Colorado Goldfields Inc. Announces Innovative Dry Stack Plan Toward Successful Pride of the West Mill Permitting

Colorado Goldfields Inc. Announces Innovative Dry Stack Plan Toward Successful Pride of the West Mill Permitting

Colorado Goldfields Inc. announced today that the Company is developing a dry stack approach for tailings disposal at its Pride of the West Mill. Although used extensively in other parts of the world, such as Chile, South America, Mexico, and the Middle East, this is an innovative method of tailings disposal for the U.S. and Colorado. Mining operations using dry stacking in the U.S. include: Greens Creek Mine, the Pogo Mine, Nixon’s Fork, and the Kennings ton mine all located in Alaska, TVX Gold located in Montana, JR Simplot Co. in Idaho, and Mineral Ridge located in Nevada.

“This approach to tailings disposal should remove all regulatory agency concerns surrounding the existing tailings ponds since those ponds will be reclaimed. Furthermore, and maybe even more importantly, this approach will increase the ultimate useful life and financial viability of the mill by several years,” stated Stephen C. Fearn, consulting Registered Professional Engineer for Colorado Goldfields.

Lee Rice, President & CEO for the Company, described dry stack plan and its importance as follows:

Moving forward we will develop a “dry stack” method of tailings disposal as part of a new permit amendment.

The DRMS accepted the parts of the amendment regarding:

* Mill building; * Laboratory building; * Ore stockpile area; * Leach plant building; * River protection dike;

* Procedures for custom or “toll” milling.

In a Filtered Tailings or Dry Stacking system, the mill tailings are filtered (de-watered) to remove approximately 85% of the water at the mill plant itself. The resulting material is approximately 85% solids and 15% water and can be transported by belt conveyor or trucks to a disposal area where they can be placed in an environmentally contained area and handled with earth moving equipment.

Utilizing this approach for tailings disposal will remove some of the issues associated with our prior permit amendment, such as:

* Providing improved long term geotechnical stability of the tailings disposal area; * Reducing concerns about potential seismic activity; * Greatly reduce environmental risks of contamination of ground and surface water;

* Making overall compliance with environmental regulations much more efficient and straight forward.

We will also realize some immediate benefits from this Dry Stack approach, such as:

* Smaller environmental footprint for tailings disposal area; * Smaller operating area at any one time, which is easier to manage; * Vastly improved management of tailing disposal operations during winter season, which is approximately 7 months of the year; * Facilitates the ability to use tailings for mine backfill to improve underground ore extraction efficiency and reduce need for additional tailings disposal area; * Conserves water use in the milling process;

* Lower long-term environmental liability from possible failure of conventional tailings dam structures.

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