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COLORADO <br />Division of Reclamation, <br />Mining and Safety <br />Department of Natural Resources <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />February 22, 2016 <br />Jerry Nettleton <br />Twentymile Coal, LLC. <br />29515 Routt County Road 27 <br />Oak Creek, CO 80467 <br />RE: Foidel Creek Mine; C-1982-056; Proposed Bond Adjustment <br />SI -02; Updated Reclamation Cost Estimate <br />Dear Mr. Nettleton, <br />As you are aware, the Colorado Division of Reclamation, Mining and Safety (Division), has proposed a <br />bond adjustment or surety increase (SI -02) for the Foidel Creek Mine. When the Division conducted <br />Midterm Review No. 7 (MT -07) in November of 2015, we updated the reclamation cost estimate for the <br />site. Since that time, the Division initiated SI -02 in order to increase the bond held for the Foidel Creek <br />Mine. In a letter dated January 6, 2016 the Division notified Twentymile Coal, LLC. (TC) of the <br />proposed bond adjustment. This letter indicated the Division believed the reclamation liability at the site <br />was $10,577,589.57 based on the reclamation cost estimate conducted for MT -07 and the approval of <br />Minor Revision No. 291 (MR -291). <br />Subsequent to the January 6, 2016 letter, TC requested to have an informal conference to discuss the <br />proposed bond adjustment and requested that the informal conference be held at the end of February. On <br />February 16, 2016 the Division updated the unit costs used in our cost estimating software (CIRCES) and <br />Division management requested that I update the reclamation cost estimate for the Foidel Creek Mine <br />using the new unit costs since SI -02 had not been finalized and issued. This was discussed with TC and it <br />was agreed the informal conference would be delayed until the beginning of March, 2016 in order for the <br />Division to update the reclamation cost estimate and for TC to review the new estimate. <br />Enclosed is the new reclamation cost estimate for the site. The Division has calculated the reclamation <br />cost for the site to be $10,652,504.29. This amount is $596,415.29 more than the actual bond held for the <br />mine and is $718,993.50 more than the current liability set for the site. Overall, the equipment and <br />equipment operator costs increased and decreased depending on the type of equipment used with a <br />general net increase in costs. Demolition costs went down. Revegetation costs increased for the site. <br />The primary reason for this is the cost the Division was using for the Foidel Creek Mine to estimate the <br />cost to drill seed the affected area. The drill seeding cost the Division used to estimate revegetation costs <br />for the MT -07 cost estimate was evaluated with the CIRCES update. Upon review of the drill seeding <br />cost the Division was using, the cost did not appear to be adequate. The Division elected to use the <br />mechanical seeding costs from RSMeans Site Work and Landscape Cost Data, the 2015, 34t' annual <br />edition. This resulted in higher revegetation costs. For details regarding the Division estimate, please <br />review the enclosed reclamation cost estimate. <br />QF GQ�Q <br />1313 Sherman Street, Room 215, Denver, CO 80203 P 303.866.3567 F 303.832.8106 http://mining.state.co.us <br />John W. Hickenlooper, Governor I Mike King, Executive Director I Virginia Brannon, Director * * 1g76 <br />