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Mr. Tim Cazier
<br />April 9, 2014
<br />Page 14
<br />As agreed upon by the Division and CC &V, CC &V will provide an update to the Exhibit
<br />L reclamation cost data and additional "tabs" to address the reclamation costs
<br />associated with Technical Revisions approved by the Division after the approval of
<br />Amendment No. 10. CC &V agreed to provide the Division an update of Exhibit L as
<br />part of CC &V's Annual Report of the Cresson Project on a biannual basis. The first
<br />update will be included in the Annual Report that will be due on April 9, 2014 and
<br />subsequent updates will be submitted to the Division every two years after that until
<br />both CC &V and the Division agree it is no longer needed for the Cresson Project.
<br />An update of the reclamation cost estimate for Cresson Project Amendment No. 10 was
<br />completed in early 2014 and the revised Exhibit L is attached to this report. The 2014
<br />updated estimated liability amount is calculated to be $192,355,520. CC &V proposes to
<br />post a total of $194,000,000 in reclamation warranty, allowing a surplus of $1,644,480
<br />at full build -out to be applied to future Technical Revisions.
<br />This will increase the current posted warranty of $130,143,871.21 by an additional
<br />$63,856,128.79. CC &V will post the additional $63,856,128.79 in three (3) separate
<br />installments, as discussed and agreed upon by the Division. The first installment (of
<br />which $31,000,000 has been posted previously) will be increased by $7,851,856.30 and
<br />represents the 2014 cost increase for all components of the Cresson Project with the
<br />exception of the Squaw Gulch Valley Leach Facility ( "SGVLF "), which has yet to be
<br />completed. The second installment will be in approximately 2015 in the amount of
<br />approximately $36,962,819.85 and will include the completed Phase 1 SGVLF. The
<br />final installment will be posted in circa 2017 in the amount of approximately
<br />$19,041,452.65 and will be for the completed Phase 2 SGVLF.This is the last
<br />component to be completed for the Cresson Project under Amendment No. 10 to Permit
<br />No. M- 1980 -244. With that final installment, the total posting of $194,000,000 for the
<br />Cresson Project will be completed by CC &V.
<br />The total amount currently posted for the Cresson Project is $130,143,871.21. Upon
<br />acceptance by the Division of the 2014 updated reclamation cost estimate included as
<br />revised Exhibit L (Appendix A of this report), CC &V will increase the warranty amount to
<br />$137,995,727.51 ($130,143,871.21 current warranty plus $7,851,856.30 updated 2014
<br />cost except SGVLF).
<br />Per 2CCR 407 -1, 407 -4, and Rules 1.15(1)(a), Financial Warranty /Letter of Credit No.
<br /> from the Dresdner Bank AG, New York Branch, in the amount of
<br />$33,331,600.00 replaced the St. Paul Fire and Marine Surety Bond No. for the
<br />same amount. The new financial warranty was sent to DRMS on July 16, 2004 and the
<br />St Paul Fire and Marine bond was released on July 21, 2004.
<br />Liberty Mutual Surety Bond No. was increased to $38,922,271.21 effective
<br />December 17, 2012.
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