CEO Blog - June 7, 2012
Thursday, June 07 2012 19:45
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Questions: Are there any new developments regarding the BLM Notice that you can share with us?

Answer: Yes, thank you for your question.  There are a number of items to report regarding the BLM Notice. On Monday, May 21st, we received a Notice from the local Field Office of the Bureau of Land Management (BLM) requiring us to cease using certain land. The Notice did not include any specific allegations regarding our conduct, and we strongly affirmed that the “generic” allegations in the Notice are not supported by the facts. We quickly responded with a letter outlining our position accompanied by over one hundred pages of evidence supporting those positions.

Subsequently, Cindi Byrns and I met with Leon Thomas, Field Manager of the local BLM Office and we affirmed our mutual understanding that these actions would not stop mining operations.  He restated his position from the Notice and indicated that a specific list of alleged infractions would be forthcoming, including exactly how we could immediately cure those allegations.  We received that letter today, and have already taken all necessary actions to cure the allegations by:

1)  Removing certain signage and obstructions from LOT 51 (despite still contending it is our own private land)

2)  Removing certain signage and obstructions from other designated public lands (despite still contending the validity of the existing right-of-way);

3)  Posting a reclamation bond for $35,868, while awaiting final resolutions; and

4)  Initiating a field work authorization for a cultural review.

We understand from the BLM that these actions cure the Notice.

We also confirmed, with Storey County, the validity and availability of alternative routes affirming that our mining activity WILL NOT be interrupted during the period of time required to develop a more reasonable solution.

The Company will also file a new, exclusive use Right of Way (ROW) application for the haul road portion of the ROW. In addition to cooperating with the BLM Local Field Office and submitting the requested paperwork, we are proceeding with a number of additional actions supported by the preponderance of evidence proving our position, including the immediate filing of a Class 1 Color of Title application for Lot 51 and filing an assignment application for the existing Haul Road ROW.

During these parallel actions, we remain compliant with all BLM regulations and we continue to mine using a combination of our own 50-ton haul trucks and 18-wheel, 20-ton semi-trucks.

We are also working expeditiously and cooperatively with the BLM for an enhanced, long-term solution that resolves disputed land-ownership claims and right of way issues in a manner that optimizes our logistics and mining operations and minimizes costs and disruptions.

Overall, we are pleased with the direct collaboration and recent responsiveness of the BLM and to have cured the Notice so quickly. While we are disappointed at some of their inflexibility in light of the facts, we are also encouraged by the ability to continue all our mining activity, and look forward to reaching a more optimal solution in the near future. Until a final resolution is implemented, this will remain one of our team’s highest priorities, second only to pouring gold and silver later this year. In that regard, our construction activities and production plans remain on schedule.

Kindest Regards,

Corrado De Gasperis
President and CEO