November 11, 2004

Biogeohydrological Environment and Physical Aspects of the Henderson

Mine Site

Climax Molybdenum Company

Henderson Operations

November 11, 2004

Surface Geologic Features

Shannon, Nelson, & Golden (2004)

November 11, 2004

Surface Geology of District

Shannon, Nelson, & Golden (2004)

November 11, 2004

Geologic Section of District

Shannon, Nelson, & Golden (2004)

November 11, 2004

GeologyClassic Climax-type porphyry molybdenum deposit

Host rock is granite/aplite porphyry

474,000 feet of core drilling

Limited accessory mineralization

November 11, 2004

Block Diagram of Henderson / Urad System

November 11, 2004

Classification of Molybdenum Deposits

November 11, 2004

Geologic Section of Climax Deposit

November 11, 2004

Generation of Henderson Deposit

November 11, 2004

Vein Development

November 11, 2004

Sequence of Intrusions – A, B

November 11, 2004

Sequence of Intrusions – C, D

November 11, 2004

Sequence of Intrusions – E, F

November 11, 2004

Sequence of Intrusions – G, H

November 11, 2004

Sequence of Mineralization

November 11, 2004

Henderson Alteration Zones

November 11, 2004

Geologic Structure on 7700 Level

November 11, 2004

DUSEL Schematic with Geology

Red Mountain - Mine Harrison Mountain

Central Campus, Elev. 6750 ft, (4200 mwe)

Midway Campus, Elev. 5825 ft, (5100 mwe)

Lower Campus, Elev. 4900 ft. (6000 mwe)

EarthLab/GeoscienceArea

Red MtOrigional Topography

Harrison Mt

Internal Shaft

Access Ramp

November 11, 2004

Core Run from Henderson Deposit

November 11, 2004

Existing Core Drilling

•606 holes totaling 474,000 ft (90 miles) have been core drilled at the Henderson site.

•Assuming a cost for core drilling of $50/ft, the value of this drilling would be $23,700,000.

•Henderson management intends to make the existing portion of these cores available for study by the scientific community as part of the DUSEL.

•This transfer will provide an unprecedented level of information to support the development of the DUSEL geoscience program.

November 11, 2004

Shaft CollarElev 10,400 ft

Shaft BottomElev 7,500 ft

LA Ramp

9HW Drift

Central CampusElev. 6,750 ft(4200 mwe)

Access Ramps

UNO

PC2 Conveyor to Mill Site

7065 Level

Crusher

PC1 Conveyor

7500 Level

2500 ft Drill HoleCompleted Sept 11,2004

Initial Core Drilling Harrison Mountain

A 2500 ft core hole has been drilled from the 9HW drift through the Central Campus area.

Initial geologic logging shows the rock mass to be very competent Urad Porphyry (RQD >85)

November 11, 2004

Plan View of DUSEL Drillhole

November 11, 2004

Section View of DUSEL Drillhole

November 11, 2004

Drill Hole Piercing Proposed Lab Site (1)

• The hole is 2,500 feet in length

• The hole had an inclination of -26 degrees with the top at the 7,500 feet and the bottom at 6,300 feet.

• The hole was drilled at HQ-3 (2.4 inches in dia.) for 1,397 feet and NQ-3 (1.8 inches in dia.) for 1,102 feet.

• Hole deviation was less than 200 feet

• Geological logging is complete

November 11, 2004

Drill Hole Piercing Proposed Lab Site (2)

• The rock is a rhyolite or aplite porphry

• The rock is very hard with a high percentage of quartz.

• The rock is expected to have a high compressive strength (this will be tested)

• The RQD is quite high, 70 – 100.

• There is little evidence of mineralization

November 11, 2004

Drill Hole Piercing Proposed Lab Site (3)

• There were only a few small fractured zones, not near the Laboratory area, and no major fault zones

• There is very little water, only about 1.5 gpm.

• Due to the hardness and strength, there is some potential for rockbursting when mining. This potential is no greater than what has been experienced at Henderson in the past.

November 11, 2004

Hydrogeologic Environment (1)

• Intrusive rocks with very low primary permeability

• Ground water restricted to discrete zones of high flow

• Existing porosity & permeability are secondary and result from fracturing.

• Porosity and permeability are not related to rock type

• Water is being mined

• Recharge is insignificant

• 741 gallons of water / cubic ft of excavation on 8035 /L

November 11, 2004

Hydrogeologic Environment (2)

• Henderson 2000 project experience:

Inflows 10’s of gpms rather than 100’s or 1000’s of gpms

Max inflows of 30-40 gpm from any specific structure

Water handled by excavation of periodic sumps during mining of ramps downward

Water generally warm to hot on lower levels, ~120 degrees F

• Vasquez Fault - major source of high water inflows and pressures encountered during 100+ miles of drifting

November 11, 2004

Biogeologic Environment

• Biogeologic conditions have not been studied

• Geologic environment contains:

Warm to Hot water

Sulfide Mineralization

• Similar environments in mine waste dumps are known to host sulfide-consuming bacteria

November 11, 2004

Summary of Henderson Site Privately owned 11.7 km2 area with access to several km depth Existing Infrastructure and access

Large diameter shaft Existing ventilation system Rock handling system Redundant electrical power – 114KV transmission lines Communication – Fiber-optics

Close to Denver and International Airport No permitting will be required for excavations or drilling programs Extensive core drilling exists, geology of site well known Area under Harrison Mt is competent Urad Porphory and is likely to be

well suited for large excavations required for physics experiments. Area under Red Mt provides access to a highly variable geologic

environment hosting a 360 million ton molybdenum deposit. Red Mt area provides site for geoscience experiments in hydrogeology,

fluid flow, etc… Site provides access to large volumes of uncontaminated rock for

biogeology research and experiments.

November 11, 2004

The End

Climax Molybdenum Company

Henderson Operations