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<br /> <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 | Mike King, Executive Director | Virginia Brannon, Director <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />RE: Foidel Creek Mine; C-1982-056; Proposed Bond Adjustment <br /> SI-02; Post Informal Conference Reclamation Cost Estimate <br /> <br />Dear Mr. Nettleton, <br /> <br />The Colorado Division of Reclamation, Mining (Division) has updated the reclamation cost estimate for <br />the Foidel Creek Mine that was conducted for the proposed bond adjustment (SI-02). This updated cost <br />estimate was conducted based on the issues we discussed during the March 30, 2016 informal conference <br />for SI-02. Below is a discussion of the changes to the cost estimate. The cost estimate is enclosed for <br />your review. The current required surety at the site is set at $9,998,275.02. Based on the Division’s <br />estimate, the liability at the site is $10,055,009.20, this is $56,734.18 more than the current required <br />surety. The current bond held for the site is $10,056,089.00. Given this, Twentymile Coal, LLC. (TC) <br />will not need to increase their financial warranty at this time. <br /> <br />During the informal conference, equipment ownership and operating costs were discussed primarily <br />regarding the cost of the D10 dozer and several other pieces of equipment used in the estimate. The <br />Division utilizes the Cost Reference Guide (CRG) published by EquipmentWatch to derive the hourly <br />ownership and operating cost for each piece of equipment. Previously, the Division would adjust the <br />costs from the CRG using several variables. After careful consideration and discussion with Division <br />management, the Division no longer believes this adjustment is necessary. The Division reprogrammed <br />our cost estimating software, the Colorado Integrated Reclamation Cost Estimating System (CIRCES) to <br />no longer make these adjustments to the equipment ownership and operating cost. Given this, each task <br />had to be re-calculated and resulted in reduced equipment and ownership costs. <br /> <br />Another item discussed was the operator labor cost for a water truck and motor grader. The Division <br />utilizes data obtained from the Colorado Department of Transportation (CDOT) to estimate local labor <br />rates with fringe benefits and we also accounts for employer burden (unemployment, FICA and workers <br />compensation) costs. Below are the operator rates for the two pieces of equipment in question: <br /> <br />Description <br />Base <br />Rate Fringe <br />Workers <br />Comp. FICA Unemployment TOTAL <br />Grader - rough blade $23.05 $6.45 13.50% 7.65% 6.30% $35.83 <br />Water Tanker $20.39 $3.43 13.50% 7.65% 6.30% $29.42 <br />June 14, 2016 <br /> <br />Jerry Nettleton <br />Twentymile Coal, LLC. <br />29515 Routt County Road 27 <br />Oak Creek, CO 80467 <br /> <br />