2009, requesting additional information on certain aspects of the 2009 Plan of Operations. Because the nature and extent of activities proposed in the 2009 Plan of Operations are substantially different than what is proposed in this initial PoO, USE and MEMCO have determined that responses to the USFS’s previous PoO comment letter will not be included in this initial PoO. To the extent that the initial PoO has any continued relevance to the USFS’s prior comments, USE and MEMCO will provide written responses under separate cover.

In August of 2008, USE and MEMCO began to jointly explore development options for the Mine Project. Prior to MEMCO’s involvement, Kobex Resources Limited had partnered with USE on the development of the Mine Project. Since MEMCO’s involvement in the Mine Project extensive research, study, data collection and analysis has been underway to identify the issues and information needed to inform the potential development of a preferred mine operations plan for the Mine Project. As detailed below, this initial PoO will set forth the proposed scope of operations planned for the Mine Project over the next two years. The activities to be performed under this initial PoO are baseline studies and geotechnical evaluations, the data from which will be used to identify a mine operations plan for the Mine Project.

1 1.2 The Plan of Operations

Pursuant to 36 C.F.R. §228.4(d) and 43 C.F.R. §3802.1 this initial PoO sets forth the necessary baseline studies and geotechnical evaluations that must first be completed in order for USE and MEMCO to move forward systematically to advance the overall Mine Project, including the selection of a broader and more detailed mine operations plan. Specifically, the activities proposed to be undertaken in this initial PoO include: 1) the monitoring of wells (boreholes that intercept the groundwater table would be converted to monitoring wells; no piezometers will be installed); 2) installation of streamflow monitoring stations; and 3) geophysical site investigations with shallow test pits and boreholes. This initial PoO sets forth the proposed baseline data collection operations to the degree reasonably foreseeable at this time, within the context of also addressing the requirements of 36 C.F.R. §228.4(d) and 43 C.F.R. §3802.1.

The information collected during the Baseline Activities will serve multiple uses, including:

 Identifying areas associated with proposed facility locations that need additional review;  Providing information for use in the Mine Project design;  Providing baseline data needed to allow the USFS to evaluate the Mine Project under the National Environmental Policy Act of 1969 (NEPA, 1970), and to identify impacts and develop mitigation measures to those impacts; and  Collecting data necessary to advance permit applications for the Mine Project.

The results generated from the Baseline Activities will be used to evaluate the potential environmental effects to, and the suitability of, local sites selected as alternative locations for potential mine related facilities that will be included in future feasibility studies. The results from these ongoing pre-feasibility studies will be ultimately used to supplement this initial PoO. Supplemental PoOs will describe each component of the Mine Project, and will be subject to a full review under NEPA.

2 1.3 Potential Mine Operations.

As noted in Section 1.2, this initial PoO sets forth the Baseline Activities that are necessary to proceed with developing the next phase of the Mine Project, which is to identify and prepare a supplemental PoO that details the proposed mine operations. Any plan of operations that may be developed for the Mine Project will be reviewed by state and federal regulatory agencies and will be subject to an environmental impact analysis and study as part of the permitting process. The overview provided below of the potential Mine Project is only a preliminary description of potential mine operations. This preliminary, initial description of potential operations at the Mine is meant to provide only a reference point for the Baseline Activities proposed to be conducted under this initial PoO. This initial PoO does not cover or address the Mine Project, but only the Baseline Activities associated with the potential Mine Project.

USE is evaluating the feasibility of developing an underground molybdenum mine and associated surface facilities, known as the Mount Emmons Project, on patented, unpatented, and mill site claims held by USE located on land administrated by the USFS, Gunnison National forest Gunnison District and the BLM Gunnison Field Office. The potential Mine Project area consists of 9,311 acres of claims including 365 acres on 25 patented claims.

USE is evaluating the feasibility of developing the Mine Project as an underground mine with the following related facilities:

 Three water storage reservoirs,  Two points of water diversion for water rights,  Utilize one mill site out of three alternatives that are currently being studied,  Utilize one tailings facility out of three alternatives that are currently being studied,  One paste plant location for mining activities,  One mine portal for mining activities, and  One water treatment plant.

3 The molybdenum deposit is located beneath the west flank of Mount Emmons. The ore will be accessed by drilling and blasting a series of tunnels ―workings‖ within and adjacent to the deposit. A primary access tunnel will be constructed to facilitate access by workers and transport of the ore to the surface facilities. Estimates of ore production that could result from the Mine Project will be prepared as development of the future Mine Project plan of operations proceeds. However, previous proposed operators of the Mine Project estimated that ore production could be 6,000 tons per day or greater.

As one step in the overall development and operation of the Mine Project, USE obtained a Final Decree on July 25, 2002 from the Water Court, Water Division No. 4 in Case No. 96CW3 11 (Final Decree), confirming conditional surface water and storage rights associated with five structures in the upper Gunnison River Basin. These structures will consist of two surface points of diversion; (1) the Slate River Intake, and (2) Carbon Creek Intake; and three storage reservoirs: (1) the Elk Creek Reservoir, (2) the Mill Water Reservoir, and (3) the Carbon Creek Reservoir. Once perfected, these decreed water rights will be part of a comprehensive and integrated system of direct flow and storage rights and facilities used for development and operation of the mine and related facilities. Water diverted at the Slate River and Carbon Creek Intakes will be directly applied to mine and mill development and operations and/or delivered to the three Reservoirs via water delivery pipelines. Consistent with the Final Decree, the water will be used for all industrial purposes associated with the Mine Project, including but not limited to dust suppression; operation of drills; mining, grinding, and processing of ore; transportation of tailings; evaporation replacement; backfilling of the mine; cooling; and fire suppression, as well as some domestic use and lawn and park irrigation at mine and mill facilities.

4 1.4 Timeline A theoretical timeline for these Baseline Activities, and future activities, currently under consideration is as follows:

No. Milestone Action Review Completion 1.Environmental – Prepare and file updated PoO and any NEPA 2010 2011 required initial Special Use Permit, Right of Way review Permits and County Permits. The SUP and ROW applications are preliminary and will require further preparation and work before they are finalized.

2.Environmental – Geotech Baseline Data Collection Fieldwork - 2011 3.Economic Prefeasibility – Feasibility 2011 2012 Inhouse Evaluation; continued, approved data Study collection 4.Supplemental PoO 2012 2014 NEPA review 5. Permitting 2012 2014 Permit Applications - Prepare and file all additional permits necessary to proceed with any proposed Mine Project. 6.Initial Mine Plan Development Construction 2014 2016 7.Mine Plan Operation Operation 2016 2036 8.Mine Decommissioning Reclamation 2036 2039

The following timeline is contingent upon many reviews and approvals both regulatory and economic which will adjust the timeline as we move forward with each permitting action.

The following sections set forth the information required for a PoO. Section 2 details the owner, operator and location information. Section 3 provides a description of the Baseline Activities. Section 4 provides a description of the existing environment. Section 5 describes the proposed access routes and means of transportation that are to be used in connection with the Baseline Activities. Section 6 details the proposed mitigation and reclamation methods to be used in connection with the Baseline Activities.

5 2.0 OWNER-OPERATOR AND LOCATION INFORMATION

Owner Name and Contact Information:

U.S. Energy Corp. (USE) P.O. Box 629 120 N. Boulevard Gunnison, CO 81230 Attn: Fred Craft, V.P. Engineering (970) 641-4996 (307) 851-1209 Cell Operator Name and Contact Information Mt. Emmons Moly Corp. (MEMCO) P.O. Box 629 120 N. Boulevard Gunnison, CO 81230 Attn: Randy MacGillivray, Director Environmental Affairs (970) 641-4996 The Baseline Activities proposed in this initial PoO are located in portions of Section 31, Township 13 South Range 86 West; Sections 5, 6, 19, and 28-30, Township 14 South, Range 86 West; and Sections 1, and 24, Township 14 South Range 87 West Sixth Principal Meridian. Figures 2-1 and 2-2 show the general location of the study area. For the location of patented and unpatented claims, the boundaries are noted on Figure 2-2. Please see Appendix A for a full list of all mineral claims.

3.0 DEVELOPMENT ACTIVITIES

Provided in this Section is a discussion of the proposed Baseline Activities, which include geotechnical, groundwater, and surface water evaluations. As noted below, the area proposed to be studied in the course of the Baseline Activities is one that may be affected by the Mine Project. While there exists the possibility that some activities undertaken in connection with the Baseline Activities could result in minor surface disturbances to the area studied any impact will be minimal upon the Mine Project area, and there will likely be no disturbance to the public.

While disturbance to the public is not anticipated, if upon NEPA review it is determined that a public communications plan is required USE and MEMCO will oversee the development and implementation of such a plan. Currently, USE and MEMCO have in place a website for the Mine Project that the public may access to learn about the Mine Project. USE and MEMCO will continue to provide the public with updates and details related to the Mine Project, including the Baseline Activities.

6 3.1 Gotechnical Baseline Study

An air-photo analysis and geohazard assessment of the proposed tailings storage facilities (TSF), water storage reservoirs (WSR), and plant site layout options was completed and the results were detailed in the BLSP. A program of surficial and sub-surface investigations is required to further characterize geotechnical conditions at the proposed tailings, water storage, and plant site locations. Additional geotechnical site investigations are expected to include: surficial mapping, geophysical surveys, test pit excavation, and drilling. The site investigation program, as outlined below, is anticipated to commence July 1, 2011 and be completed with concurrent reclamation by November 15, 2011, dependant upon weather conditions and suitable ground conditions and concurrent with USFS approval.

3.1.1. Geotechnical Site Investigations

Surficial Mapping

Surficial mapping must be completed across the site to confirm and ground-truth the air-photograph interpretation and geohazard assessment set forth in the BLSP. This mapping will comprise of helicopter reconnaissance and several days of surficial traversing on foot in areas of geotechnical interest. Existing roads and trails will be utilized where possible, but helicopter transport to areas with compromised access may be required.

Additionally, detailed surficial mapping of exposed soil and bedrock outcrops will be conducted within each of the proposed TSF and WSR dam alignments and impoundments, at the proposed plant site locations which include mine portal, paste plant location and mill sites, and within the proposed borrow sources for dam and liner construction.

Geophysical Surveys

Geophysics will be used to identify and interpolate subsurface stratigraphy in areas between geotechnical drill holes. Geophysical surveys will be completed on foot with little surface disturbance activity required. However, in heavily forested areas there may be the need to cut lower limbs to allow for access on foot along the projected survey line.

7 The geophysical survey method being pursued utilizes seismic methods. Seismic methods are the most commonly conducted geophysical surveys for engineering investigations. Seismic data provides engineers and geologists with the most basic information related to the elastic properties (strength) of rocks using well understood geophysical procedures and common equipment. Seismic waves are created using an impulse source such as a hammer or shotgun. These seismic waves travel into the ground and this energy is partitioned. When the seismic waves reach a rock layer that has a different impedance (related to the velocity and density), some of its energy is reflected back to the ground surface; some is refracted along the interface, and some continues deeper into the ground. As the refracted wave travels along the interfaces, energy is continuously transmitted back to the ground surface. Geophones are placed on the ground surface to detect the reflected and refracted waves. Geophysicists then compare the resulting profiles with the empirical data collected from the diamond drill holes and test pit cross-sections.

A crew of 5 field technicians would access the site by pickup truck to the nearest drop off point and travel by foot to the cross-section line. USE and MEMCO are investigating the precise seismic testing method that will be selected. Testing will be conducted on private land to determine the preferred seismic testing method to be employed in the Baseline Activities. USE and MEMCO will provide advance written notification to the USFS upon selection of a proposed seismic testing method.

Test Pit Excavation

A program comprising of 26 test pits is proposed to investigate and characterize near-surface soil deposits in the vicinity of the alternative tailings and water retention dams. The name and location of each proposed test pit is listed on Table 3-2 and shown on Drawings No. 2 through 11. The locations of these test pits are not fixed and will be tailored to the site conditions to minimize any potential surface or environmental disturbances.

Test pit excavation will be completed with a Cat 301 mini excavator (or equivalent) that can walk to sites on existing roads, across open ground, or be air lifted to other sites. These test pits will be comprised of excavated holes that could be up to 9 feet deep at each proposed location. The test pit size will vary depending upon ground conditions but on average will be up to 9 feet deep and 20 feet wide and 10 feet long. Estimated disturbance for each test pit is 900 square feet. No test pit will be excavated into bedrock. Remediation measures will be taken so as to remedy the disturbance that will result from the test pit excavation. Material removed from a test pit will be placed adjacent to the test pit and replaced once data has been collected from the test pit. It is anticipated that most test pits will only be required to remain open for

8 one day. Data collection is expected to be completed on the same day that the test pit is dug, allowing for the filling of the test pit on the same day that the pit was dug. The test pit will be backfilled with the same material removed from the test pit in the reverse order to maintain a similar stratigraphy. Should the test pit need to remain open over night the pit will be protected utilizing an orange safety barrier fence placed around the outside of the pit to prevent access to the pit. The test pit will be backfilled as soon as possible after data collection. (Please see Section 5 for a discussion of access to the proposed test pit locations.) See Figure 3-1 for a photo of a typical excavator utilized in excavations such as the one proposed here. The rubber tracked mini excavator anticipated to be utilized in these Baseline Activities would be a Cat 301 or equivalent. The weight of a Cat 301 is less than 5,000 pounds, which allows for it to be air lifted to remote test pit sites.

Geotechnical Borings

Up to 25 drill holes will be completed at the proposed locations of the proposed plant facilities, proposed tailings facilities, and water-retaining dams as listed in Table 3-3 and as shown on Drawings No. 2 through 10. Proposed plant facilities include the paste backfill plant, the mine portal and the mill site. These drill holes will allow for the collection of geotechnical data of the surface and underlying material down into bed rock formations. The locations of the drill holes may be field fit to reduce surface disturbance. The drill holes will vary in depth. All drill holes will be completed using HQ3 triple tube diamond coring and standard penetration testing (SPT) in overburden. All recovered drill core will be logged at the drill site and sampled for characterization of foundation materials and will then be shipped to the landing/staging site for further offsite testing. The use of drilling additives is not proposed at this time. No cut and fill, building of platforms for site preparation will be required. The drill rigs will utilize wood blocking to level the drill rig. Site preparation and selection will be tailored so as to minimize potential surface or environmental disturbances. Pad sizes are limited in size; approximately 1,800 square feet. The geotechnical drill holes will be a maximum of 3 inches wide and the depth will vary from 130 feet to 300 feet deep. The air lifted and track mounted rig described below, will be capable of reaching the target depths.

Baseline Activities work may occur on any day of the week, during daylight hours between July and November 2011. Drilling operations will commence July 1, 2011, weather permitting. Actual field work is subject to the availability of the helicopter selected and the drilling contractors selected. The drilling contractors selected will provide USE and MEMCO a proposed schedule of operations. While not known at this time, it is possible that the work schedule will provide for two-weeks of work followed by two-weeks

9 off. The work schedule will be contingent upon weather and any existing contractual obligations that the helicopter operator may have with the USFS. The final work schedule will be flexible so as to allow for these and other contingencies.

Two basic types of drill rigs will be used to complete these site investigations:

Helicopter Portable Drill Rig: A lightweight, minimal footprint, drill rig would be air lifted in pieces to the drill site using a cable line attached to a helicopter. The bore hole sites are located in natural clearings allowing the equipment to be air lifted into the sites with minimal ground and vegetation disturbance. Drill machines used for the air lift would be Longyear Model HC- 150 or Christenson CS 1000 P4 or equivalent. All of these drills are portable and can be taken apart in approximately 2,500 pounds or less for air lifting. Each drill unit will have a mast, draw works, deck, diesel engine for power supply, drill steel, drill bits, drill cutting collection tubs, a recirculation pump for delivering drill fluids back to the drill hole and fresh water containers.

Fresh water and drill fluid will be moved by gravity and/or pumps through piping/hoses. At each bore hole site a core of a nominal size HQ will be collected for the total depth of the hole. This core will be reviewed by an onsite geologist then shipped back to the landing/staging site for further testing/and review. Each drill rig consists of approximately 25 pieces and parts that will be air lifted into and out of each site. Drilling manpower will also be transported by air or overland trail to the drill site. The drill time at each bore hole will vary with the depth; each borehole is estimated to take from 2 to 6 days.

The staging area for the helicopter would be located near the existing water treatment plant and private land in upper Carbon Creek. See Figure 5-1. The flight routes will be direct from the staging areas, near the water treatment plant private land and ranch land identified on Figure 5-1 and Drawing No. 1a. to the site in which the drilling would be accomplished. The periods of operation would be during daylight periods. The helicopter will also be utilized to move the mini excavator to test pit locations. While audible, helicopter usage will be of limited duration. Further, the proposed usage of the helicopter will be comparable to and no greater than other USFS uses. It is the intent of USE and MEMCO to contract with an existing USFS helicopter contractor.

10 Track Mounted Drill Rig: This option involves the use of a lightweight, minimal footprint, drill rig that is similar to the air lifted drill rig but mounted on a track undercarriage system. Drill rig can be Longyear Model HC-150 or Christenson CS 1000 P4 or equivalent. This allows the track mounted drill rig to travel to drill sites utilizing its own power over existing roads or via approved overland routes. The overland travel would be to the paste plant site, potential mill site No.1 and 2, water treatment plant no. 2, potential tailings facility no.2 and the Slate River site. Each drill unit will have mast, draw works, deck, diesel engine for power supply, drill steel, drill bits, drill cuttings collection tubs, recirculation pump for drill fluid back to hole and fresh water containers. Fresh water and drill fluid will be moved by gravity and/or pumps through piping/hoses. At each bore hole site a core of a nominal size HQ will be collected for the total depth of the hole. This core will be reviewed by an onsite geologist then shipped back to the landing/staging site for further testing/review. Each drill rig can consist of approximately 25 pieces and parts that will be air lifted into and out of each bore hole site. Drilling manpower will also be transported via air or overland trail. The drill time at each bore hole will vary with the depth will vary, but each borehole is estimated to take 2 to 6 days.

The proposed drillhole locations and area of investigation are summarized in Table 3-3. Please see Section 5 for a discussion of access to the proposed drill locations.

Drill cuttings will be settled in portable tanks with drill fluid (water) recycled back for drilling. At end of the drilling activity, the settled cuttings will be replaced into the drill hole not developed into a monitoring well and/or removed back to the staging area for disposal at a permitted facility. Drill fluid (water) will be allowed to infiltrate into surrounding soil; surface erosion will be minimized with the use of best management practices (BMPs) including a silt fence. Additional mitigation efforts that will be considered and used if necessary include wattles or straw bales. These BMPs prevent channeling and the spread of water flow overland in a very low speed to prevent erosion.

It is expected that two helicopters will be used in the course of the Baseline Activities. Helicopters that are anticipated to be utilized are similar to Bell Super 205 and/or Kaman K1200 Kmax and/or Euroocpter SA3 1 5B Lama. These helicopters are specialized for lifting heavy loads in mountainous terrain. The flight path will be direct from one of the two landing/staging sites to the test pit or borehole sites. Flight time should be of short duration as the flight distance varies from Y2 mile to 2 Y2 miles. The two land/staging areas are accessible via good existing dirt roads connected to county roads and paved roads. Fuel for the helicopters will be transported to the land/staging sites via over the road truck/trailer transport. Fueling will be setup at the landing/staging sites to prevent and contain any potential spillage and allow for the

11 effective fueling of aircraft while protecting the aircraft, people, and environment. Only trained aircraft personnel will be permitted to fuel aircraft.

Landing and staging sites will have portable toilets and trash containers. All trash will be collected and sent to a local landfill that can accommodate the waste generated. For instance, garbage, waste paper etc. will deposited at the Gunnison land fill. Used oil will be sent to a recycling facility, which has yet to be indentified. Sewage will be sent to a contractor who is licensed to dispose of the sewage into the Gunnison sewage system. Any maintenance done on the aircraft will be done by trained personnel. All waste resulting from these maintenance activities will be disposed of in accordance with state and federal laws at an offsite location.

3.1.2. Work Planned at the Points of Diversion and Storage Areas.

Slate River. Geotechnical test pit work will be completed at this diversion location in order to determine subsurface material. One test pit will be dug at Slate River utilizing the excavator described in this initial PoO.

Reservoir No. 1, Elk Creek. Test pits and bore holes are planned for geotechnical data collection at Reservoir No.1.

Reservoir No. 2, Mill Water. Test pits and bore holes are planned for geotechnical data collection at Reservoir No.2.

Reservoir No. 3, Carbon Creek and Carbon Creek Diversion. Test pits and bore holes are planned for geotechnical data collection at Reservoir No.3 and at the Carbon Creek Diversion. The Carbon Creek diversion is 316 feet from the Carbon Creek Reservoir.

Stream monitoring (flow and/or quality) will be conducted in the following areas:

 Coal, Elk, Ohio, Carbon, and Oh-Be-Joyful Creeks;  Evans, Red Lady, Coon, Redwell, and Wolverine Basins;  Splains Gulch;  Slate River; and  Mount Emmons Iron Fen.

12 3.2 Surface Water Baseline Study

3.2.1. Streamflow Measurements

Flow will be monitored in various streams throughout the course of the Mine Project area to document baseline hydrologic conditions as listed in Table 3-4 and shown on Figure 3-2. These monitoring locations have already been proposed as seasonal locations under the NOI. As proposed here, data will be collected throughout the year and not just seasonally.

Streamflow monitoring at the 20 stations located at major streams and tributaries distributed throughout the Mine Project area will utilize water level (stage) records to estimate streamflow from stage-discharge relationships for each station. Stream stage will be measured and logged using electronic pressure transducers installed in 2-inch diameter slotted PVC or steel piping. A section of small-diameter steel reinforcement bar will be driven into the streambed and will be used to fasten and position the PVC pipe and staff gauge in the water column, or the pipe can be rock bolted to a suitable boulder or exposed bedrock.

The cross-sectional area of the stream and direct measurements of streamflow will be conducted at each gauging station to establish a stage-discharge rating curve. Streamflow measurements will be made with an anemometer or propeller type meter (e.g., Price AA or Pygmy). Periodic stream surveys will be conducted regularly to maintain representative stream section profiles and rating curves.

If flow conditions at a particular location are too low to obtain reliable measurements using electronic pressure transducers, the volumetric method will be applied. Measurement of flows by the volumetric method is determined by measuring the time it takes to fill a container of known volume. This type of measurement is usually made where the flow is concentrated in a narrow stream channel.

The pipe and staff gauges will be removed when the measurement of flows is completed.

3.2.2. Water Quality Measurements

The type of water quality sampling to be conducted at the monitoring locations will be grab samples. A grab sample will be collected by hand during a single sampling event using appropriate sampling containers. It is proposed that the monthly water quality sampling be conducted year round and not just

13 seasonally. The analytes and field parameters that may be sampled and analyzed as part of water quality monitoring are listed in Table 3-5.

3.3 Groundwater Baseline Study

The proposed boreholes described above that intercept water bearing formations would be converted to groundwater monitoring wells to characterize baseline groundwater conditions as part of the hydrologic monitoring program. Boreholes that are dry and did not intercept ground water would not be converted to monitoring wells. Construction of the wells will be conducted in accordance with State of Colorado Well Construction requirements (2 CCR 402-2, Rule 14 Minimum Construction Standards for Monitoring and Observation Wells, Monitoring and Observation Holes, and Test Holes). The monitoring wells will be used to monitor groundwater levels and groundwater quality. The potential monitoring wells for the Mine Project are the same as the proposed geotechnical boreholes, listed in Table 3-3 and shown on Drawings No. 2 through 10. It is proposed that monthly sampling at the groundwater monitoring locations be conducted year round and not just seasonally.

3.3.1. Possible Surface Disturbance and Mitigation Measures

The wells will be installed by a licensed Colorado well driller and will be constructed in compliance with the State of Colorado Water Well Construction Rules (2 CCR 402-2). The wells will be installed using low- impact drilling methods (installed in bore holes drilled for geophysical testing). USE and MEMCO will work directly with and manage the drilling contractor to ensure that all access and site preparation work is conducted according to pre-approved USFS procedures and in a manner to minimize impacts and disturbance. Monitoring well construction will consist of 3-inch PVC pipe with a flush-threaded, machine slot screen. A protective pipe will extend approximately 1.5 meters above the ground surface. Manufactured filter-pack material composed of silica sand will be used within the screen intervals for each monitoring well. The wells will be sealed to prevent contaminants from entering the borehole, and to avoid cross-connection of different water-bearing zones. The sealing material, placement, and curing time will follow Colorado State Water Well Construction Rules (2 CCR 402-2). Please see Appendix B for well construction diagrams.

Up to two monitoring wells would be located within the vicinity of the Mt. Emmons Iron Fen area. No adverse impacts to the Mt. Emmons Iron Fen are expected. Any monitoring wells located in this area will be used for ground water monitoring tests. There will be no dewatering activities from these wells.

14 Water produced during development of the monitoring wells will be discharged to a portable tank(s) to contain the water and avoid direct runoff.

3.3.2. Site Restoration

Restoration will be implemented at each drilling site following completion of the monitoring well and each test pit after the pit has been backfilled. The restoration work will incorporate specific USFS requirements for reclamation to ensure that the land around each drill site and test pit location is properly reclaimed. The reclamation work currently proposed will: 1. Remove from the site all equipment, debris, surplus materials, straw wattles, and other materials utilized during drilling operations; 2. Drill cuttings placed back into drill hole or removed from drill site to staging area. Test pits will be backfilled; and 3. Re-seed the area according to USFS requirements.

3.4 Structures

There will be no fixed structures associated with the proposed Baseline Activities. The staging area will be from the water treatment plant area or the Ranch area in upper Carbon Creek. No living quarters, storage sheds, trailers, sewage disposal, etc. will be required to complete the excavations or drill holes. Temporary facilities required for the Baseline Activities include mobile toilets, mobile fuel supply tanks/trucks, storage for parts to support activities, water trucks and a parking area for support vehicles. All of the portable ancillary facilities, such as mobile toilets and mobile fuel supply tanks/trucks, will comply with state and federal regulatory requirements.

No power line upgrades or new power utility work is proposed.

3.5 Materials

No hazardous substances will be generated from the Baseline Activities. Diesel fuel and Jet A or helicopter fuel are the only regulated material that will be used during the Baseline Activities. It is proposed that diesel fuel/Jet A fuel will be transported and stored in a USFS approved tank and placed on a secondary containment system which will then be placed on a mobile service vehicle. When not in use, the mobile service vehicle will be located and maintained at a site, which will be guarded 24-hours a day. Diesel

15 fuel will be air lifted in tanks/ drums to the bore hole site and placed on a secondary containment system. However, a final use and storage plan for diesel fuel/Jet A fuel will be completed upon consultation with the USFS and after NEPA review.

Prior to the commencement of the Baseline Activities, a Stormwater Management Plan (SWMP) is required to be developed and submitted to the Colorado Department of Public Health and Environment (CDPHE). After review of the SWMP, USE and MEMCO will work with CDPHE to identify any additional permits or approvals that may be required to proceed with the Baseline Activities. Given the limited duration and nature of the Baseline Activities, it is also possible that no permit from the CDPHE will be required. However, if a permit(s) are required by the CDPHE, USE will apply and obtain such permit(s) before the commencement of any Baseline Activities. The SWMP will include an inventory of petroleum products, spill prevention and spill response procedures. No explosives will be used in the course of the Baseline Activities.

3.6 Water Use

Water will be required for drilling. The drill uses on average less than 1/2 gpm of water. The water required for drilling will be purchased from a local water source. Water will be transported by a licensed over the road water tanker. The water tanker operator will obtain the water from a permitted water source. As set forth on Table 3-3, the water purchased for drilling will be transported by vehicle where road access is available, or by air. All water used in the drilling process will be directed to a portable settling tank. Once the water and sediment has separated, the water will be allowed to infiltrate into the surrounding soil. This is commonly done in diamond drilling and in the exploration industry. The assumption for sizing the water conveyance and storage facility to supply water to the drill rig is that the amount of water required is minimal, i.e. less than 1/2 gpm.

3.7 Solid Waste

No significant quantities of solid waste are anticipated. The limited amount of domestic refuse generated will be collected and removed from the site and disposed of at the Gunnison County Landfill.

16 3.8 Mobile Equipment and Workforce

Mobile equipment used to perform the geotechnical study will include:

 Service truck – travel as required from town to landing/staging areas.  Water truck – travel as required from water source to landing/staging areas.  Mini rubber Tracked Excavator (or equivalent) – see Section 3.1.1.  Portable drilling and drilling equipment - see Section 3.1.1.  Track mounted drill rig - see Section 3.1.1.  Passenger vehicles – daily travel providing transportation for supplies and crew to landing/staging areas and as needed to service track drill rig.  ATV – as needed to service track drill rig.  Helicopter – Service/Fuel Trucks - see Section 3.1.1.

Water monitoring will use passenger vehicles, snowmobiles, ATVs and foot access.

Daily bore hole and test pit workforce will consist of eighteen (18) workers who will work seven days per week in the field. Visitors, regulators and service personnel are not considered as fulltime field workers. There are no planned temporary seasonal closures. Field crews will work in a rotating schedule allowing for daily activities, but should the contractors require days off with no relief, the field activities will be stopped until crews are able to continue work. Weather could force work stoppage for several hours or several days.

3.9 Permits and Approvals

Set forth below is a list of all known permits that are required to conduct the Baseline Activities. Attached to this initial PoO at Appendix D are those applications for Transportation and Utility Systems and Facilities on Federal Lands. As detailed below, State and local permits are required for the Baseline Activities.

17 Table 3-1. Permit List Federal Government USFS Gunnison National Forest Plan of Operations (Approval through environmental U.S. BLM Gunnison Office analysis as required by the National Environmental Policy • Act) • Endangered Species Act Section 7 Consultation (May require • Biological Assessment in consultation with the U.S. Fish and Wildlife Service) Applicable SUP/ROW approval as required State of Colorado Colorado Department of Public Health and • Permits as required by the CDPHE Environment Colorado Division of Reclamation, • Notice of Intent Mining, & Safety Colorado Division of Water Resources • Monitoring and Observation Well Permit Office of Archaeology and Historic Section 106 Review of historical property under the National Preservation Historic Preservation Act (NHPA). Consultation with the State Historical Preservation Officer (SHPO) who coordinates historical preservation activities in the state. Colorado Department of Labor & Safety Regulation Compliance (No Permit) Employment Local Gunnison County Land Use Regulations, Reclamation Permit

3.10 Surface Disturbance The total estimated disturbance associated with this plan is approximately 1.45 acres. Federal BLM land disturbance is 0.02 acre and federal USFS disturbance is 1.14 acres. Private land disturbance is 0.29 acre. The area has been estimated as follows:  25 geotechnical boreholes/monitoring wells constructed using air lifted drill rig and track rig (approximately 1800 sq ft per site) requires approximately 1 acre of disturbance; and  26 test pits using a mini excavator (approximately 900 sq ft per site) requires approximately 0.4 acre of disturbance.  6 test pits and 4 bore holes on private land. Note: 6 test pits have been combined at the same location with 6 bore holes reducing the total disturbance.

No construction of access roads will be required. The boreholes in upper Carbon/Ohio Creek will be accessed by a two track existing road in Splains Gulch and then overland to the bore holes located at proposed mill site no. 2. Access to the proposed drill holes at the proposed water treatment, proposed mill site no. 1, proposed paste plant and proposed tailings facility will be via existing roads.

18 4.0 SITE CONDITIONS

The following sections provide background information on the site’s existing environmental conditions. Much of the information contained in this section is drawn from previous studies conducted at the site for the Mount Emmons Environmental Impact Statement (EIS) prepared by the USFS (1982a, 1982b). Where appropriate, we have included in this initial PoO descriptions of ongoing or planned future studies.

4.1 Geology

4.1.1. Geology/Seismicity

The geology of the Mount Emmons area has been studied and mapped in detail to facilitate previous mining activities. The Draft EIS (USFS, 1982a) provided a summary of the results of the geologic work completed to date. The oldest geological formation in the Mount Emmons area is the Mancos Formation of Cretaceous age. The Mancos Formation is approximately 4,000 feet thick and consists predominantly of shale with minor limestones, sandstones, and siltstones. The upper part of the formation hosts the lower portion of the Mount Emmons MoS2 deposit.

Overlying the Mancos Formation is the Mesaverde Formation, also of the Cretaceous age. The Mesaverde Formation is approximately 900 feet to 1,500 feet thick and is comprised predominantly of sandstone with minor siltstones. The lower portion of the Mesaverde Formation hosts the majority of the MoS2 mineralization.

The Ohio Creek Formation of Tertiary age overlies the Mesaverde Formation. The Ohio Creek Formation is approximately 300 feet to 600 feet thick and is comprised of coarse-grained feldspathic sandstone. No MoS2 ore occurs in the formation although it has been affected by hydrothermal alteration. Overlying the Ohio Creek Formation is the Wasatch Formation, also of Tertiary age. The Wasatch Formation consists of about 700 feet of conglomerate sandstones and siltstones all with a significant volcanic component. No MoS2 ore occurs within the Wasatch Formation.

Each of the rocks described above dip approximately 15 to 20 degrees to the southeast and outcrops regionally. These rocks have been intruded by a series of intrusive magmatic events, which have altered and mineralized the sedimentary rocks described above. The Mount Emmons stock is the main intrusive stock and is comprised of four intrusive bodies, named by decreasing age, Red Lady, Keystone, TXP and

19 Union. The Red Lady stock has a K/Ar (potassium /argon) age of about 17 million years. The Red Lady stock is the source of the main MoS2 mineralization and hosts approximately 20 percent of the MoS2 mineralization. At the 10000 level (or 10,000-foot elevation), the stock is almost circular in shape with a diameter of about 1,500 feet.

The geology of the Carbon Creek area is located at an altitude of 9,500 to 10,000 feet above mean sea level (amsl) in a valley surrounded by , Mount Axtell, , and Red Mountain. The Carbon Creek valley, which shows erosion into igneous and sedimentary rocks, was modified by glaciers that have cut relatively steep canyon walls and left large quantities of loose material throughout the area. Bedrock at this site includes sedimentary rocks of late Cretaceous and Tertiary age that have been intruded by igneous rocks of Tertiary age. The oldest sedimentary rock exposed in the area is the Mesaverde Formation, consisting of sandstones and shales. The Ohio Creek Formation, consisting of sandstones and conglomerates, overlies the Mesaverde Formation. The thickness of the Ohio Creek Formation is approximately 900 feet. In most of the area the formation is poorly exposed, except along the banks of the streams tributary to Carbon Creek north of Carbon Peak. The Wasatch Formation is usually poorly exposed and occurs beneath surficial deposits of rock glaciers, talus, and morainal deposits. constitutes most of the mass of Carbon Peak, Mount Axtell, and Whetstone Mountain.

Colorado is a minor seismic risk area. The Colorado Geological Survey conducted an extensive investigation of earthquake potential in Colorado in 1978 (Kirkham and Rogers, 1978). A search of all historic events within a 199-mile radius of the Mine Project indicated 229 reported events. Of these, 17 were within a 62-mile radius of the Mine Project area. Only two historic earthquakes within a 62-mile radius of the Mine Project area caused damage. No recently active fault traces have been mapped in the area (Walsh, 1980). Earthquake intensity and history will be re-evaluated during the completion of the detailed mine design and for the NEPA process.

4.1.2. Topography and Physiography

The Mine Project site is located approximately 3 miles west of the Town of Crested Butte, Colorado at elevations between 9,300 feet and 10,600 feet amsl. The region consists of steep rock terrain commonly with slopes of 2 horizontal to 1 vertical (H:V).

20 In the vicinity of the Mine Project site the general mountain range runs approximately southeast to northwest with intervening narrow valleys. Steep tertiary drainages flow into the larger secondary drainage of Coal Creek south of the Mine Project site.

4.1.3. Measures to Protect Scenic Values

As noted above, the Baseline Activities will be conducted on 1.6 acres of land located within the Mine Project area. The disturbance anticipated to this 1.6 acre area is minimal, as are the visual impacts. The Baseline Activities will incorporate the use of small drill rigs that are air lifted to the testing site locations. The helicopter used to transport these rigs will leave no permanent visual impact on the area. Helicopter staging areas will be established as close to the testing locations as possible. This allows for a shortened flight time for the helicopter.

It is estimated that workers and equipment will be at a bore hole location for anywhere between six to ten days. The length of time at a test pit location is estimated to be only one day. During the course of the testing there will be visible signs that testing is underway, however, once the testing is completed the area will be reclaimed. The only portion of the monitoring well that will be visible is the 1.5 meters of protective pipe that extends above the surface ground. Immediately after testing at a monitoring well is completed, the area will be reclaimed. The testing pits and boreholes will be reclaimed concurrently as well. The Baseline Activities are projected to begin on July 1, 2011 and end no later than November 15, 2011.

 The use of air lifted drill rig to access drill sites in areas without current road access will reduce visual disturbances. The monitoring well locations will be located at existing bore holes also reducing activities at each site and visual impacts to the area.  All disturbed areas will be revegetated as soon as possible following disturbance.  The Baseline Activities identified are short term activities proposed to largely be conducted during the summer months. After the Baseline Activities are completed the areas accessed will be reclaimed.

4.2 Land Use

The Mine Project area includes private and public lands within the Gunnison National Forest managed by the Gunnison Ranger District (Figure 4-1). Although there are no developed recreation facilities in the immediate vicinity of the Mine Project, snowmobiling, snowshoeing, cross country skiing, hiking, alpine skiing, biking, hunting, four-wheel driving, and recreational driving for scenic viewing and other recreation activities occur in the general area of the Mine Project.

21 Historic and current land uses for the Mine Project area include hunting, gathering, mineral exploration and extraction, logging, agriculture, residential development, timber sale, firewood gathering, grazing, and recreation. Management of the USFS land in the vicinity of the Mine Project is guided by a Resource Management Plan (RMP) developed by the USFS (USFS, 1983; 1991; and 1993). The RMP states that plans must be designed to minimize the impacts of operations on other uses and surface resources, and to provide for prompt reclamation or restoration of affected lands upon completion of operations. It also states that the plan must provide for reclamation of disturbed lands to achieve the planned uses specified in the , Uncompahgre and Gunnison (GMUG) Forest Plan 1983 and amended 1991. When those lands are no longer needed for mining operations, all reclamation and restoration shall adhere to the National Forest Management Act, which requires reclamation of all mining operations and compliance to air and water quality state and federal standards.

4.3 Cultural Resources

4.3.1. Measures to Protect Cultural Resources

The area in which the Baseline Activities are proposed to be conducted has been reviewed on the ground in varying degrees in previous years. Prior to selecting a specific site to conduct Baseline Activities, an experienced archeologist will review past site reviews and reports and, in addition, will survey the area and clear the area. An archaeologist will clear every area prior to the start of any Baseline Activities. Any cultural resources identified by the archaeologist will be inventoried and either moved to protect the resource in accordance with state and federal law, or the Baseline Activity will be moved to a new location. Any sites identified as containing a cultural resource will be inventoried and avoided. Any archaeologist engaged by USE will work in conjunction with the USFS’s archaeologist and the Colorado State Historical Preservation Office.

4.4 Climate

The Mine Project is situated in rugged mountainous terrain which results in great differences in climate over very short distances. Overall, the major climate parameters are indicative of an alpine environment. The area experiences very cold winters with frequent snowfalls and warm summer days occasionally punctuated by thunderstorms. Climatological data on temperature and precipitation has been collected by the National Weather Service for the nearby communities of Gunnison and Crested Butte, Colorado. Data from Cyprus AMAX Minerals Co. monitoring stations located at the Keystone and Alkali Creek sites also provide a representative profile of area climate (USFS, 1 982a).

22 The average monthly temperatures based on the Keystone and Alkali Creek sites range from a monthly average winter low of approximately 12 oF in December and January to a monthly average of approximately 53oF in July. Temperature extremes can vary from -20oF to +90oF.

Large gradients in precipitation are commonly observed in this mountainous region. Crested Butte, located on the windward side of the mountains, receives significantly higher precipitation than does Gunnison which is located on the leeward side of the mountains. The average precipitation expected at the site is approximately 2 inches per month with an average of 23 inches per year. This amount assumes that approximately 20 inches of snow equals 1 inch of precipitation. In general, snowfall accounts for all precipitation during the winter months.

Climatic data is available from the Western Regional Climate Center (WRCC) weather station at Crested Butte, CO (station # 051959). Based on a 97-year period of record (1909 through 2006), the average monthly air temperatures range from 11.9°F in January to 57.2°F in July. The average annual temperature is 34.7°F. The average annual rainfall is 23.5 inches, 68 percent of which falls during the months of October through May. Average annual snowfall totals 197.1 inches. Monthly climatic data from the weather station are provided in Table 4-1.

Wind speeds at the site are expected to be moderate. On site measurements for Alkali Creek and Keystone indicate average annual wind speeds over the Mine Project site in a range of 5.2 to 7.4 miles per hour.

4.5 Air Quality

Air quality monitoring in the Mine Project area was performed for the Mount Emmons EIS (USFS, 1982a). The dominant source of air emissions in the immediate region surrounding the Mine Project area comes from roads, chimneys and vehicles. Monitoring conducted in the Mine Project area indicated particulate matter, sulfur dioxide, carbon monoxide and hydrocarbons levels are all in compliance with applicable U.S. EPA and State of Colorado, CDPHE ambient air quality standards. Higher particulate levels from wood burning and road sanding were reported from towns in the area, which are situated in mountain valleys that occasionally have constrained air flows and/or temperature inversions. Air quality monitoring data for 2005 reported that PM10 in Crested Butte averaged 25.5 μg/m3, with a 24-hour maximum of 82 μg/m3. (CDPHE, 2006). Mount Crested Butte reported an average of 34.9 μg/m3 annually, with a 24-hour maximum of 172 μg/m3. (CDPHE, 2006). The 24-hour maximum for Mount Crested Butte exceeded the National Ambient Air Quality Standard (150 μg/m3). Air quality monitoring data for 2006 reported that

23 PM10 in Crested Butte averaged 27.1 μg/m3, with a 24-hour maximum of 100 μg/m3. (CDPHE, 2007). Mount Crested Butte reported an average of 29.1 μg/m3 annually, with a 24- hour maximum of 120 μg/m3. (CDPHE, 2007). The 24-hour maximum for Mount Crested Butte was below the National Ambient Air Quality Standard (150 μg/m3).

Two wilderness areas are located to the west and north of the Mine Project area. The is approximately 3 miles to the southwest of the Mine Project. The area is approximately 2 miles northwest of the existing water treatment plant (Figure 2-1). The West Elk Wilderness is classified as federal Class I area for federal and state air quality purposes, while the remainder of USFS land, including the Raggeds Wilderness is Class II. Currently there are no USFS Lands that are classified as non-attainment (USFS, 2007).

The effect of the Baseline Activities on air quality is anticipated to be at most minor. The Baseline Activities will be of a short duration. The Baseline Activities will occur over the course of only four months. The time spent at each testing location is also short in duration. It is estimated that the length of time at each bore hole site will be six to ten days, which includes the transport by air of equipment, setup, drilling, disassembly and fly out.

Air emissions associated with the limited Baseline Activities are not anticipated to be significant. The use of small scale internal combustion engines on drill rigs, vehicles and helicopters will minimize impacts on air quality. To further minimize impacts on air quality, all engines will be maintained as required by the manufacturer and operated only as needed to complete the Baseline Activities. Further, implementation of additional mitigation measures will occur to minimize any potential fugitive dust emissions, including limiting traffic on dirt roads to only necessary travel associated with the Baseline Activities.

4.5.1. Measures to Protect Air Quality

 Vehicle speed will be restricted on access roads to reduce fugitive dust from traffic.  Revegetation of all disturbance concurrently will reduce the potential for fugitive dust.  The use of air lifted drill rigs in areas will minimize potential fugitive dust.

24 4.6 Water

The Mine Project is located in the Gunnison River basin in northern Gunnison County. The area is characterized by relatively steep terrain with an elevation range about 5,400 feet. The highest point in the area is in the Ruby Range at 13,058 amsl, while the elevation of the Gunnison River at the city of Gunnison is 7,652 feet amsl.

4.6.1. Surface Water Hydrology

Mount Emmons is bounded by Coal Creek on the south, Oh-Be-Joyful Creek on the north, and the Slate River on the east (Figure 3-1). Major tributaries to Coal Creek include Elk Creek and Splains Gulch. Some of the flow in Coal Creek comes from a diversion out of Lake Irwin, which is at the headwaters of Ruby Anthracite Creek.

The Mine Project area includes numerous streams with flows ranging from intermittent trickles to annual discharges of 700 cubic feet per second (cfs). As with most streams throughout the central , snowmelt contributes to the bulk of total annual runoff. Most of the runoff occurs during May and June when the snowpack melts. Groundwater in the Mine Project area occurs under both water table and confined conditions. Many of the springs appear where the contact between relatively permeable unconsolidated material and underlying lower-permeability bedrock intersects the surface.

The Slate River is a tributary of the Gunnison River, which contributes flow to the Colorado River. The Slate River contributes almost 20% of the flow in the Gunnison River near Gunnison, Colorado.

There are three USGS stream flow gauges close to the Mine Project. Two of the gauges are in operation, one is no longer operational. One of the operational gauges is on the Slate River just below its confluence with Washington Gulch. The other operating gauge is on the East River east of Crested Butte. One stream flow gauge monitored the flow on Coal Creek west of Crested Butte, just downstream of its confluence with Elk Creek between 1941 and 1946. This gauge is no longer operational.

Water quality sampling and instantaneous discharge measurements have been conducted periodically at Coal Creek above the mouth at Crested Butte (USGS Station No. 385224106590100) since November 2000. The station is located approximately 0.5 miles upstream of Coal Creek’s confluence with the Slate River. Instantaneous discharge measurements recorded at this location during a period from November, 2000 to

25 June, 2007 ranged from as low as 0.22 cfs (recorded on 9/20/2006) to as high as 263 cfs (recorded on 5/23/2006) with an average of 24.4 cfs. This station is currently active. Water quality samples and flow measurements are generally completed between six and eight times per year, because this stream segment is impaired by zinc (Segment 12: Coal Creek and tributaries from the Crested Butte water supply intake to the Slate River) and is listed on Colorado’s Section 303(d) list.

4.6.1.1. Carbon Creek Area

The Mine Project’s three proposed tailings disposal facilities are located at the drainage divide between the headwaters of Ohio Creek and Carbon Creek junction of West and East Carbon Creek and upper East fork of Carbon Creek. Carbon Creek is a tributary to Ohio Creek which flows south from Ohio Pass and drains an alluvial valley. Carbon Creek drains the south face of Mount Axtell and flows into Ohio Creek. This creek, which is less than 12 feet wide in most places, flows through a broad valley used for pasturing livestock and producing hay. Average annual flow on Ohio Creek has been estimated as 48 cfs, with peak flows of 186 cfs in May and low flows of 9 cfs in February above the confluence with Carbon Creek and 89 cfs below the confluence (CDWR, 2007).

4.6.2. Surface Water Quality

Surface water quality in the area was described in the Mount Emmons EIS (1 982a). Where available, the 1982 data has been updated with monitoring data from USGS and Stantec (2005).

The water quality of streams in the Mount Emmons area is influenced by the seasons, the weather, the geology of individual watersheds, and human activities. When snow-melt and rainfall lead to increased streamflows, sediment and turbidity levels rise. This is a typical pattern for Rocky Mountain Streams.

The chemical aspects of water quality in both Coal and Oh-Be-Joyful Creeks are influenced by drainage from naturally mineralized areas of Mount Emmons. Both creeks are of reasonably good quality near their headwaters, but as their lower reaches enter the general zone of seepage (the confluence of Redwell Basin on Oh-Be-Joyful, and of Elk Creek on Coal Creek) they become more acidic and higher in metals, especially cadmium, copper, lead and zinc (Stantec 2005) by drainage from naturally mineralized soils.

26 The Keystone Mine was historically a major source of acid and high metals concentrations for years. Water from the Keystone Mine is treated in the water treatment plant and enters Coal Creek just below the Town of Crested Butte’s water intake. Cyprus-Amax completed remediation projects within the Coal Creek drainage to address non-point drainage from the historic mines. A water treatment facility has operated since May 1981 to treat acidic mine drainage from the Mount Emmons/Keystone mine. The water treatment facility utilizes pH adjustment, dissolved air flotation, and sand filtration to remove dissolved and total metals before discharge to Coal Creek. In addition to the Standard and Mount Emmons/Keystone mines, materials from other historic mining activity exist in Coal Creek and its tributary drainages that have the potential to impact water quality. The proposed activities will not impact surface or underground waters. The segments of Elk Creek and Coal Creek in the Mine Project area are classified by CDPHE for Aquatic Life Cold 1, with beneficial uses of Recreational 1A, and Agricultural uses. All segments are classified for water supply, except the segment of Coal Creek from the Crested Butte water supply intake to the Slate River. Elk Creek and all of Coal Creek below Elk Creek and the Slate River below the confluence with Coal Creek are on the Colorado 303(d) list (Impaired). Coal Creek below the Crested Butte water supply intake and the Slate River are listed for zinc. Elk Creek and Coal Creek to the Crested Butte water supply intake are listed for zinc, lead and cadmium. Oh-Be-Joyful Creek upgradient of the confluence with the Slate River is listed for zinc and cadmium. The Slate River segment was delisted in 2002 for iron and manganese. Sources of contaminants include roads, historic mine waste, and natural mineralization.

4.6.2.1. Carbon Creek Area

Coal mining has occurred in the upper portions of this drainage. A water quality station located approximately 0.25 mile upstream from the Ohio Creek confluence shows good water quality. Aluminum and iron concentrations are low. The higher concentrations of these two metals in Ohio Creek are likely due to correspondingly higher suspended solids concentrations.

4.6.3. Groundwater Hydrogeology

4.6.3.1. Mount Emmons Area

Mount Emmons groundwater occurs principally in two systems: one is a surficial aquifer, while the other is a bedrock aquifer. The surficial aquifer consists of the more permeable portions of moraines, landslide and avalanche debris, talus, colluvium, and the outermost fractured and weathered bedrock zone. The distribution of these deposits on Mount Emmons was mapped by Cochran and Robinson (1979 and 1980). Tests

27 conducted on the morainal material indicate a permeability of about 0.1 gallon per day per square foot (gpd/ft2) (Woodward-Clyde, 1980b). The presence of numerous springs in the morainal material suggests that more pervious zones probably exist. The bedrock system’s groundwater flows are influenced by steeply-dipping, crosscutting fractures. Some fractures are recharged at the surface or by the surficial aquifer, while others are recharged entirely by seepage from the surrounding bedrock. The rock above the deposit is fractured and has an estimated permeability of 0.2 gpd/ft2 (Snow, 1980). The permeability of the north south trending Keystone and Union veins has been estimated to be 1.2 gpd/ft2.

The permeability of the rock outside the major fracture zones has been estimated to be 0.02 to 0.002 gpd/ft2 (Snow 1980). No permeability testing has been conducted on deep bedrock in Mount Emmons.

Static water levels have been measured in shallow wells located at low elevations on Mount Emmons (Woodward-Clyde, 1980b). These wells range in depth from 4.5 to 250 feet. It appears that a shallow water table 20 to 50 feet deep roughly parallels the land surface lower on the mountain. Higher up, water levels were found to be as much as 1,000 feet below ground surface. The bedrock aquifer is less permeable than the surficial aquifer by a ten-fold difference. As a result, groundwater flow is along the top of the bedrock and returns to the surface as springs.

The original 10000-level adit of the old Keystone Mine workings extends into the Mesaverde Formation (interbedded sandstones, siltstone, shales, and some coal beds). According to Woodward-Clyde (1978), the formation is not known to be an aquifer in the Mount Emmons area, but relatively small volumes of water migrate through fractures in the formation associated with the Keystone and Union Faults. Flow from the fractures enters the mine. Flow through the old Keystone Mine workings is the greatest from July to September, which is the same time that nearby surficial wells show an increase in water level of between 5 to 30 feet (Woodward-Clyde, 1980b). By late-summer, when the snowmelt season is over, groundwater discharge to the old workings decreases appreciably. Relatively large transient flows may result when fractures are first encountered during mining or drilling, but will eventually decline to a much lower flow consistent with the low permeability of the rock. Low flows have been estimated at 175 gallons per minute (gpm), with peak flows adding 150 gpm (Woodward-Clyde, 1978). Woodward-Clyde estimated the water level in the formation in the area of the 10000-level adit to be approximately 1,000 ft higher than the elevation of the adit. The specific yield (the ratio of the volume of drainable water to the volume of the porous rock per unit volume of rock) was estimated to be 0.01(1%).

28 Prior to AMAX’s drilling and drifting program in the mine for exploration purposes, the average discharge from the mine was approximately 175 gpm (Woodward-Clyde, 1 980b). Since 1978, new exploration holes and drifts have intercepted additional water-bearing fractures. The rate of discharge from the Keystone Mine during late May and early June 1979 was over 400 gpm. The quality of groundwater in Mount Emmons varies considerably.

The workings of the old Keystone Mine appear to have lowered the water level in many of Mount Emmons’ fractures. This has exposed previously unoxidized pyrite to air, and oxidation has taken place. Water from snowmelt and rainfall intermittently comes in contact with this pyrite and turns iron-rich and acidic. Metals such as zinc and manganese in other sulfide minerals are subsequently dissolved and poor quality groundwater results. This water has been draining out of Mount Emmons for many years from the Keystone Mine portal, from springs in Redwell Basin, and from springs that feed into several Iron Fens, including the Mount Emmons Iron Fen.

Results of a statistical analyses from water quality samples collected from local springs, surface water, mine drainage, and drillholes, in conjunction with hydrogeological mapping (fault-vein and debris slide mapping), indicate that most of the springs on Mount Emmons do not reflect a hydraulic connection with internal mineralized zones (Williams, 1980). Most of the springs are derived from debris slides that have relatively shallow flow paths.

4.6.3.2. Carbon Creek Area

Large deposits of glacial and mass movement debris overlie the area’s bedrock. Water seeps through those deposits and enters underlying sedimentary aquifers (Williams 1 980b). This is particularly true of the talus and rock glacier deposits that mantle the north and east sides of Carbon Peak. These are expected to have high permeabilities. Groundwater moves down valley in the surface deposits. In the bedrock aquifers, groundwater movement directions are not known because of structural complications introduced by the Carbon Peak intrusive and by local faulting.

29 4.6.4. Methods to Minimize Impacts to Water Quality

 BMPs will be established to comply with any permit required by the CDPHE. BMPs will include silt fence, straw bales, wattles, water bars and revegetation. The best BMP is to reduce or not utilize additives in drilling activities and allow for the settling of the drilling water to remove cuttings which allow for the reuse of drill water. Settling of solids will occur through the use of portable holding tanks.  Water quality will be checked in the field for pH and conductivity. All monitoring and measurement of water quality levels will be conducted in accordance with all applicable CDPHE permit requirements.  The use of an air lifted drill rig to access drill sites will minimize the site disturbance and the potential for sediment to reach waters of the US. Minimum use of a track drill rig in selected areas on established roads reduces the potential for sediment to reach waters.  The monitoring well locations have been chosen at the location of bore holes so as to reduce soil disturbance. As discussed above, a SWMP will be prepared and submitted to the CDPHE. Any permit required by the CDPHE will be obtained from the CDPHE prior to beginning the Baseline Activities. The SWMP will include BMPs for erosion and sediment control, material handling and spill prevention which will include the use of wattles, silt fence, and straw bales to prevent soil erosion and/or transportation of soils.  Any water produced during well construction will be directed to portable settling tank(s) to provide settling of solids, the decant of which will then be allowed to infiltrate into the surrounding soil. No water produced will be discharged to the surface water; therefore there is no expected impact to any surface waters.  Water resulting from the drilling process will be allowed to infiltrate the surface. Infiltration is the slow movement of water through the surface soils similar to a very light rain. The water will not be allowed to run over the soil for any extended distance, but at a significantly reduced velocity it will move into the soil over time. Silt fences and/or small basins dug into the soil within the disturbance area will be constructed to impound flow and aid the natural infiltration process.

4.7 Soils

The surface soils in and around the Mount Emmons area have been studied and mapped in detail to facilitate previous mining activities. The following discussion of soils within the baseline study areas proposed for this initial PoO is taken from the Web Soil Survey for the Grand Mesa - West Elk Area, Colorado, Parts of Delta, Garfield, Gunnison, Mesa, and Montrose Counties Soil survey (USDA, 2008).

The dominant soils on the southern face of Mount Emmons, Coal Creek, and upper Ohio Creek are in the Needle and Scout families. These soils are alfisols and enceptisols, derived from colluvium, slope alluvium and residuum on mountain slopes. The soils are well drained to excessively drained with moderate to rapid permeability. Both soils are formed under forested stands dominated by Douglas-fir, subalpine fir, Engelmann spruce and aspen. The textures are generally skeletal loamy with rock fragments ranging from 35% to 75% and clay content ranging from 8% to 32%.

30 Soils on upper Carbon Creek area are in the Wetopa-Wesdy and Wesdy-Mudbuz complexes. These soils are typical of mountain slopes and are formed in colluvium and residuum. The Wesdy and Mudbuz soils are well drained and moderately deep. They are described as clayey-skeletal. With rock fragments ranging up to 55 and clay content ranging from about 20% to 55%. The Wetopa soils from in residuum and are described as clay loams. They have few rock fragments and clay contents ranging from 30% to 55%. The Wetopa and Wesdy soils are mollisols which support aspen woodlands with a variety of grasses and forbs. The Mudbuz series is an alfisol which supports Engelmann spruce – subalpine fir woodlands.

4.7.1. Methods to Minimize Impacts to Soils

 BMPs will be established to comply with any applicable requirements under a CDPHE permit. BMPs will include silt fence, straw bales, wattles, water bars and revegetation. The operators will utilize existing vegetation and these BMP’s to reduce water velocity across soils so as to protect surface soil from erosion.  The use of an air lifted drill rig to access drill sites will minimize the site disturbance and the potential for soil erosion. Track mounted drill rig utilizing existing established roads will reduce the potential for soil erosion. • The monitoring well locations have been chosen at the location of bore holes so as to reduce soil disturbance.

4.8 Vegetation

AMAX and other previous owners completed vegetation surveys in and around the Mount Emmons area to establish background conditions. The following description of vegetation types in the Mine Project area is taken from the Mount Emmons Mining Project Draft EIS (USFS 1982) describing a 140,524 acre study area.

Vegetation types in the Mine Project area consist of forests, shrublands, and grasslands, occurring in four major elevational zones (Langenheim, 1962). The zones are not distinct and tend to overlap and intergrade, especially in local areas where slope and aspect alter general elevation trends. The alpine tundra zone, at elevations above 11,500 feet amsl, includes fellfields and tundra meadows. The subalpine zone, at elevations between 9,500 and 11,500 feet amsl, includes subalpine meadows, subalpine willow thickets, spruce-fir forests, wet sedge meadows, and sphagnum-sedge Fens. The upper montane zone, at elevations between 8,500 and 9,500 feet amsl, includes Douglas-fir forests, lodgepole pine forests, aspen woodlands, riparian willow thickets, moist meadows, and mountain grasslands. The lower montane zone, at elevations between 7,700 and 8,500 feet amsl, includes sagebrush shrublands, cottonwood woodlands, ponderosa pine forests, juniper woodlands, and hay meadows-pastures (AMAX, 1981 a). The concept of vegetation zones only applies in a

31 general way. For example, sage brush shrublands in the Mine Project Area can occur at elevations as high as 12,000 feet amsl (Langenheim, 1962).

Vegetation in Red Lady Basin, Keystone Mine and Coal Creek areas is characteristically upper montane, sub-alpine and alpine. The lower elevations are characterized by a mosaic of aspen woodlands, subalpine meadows, and spruce-fir forests. Extensive stands of lodgepole pine occur in Coon Basin northeast of Red Lady Basin. At higher elevations the woodland-meadow mosaic gives way to expanses of sparsely-vegetated rocky areas. Alpine meadows and fellfields occur above the tree line on Mount Emmons. Vegetation at the Slate River mine site, in addition to the above vegetation types, includes moist meadow and riparian willow thickets.

Vegetation in the Carbon Creek area consists of Engelmann spruce sub-alpine fir forest types along the east and north sides of Carbon Peak. Stands of lodgepole pine and numerous rock outcrops and talus slopes are intermixed in this area. The west and south aspects are dominated by aspen woodlands, mountain grasslands, and sub-alpine meadows. The bottom lands along Carbon Creek are primarily riparian willow thicket with talus slopes reaching to the creek in some areas. Beaver activity along Carbon Creek has created moist meadows and promoted the growth of willows while controlling the encroachment of aspen into the creek bottoms (AMAX, 1981 a).

More recently collected data from the Southwest ReGap (Lowry, et al., 2005, USGS, 2004) was accessed to describe the vegetation types in a 2,200 acre area immediately surrounding the Mine Project. These vegetation types are modeled spatial data derived from Landsat ETM imagery, DEM derivatives and on-the-ground field data. Forested land accounts for over 70% of the cover, with the greatest amount in either evergreen (39%) or aspen (31%) forests.

4.8.1. Sensitive Areas

Sensitive areas are those which are highly susceptible to external disturbing influences. They have a low regeneration potential and high scientific value. Alpine and subalpine herbaceous shrub types occupy approximately 442 acres or about 15% of the area on or immediately surrounding the Mine Project. Further estimates from baseline studies will confirm the acreage for this vegetation type which is often considered sensitive due to the long time periods required for reestablishment.

32 A unique round-leaved sundew population exists in the Iron Fen on the south slope of Mount Emmons (CNHP, 2008). The plant, Drosera rotundifolia L., is a small carnivorous organism found in peaty or wet, acid soil across the northern border of the United States and along both coasts. According to Britton and Brown (1970), it occurs "in Fens or wet sand from Newfoundland to Alaska, south to Florida and Alabama, in the Rocky Mountains to Montana and Idaho, and in the Sierra Nevada to California. It ascends to 2,500 feet in the Catskills.‖ It is also found in Europe and Asia. This population of 500 to 1,000 round-leaved sundew plants is of interest because it is the only known occurrence in the Central or Southern Rocky Mountains despite of extensive searches for it in similar Fens. No other species of the Sundew Family (Droseraceae) have been found in Colorado. There is general agreement that this population is unique and sensitive (USFS, 1 982b).

On December 9, 1980 the Colorado Natural Areas Council voted to register the Mount Emmons Iron Fen in the Colorado Natural Areas Program (CNAP). A vote to register an area in the program is taken only with the landowner's permission, but it involves no legal responsibility on the part of the State or the landowner. The Director of CNAP strongly encouraged the USFS to design and include management plans which would ensure that the Iron Fen and natural springs which feed it will remain in an undisturbed condition (CNAP, 1981). One method suggested to accomplish this was to create a Special Interest Area that includes the Iron Fen. The current RMP (USFS, 1991) lists the Iron Fen and a buffer area encompassing 170 acres as a Special Interest Area.

4.8.2. Threatened and Endangered and USFS Sensitive Species

No federally listed, threatened, endangered, proposed, or candidate plant species occur in Gunnison County. According to the Colorado Natural Heritage Program (CNHP), there are currently 17 plant species known to occur on the Gunnison District that are on the USFS Sensitive Species List. A search of the CNHP-managed BIOTICS database (Colorado Natural Heritage Program, 2008) of the four USGS quadrangles that contain the areas of potential disturbance (Crested Butte, Gothic, Mount Axtell and Oh-Be- Joyful) found habitat or occurrence records for one of these species—roundleaf sundew. The locations are not shown, at the request of CNHP.

33 Although not identified in the CNHP report, several other USFS sensitive species have been reported in similar habitats in Gunnison County. One species has been reported in the Iron Fen: sphagnum moss (Sphagnum angustifolium). Slender cottongrass (Eriophorum gracile) is known to occur in the West Elk Wilderness and occurs in subalpine fens and wet meadows similar to the Iron Fen. Colorado tansyaster (Machaeranthera coloradoensis) is known to occur in several sites in Gunnison County at elevations similar to the Mine Project under Engelmann spruce forest. Table 4-4 lists the USFS sensitive species that may occur in the Mine Project area.

4.8.3. Methods to Minimize Impacts to Plants

 Air lifting a drill rig to drill sites will significantly minimize the amount of vegetation that will be necessary to remove. Further, utilizing a track mounted drill rig on existing roads will minimize the amount of vegetation to be removed.  The monitoring well locations have been chosen at bore hole locations so as to reduce vegetation disturbance. All disturbed areas where vegetation was removed will be revegetated at the end of borehole or test pit excavation. USE will coordinate with USFS on the identification of the appropriate seed mix.  Prior to construction activities all borehole and test pit locations will be field checked for the presence of any special status plant species. Study sites can be adjusted as necessary, if any special status species are identified.  All equipment will be pressure washed prior to accessing the study area to remove soil, seeds or plant propagules and prevent the introduction of non-native and/or noxious weeds.  Any soil samples proposed to be taken in suspected fens will not be done without the presence of the USFS Botanist. Further, no fen or wetland work will be conducted in the Mount Emmons Iron Bog Special Area without the presence of a USFS Botanist.

4.9 Wildlife

AMAX and other previous owners have completed wildlife surveys in and around the Mount Emmons area to establish background conditions. The following description of wildlife habitats and occurrence is taken from the Mount Emmons Mining Project Draft EIS (USFS, 1982a).

Wildlife habitats in the Mine Project area are typical of Gunnison County and southwestern Colorado above 7,500 feet. Throughout this region, large expanses of shrublands, montane forests, and alpine/subalpine habitats are relatively unmodified, whereas the major valley bottoms are used for native hay production and cattle pasturing. Pasture areas form agricultural wildlife habitat. Cattle also graze on the shrublands, meadows, and grasslands throughout the region.

34 The common big game species in the region are elk, mule deer, bighorn sheep, and black bear. Mountain lions are seen infrequently. Game birds in the area include sage grouse, blue grouse, white-tailed ptarmigan and waterfowl. Songbird diversity is greatest from late spring through early fall. During winter, most non-game birds migrate south. Elk and mule deer move to winter ranges on southern exposures at elevations below about 9,000 feet amsl.

Wildlife species on Mount Emmons are typical of those occupying similar habitat throughout the region. White-tailed ptarmigan occur in Red Lady Basin and blue grouse occur in most of the habitats on Mount Emmons. The area is a habitat for mule deer (Odocoileus hemionus) and to a lesser extent elk (Cervus canadensis).

Carbon Creek consists of montane forest habitat. Wildlife populations and species diversity in Carbon Creek are similar to those found in the mine site areas, and are typical of similar habitats in the region. This area contains willow thickets, wetlands, and active beaver colonies. The site supports transient populations of waterfowl. Blue grouse are also present. Mule deer and elk use the area as summer range, while the principal elk calving areas are further south. The Carbon Creek/ Ohio Creek headwaters are in an Elk Summer Concentration Area. These are areas where elk concentrate from mid-June through mid-August. High quality forage, security, and lack of disturbance are characteristics of these areas to meet the high energy demands of lactation, calf rearing, antler growth, and general preparation for the rigors of fall and winter (CDOW 2008). There are approximately 233,000 acres of Elk Concentration Areas in Gunnison County. Of that area, approximately 6,000 acres are in a wildlife study area defined for the Mine Project’s baseline studies.

4.9.1. Threatened and Endangered and USFS Sensitive Species

The Mount Emmons EIS (USFS, 1982b) listed two species as federally listed—the Bald eagle and the Greater sandhill crane. The Bald eagle was recently delisted and the Greater sandhill crane is no longer listed as occurring in Gunnison County.

Currently, two federally-listed animal species, Southwestern willow flycatcher (Empidonaz traillii extimus) and lynx (Lynx canadensis), occur in Gunnison County according to data from the CNHP. At the federal level, the flycatcher is listed as endangered while the lynx is listed as threatened; both are listed by Colorado as endangered. An additional 11 animal species listed by the USFS as sensitive species, of which eight are listed by the State as either endangered, threatened or of special concern (Table 4-4) occur

35 in Gunnison County. A search of the CNHP-managed BIOTICS database (Colorado Natural Heritage Program, 2008) of the four USGS quadrangles that contain the areas of potential disturbance (Crested Butte, Gothic, Mount Axtell and Oh-Be-Joyful), found no occurrence data for the lynx or Southwestern willow flycatcher species. Of the 11 sensitive species occurring in Gunnison County, CNHP reported historical sitings for the boreal toad, wolverine, and the Townsend’s Big-eared bat. Table 4-4 lists the USFS sensitive species that have been recorded in the area.

4.9.2. Methods to Minimize Impacts to Wildlife

Prior to the commencement of any Baseline Activities an experienced wildlife biologist will be retained to survey and clear the area, insuring that no sensitive habitats are located where the Baseline Activities are proposed to occur. None of the Baseline Activities will result in an impact upon any fisheries.

 The use of an air lifted drill rig to access drill sites will minimize disturbance to wildlife. Use of track mounted drill rig on existing roads reduces the time in the area where the Baseline Activities will be conducted and disturbance to wildlife. The shorter time in the area will reduce disturbance to wildlife. Operators will only work during daylight hours. Total area of activity is limited to 1.6 acres.  The monitoring well locations have been chosen to be at borehole locations thus reducing the total time at each bore hole site.  All disturbed areas where vegetation is removed will be revegetated at the conclusion of borehole or test pit excavation. USE will seek USFS approval of the seed mix that will be implemented to reestablish the current habitat. Controlling surface water flow from the testing site through a use of BMP erosion control devices will protect the surface water streams.  All activities will be restricted to daylight hours to minimize any potential effects on nocturnal species.

4.10 Noise

Noise levels in the Mine Project area were documented in the Draft Environmental Impact Statement by SAI during 1980 (SAI, 1 980a and 1 980b). Monitoring data collected by SAI indicate noise levels in Alkali and Carbon creeks and Chance Gulch are below those expected in a rural setting (less than 45 decibels [dBs]). Noise levels along Ohio Creek Road, Crested Butte, Gunnison, and Coal Creek Road range from approximately 45 to 58 dB, similar to that expected in a small town. The Keystone Mine area and U.S. Highway 50 east of Gunnison have noise levels above 60 dB, typical of an urban setting. Although data exists for nearby areas, site specific information is needed.

36 5.0 ACCESS ROUTES

Once the initial Baseline Activities have been completed, monitoring of the wells and water sample collection will continue year-round. Figure 3-2 shows the proposed access routes for the proposed hydrologic monitoring activities. In general, access will be by Highway 135, County Road 12, the Ohio Pass Road (CR 730), the Carbon Creek Road (CR 737), the Splains Gulch Road (CO885) and Slate River County Road 734. Table 5-1 provides a summary of access criteria for the hydrologic monitoring locations observed during Golder’s site reconnaissance survey completed in July 2008.

Access to the general area of each monitoring location will use motorized vehicles along existing USFS roads. Access to the actual monitoring location from an existing road will be by foot. During winter, access will be by snowmobile on roads and trails approved for snowmobile access. Access off of approved trails will be by ski or snowshoe.

Air support central staging area for the drilling contractor’s equipment and materials will be established near the existing Keystone water treatment plant which will also serve as the staging area for helicopter air lifts and private Ranch land in upper Carbon Creek area. The establishment of two central staging areas for drilling equipment and materials will be coordinated with the drilling contractor, USFS personnel, and the air-lift contractor. The flight routes will be direct from the nearest staging area, to the site in which the drilling or test pit would be accomplished. The periods of operation would be during the daylight periods, seven days per week.

The geotechnical study drill holes and test pits for the proposed tailings facilities (Figure 5-1) will be accessed via air lift from nearest staging area. The geotechnical study drill holes and test pits for the proposed Carbon Creek reservoir will be accessed via air lift from nearest staging area.

6.0 RECLAMATION

If any new clearing of vegetation occurs the following procedures will prevail:

6.1 Slash Clearing

U.S. Energy Corp. will use open areas as much as possible in order to minimize the disturbance to mature trees. Any slash will be isolated, piled, and left in place for establishment of microenvironments for rodents and small mammals.

37 6.2 Drill and Test Pit Pads

Drill pads will not require recontouring as no soil will be moved. The air lifted drill rig will drill on the surface of the existing ground. Test pit pads will remove top soil and stockpile in a manner so as to allow for recovery of top soil. After test pit is backfilled the removed top soil will be spread over the disturbed area.

Revegetation will use a seed mix with the target species composition presented in Section 6.4. The surfaces will be broadcast seeded, planted and mulched using the techniques described in Section 6.4.

6.3 Drill Hole Abandonment

All drill holes are expected to remain as monitoring wells for monitoring during the Baseline Activities, active mine life and post-closure monitoring period. When no longer needed the drill holes and monitor wells will be abandoned during reclamation using the methods specified by Rule 16 of 2 CCR 402-2, Rules and Regulation for Water Well Construction, Pump Installation, Cistern Installation, and Monitoring and Observation Hole/Well Construction. Prior to capping, all holes will be filled to the static water level with drill cuttings, clean sand or clean gravel, then with clean native clays, cement or high solid bentonite grout to the ground surface. The surface casing will be cut off below ground level and the uppermost 5 feet of casing will be filled with grout or a permanent watertight cover will be installed at the top of the casing.

Surface drill holes located on federal land will be reclaimed according to procedures in the BLM Solid Minerals Reclamation Handbook.

6.4 Revegetation

6.4.1. Topsoil Application

Topsoil will be respread on all reclaimed areas to provide growth medium for revegetation. For the proposed drilling operations, no top soil will be moved. Test pit operations will require removal then spreading of top soil after a test pit is backfilled.

38 6.4.2. Species Selection

The selection of appropriate grass and forb species for revegetation and appropriate sources of plant materials is a critical process which controls the function of the overall revegetation program. All species included in the proposed seed mixtures will be adapted to the area. Species selection is based on proposed land use, climate, and soil conditions. Species selection will be reviewed by the USFS prior to final revegetation. The vegetation mix, including trees, shrubs, forbs and graminoids will conform substantially to USFS guidelines. To the extent possible, native species will be utilized. Specific seed sources will be selected to ensure that the plants are adapted to the elevation, precipitation, temperature, and soil conditions present at the sites.

The species mixture chosen for revegetation will provide a stable environment that will be capable of supporting pre-mining land uses. All species selected for revegetation at the site will be adapted to low fertility environments. Species that are adapted to low nutrient conditions are better suited to compete with aggressive weedy species during the critical plant establishment period. The utilization of adapted species will ultimately result in a plant community composed of species that can survive lower nutrient conditions, yet out-compete aggressive weedy invaders that require higher nutrient conditions. Seeds are available from suppliers in Colorado and seedlings from suppliers in the Rocky Mountains who specialize in reclamation. Seeds will be obtained from established seed supply companies which produce seed adapted to the conditions (elevation range of 9,300 to 10,600 ft MSL and average annual precipitation of 23 inches) at the site.

A revegetation species list, along with species-specific planting or seed application rates, will be developed with consultation with the USFS and other appropriate agencies. Trees and shrubs will be planted where feasible. A preliminary list of potential reclamation species is presented in Table 6-1. Note that the seed mix will include a few species from this list.

Species will be recommended because they are native to the Crested Butte area and will ultimately become the dominant herbaceous species on the revegetated areas. However, species adapted to high elevations may be slow to colonize and therefore, may not be appropriate for use alone in revegetation seed mixtures where erosion control is the overriding concern in the first year or two of growth. Therefore, some non-native species may be included. Annual cereals, such as cereal rye may be used to provide temporary erosion control.

39 6.4.3. Seeding and Planting

If possible, all seeding and planting activities will be conducted after drilling and test pit operations or no later than the fall. Seeding is most effective when completed prior to the period of peak precipitation. If fall seeding is unsuccessful, areas will be re-seeded in the spring.

Seed will be broadcast by hand broadcasting. The seedbed will be raked following seeding to ensure proper seed burial. Broadcast seeding techniques will be used on all disturbed areas to create a more natural- appearing plant community. Broadcast seeding disperses seed over the soil surface in a random pattern. This provides a more natural appealing plant community than drill seeding, which plants seeds in straight lines at fixed intervals.

6.5 Noxious Weed Control

All equipment will be pressure washed to remove soil, seed and plant propagules of non-native species and/or noxious weeds before entering the sites. Disturbed areas will be revegetated as soon as possible after disturbance activities to reduce the potential for invasive species to establish. Straw bales and mulch will be Certified Noxious Weed Free under the Colorado Department of Agriculture Weed Free Forage Program. If approved by the USFS, the seed mix will include a sterile annual species, such as Regreeen or Triticale to provide competition with invasive species.

7.0 REFERENCES

AMAX. 1981a. Mount Emmons Environmental Report. Three volumes. AMAX Inc. 407 pp + 217 maps.

Baker, S. 1980. Baseline Cultural Resource Surveys and Evaluations in Primary Impact Areas of the Mount Emmons Project: 1978 and 1979 Field Seasons. MS, Heritage Resource Study Series of the Mount Emmons Project of Amax Inc., Gunnison County, Colorado. Vol. 1. Centuries Research, Inc., Montrose, Colorado.

Baker, S. 2008. Initial Implementing Heritage Resources Study Plan for the Lucky Jack Molybdenum Project. MS, Prepared in support of USFS Special Use (Cultural Resource) Permit #PAW90012 (expires 11/30/2010). Lucky Jack Project, Heritage Resources Program, Report No. 1, Centuries Research Inc., Montrose, Colorado.

Baker, S. 2008. Personal communication between Steve Baker (Archaeologist) and Dr. Susan Collins (State of Colorado Archaeologist) regarding: old cultural resource survey, June.

40 BGC. 2008. Lucky Jack Project, Preliminary Geohazard Assessment – DRAFT. Prepared for Kobex Resources Limited. Project Number 0524-001. Issued February 22, 2008.

Britton, N. L. and H.A. Brown. 1970. An Illustrated Flora of the Northern United States and Canada. In 3 vols. Dover Publications, New York, New York.

Cochran, D.M. and C.S. Robinson. 1979. Engineering and Environmental Geology of the Crested Butte Area. Charles S. Robinson and Associates Inc. 28 pp.

Cochran, D.M. and C.S. Robinson. 1980. Engineering Geology of the Mt. Emmons Mine Site. Charles S. Robinson and Associates Inc. 19 pp.

Colorado Department of Public Health and Environment (CDPHE), Air Pollution Control Division. 2006. ―Colorado Air Quality Data Report, 2005,‖ September 2006.

Colorado Department of Public Health and Environment (CDPHE), Air Pollution Control Division. 2007. ―Colorado Air Quality Data Report, 2006,‖ August 2007.

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http://ndis.nrel.colostate.edu/ftp/ftp response.asp

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Colorado Natural Heritage Program (CNHP). 2008. Biodiversity Tracking and Conservation System. Colorado State University, Ft. Collins, Colorado. Data exported February, 2008.

Golder Associates, Inc. (Golder). 2007. Water Availability Analyses for Proposed Lucky Jack Project, Crested Butte, Colorado. Redmond, Washington, October 2007.

Golder Associates, Inc. (Golder). 2008. Baseline Study Plan-Lucky Jack Molybdenum Project, Colorado, USA. Prepared for U.S. Energy Corporation, Gunnison, Colorado by Golder Associates Inc., Lakewood, Colorado.

Homer C, Dewitz J, Fry J, Coan M, Hossain N, Larson C, Herold N, McKerrow A, Van Driel, JN, Wickham J. 2007. Completion of the 2001 National Land Cover Database for the conterminous United States. Photogrammetric Engineering and Remote Sensing 73 :337-341.

Hunt, L. 2008. Cultural Resource Guidelines for Lucky Jack Project, GMUG National Forest, June, 2008. MS, United States Forest Service, Forest Supervisor’s Office, Grand Mesa, Uncompahgre, and Gunnison National Forests. MS, Delta, Colorado.

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Langenheim, J. H. 1962. Vegetation and Environmental Patterns in the Crested Butte Area, Gunnison County, Colorado. Ecol. Manager. 32(3): 249-285.

41 Lowry, J. H, Jr., R. D. Ramsey, K. Boykin, D. Bradford, P. Comer, S. Falzarano, W. Kepner, J. Kirby, L. Langs, J. Prior-Magee, G. Manis, L. O’Brien, T. Sajwaj, K. A. Thomas, W. Rieth, S. Schrader, D. Schrupp, K. Schulz, B. Thompson, C. Velasquez, C. Wallace, E. Waller and B. Wolk. 2005. Southwest Regional Gap Analysis Project: Final Report on Land Cover Mapping Methods, RS/GIS Laboratory, Utah State University, Logan, Utah.

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SAI. 1980a. Environmental Baseline Study of the Ambient Noise Levels for the Mount Emmons Project Area: Executive Summary. Prepared by Science Application Inc. for AMAX Inc. 26 pp.

SAI. 1980b. Environmental Baseline Study of the Ambient Noise Levels for the Mount Emmons Project Area: Final Report. Prepared by Science Application Inc. for AMAX Inc. 58 pp.

Snow, D.T. 1981. Mitigation of Mount Emmons Mine Drainage. GEORESULTS, Inc. 99 pp. Stantec Consulting Ltd. 2005. ―Coal Creek Watershed Protection Plan,‖ May 9, 2005.

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Walsh, J.P. 1980. ―Baseline Study: Environmental Geology – Mount Emmons Project.‖ James P. Walsh and Associates Inc.

Williams, R.E. 1980. A Statistical Analysis of Water Quality Data to Identify Hydraulic Connections Between the Surface of Mount Emmons, Colorado and Internal Mineralized Sources. Prepared for AMAX Inc., Mount Emmons Project, Crested Butte, Colorado, 1980.

Williams, R.E. 1 980a. An Analysis of Hydraulic Connections Between the Surface of Mt. Emmons and an Internal Pyrite-Rich Source. Prepared for AMAX Inc. 39 pp + maps.

42 Williams, R.E. 1980b. Letter to Ralph Crosser on the Carbon Creek mill site. June 2, 1980.

Woodward-Clyde Consultants. 1978. Estimated Discharge from 2,000 Level of the Keystone Mine, Mt. Emmons, Colorado. Prepared for AMAX Corporation, Crested Butte, Colorado, October 23, 1978.

Woodward-Clyde. 1980b. Mine Area Hydrology for Environmental Report – Mt. Emmons Project. Woodward-Clyde Consultants. 83 pp + maps.

43