2017-02-10_REVISION - C1981044 - Laserfiche WebLink

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Peabo IIII ENERGY Moffat County Mining, LLC Ms. Tabetha Lynch Colorado Division of Reclamation, Mining, and Safety 1313 Sherman Street — Room 215 Denver, Colorado 80203 303.866.3567 X8147 ^� S"C�9515 Routt County Road 27 RE` V GGL��jjak Creek, CO 80467 970.879 3800 FEB 10 2017 Division of Reclamation, Mining & Safety February 3, 2017 Re: Moffat County Mining, LLC (MCM) — Williams Fork Mines (C-81-044), Proposed Bond Adjustment SI -02 Dear Ms. Lynch: We received your letter referencing the change in the Reclamation Cost Estimate calculations associated with the Mid -Term Review for the Williams Fork Mines. We feel that there are several factors which are significant and relevant with respect to the calculated reclamation cost estimate, and agree that review and discussion through the Informal Conference process is the best means of incorporating consideration of these factors to arrive at a reasonable and supportable reclamation cost estimate and bond amount. For your consideration and future reference in our discussions, we ask that the following factors be considered: ➢ The Williams Fork Mines have been inactive since about 1995 and have been maintained in Temporary Cessation status during most of the intervening period (with the exception of periods when targeted reclamation of specific sites and facilities was occurring), with ongoing monitoring and maintenance ➢ Given that there are several large areas where reclamation has been completed and there is significant vegetative reestablishment, MCM prepared and submitted a request in September 2013 for partial or full bond release for the Utah Tract, Williams Fork Strip Pit, and several other limited areas. While revegetation success sampling had been done for the larger areas, the CDRMS determined that the sampling information was not sufficiently current to support a bond release determination. MCM subsequently contracted with ESCO Associates/Cedar Creek to complete two successive years of supplemental revegetation success monitoring, which was completed in 2015 and 2016. MCM anticipates receipt of the supplemental revegetation success monitoring report in late -February or early March, and at that time will resubmit the bond release application. ➢ The revised Reclamation Cost Estimate provided with the CDRMS Mid -Term Review reflected a significant increase (close to $400,000) in the cost estimate, and there had been no additional disturbance between this revised estimate and the previous estimate. A similar increase occurred shortly before the Williams Fork Mid -Term for the Foidel Creek Mine Reclamation Cost Estimate. As a result of an Informal Conference for the Foidel Creek estimate, an error in the CDRMS bond calculation package was identified and several items were flagged for review where the calculated costs had increased significantly and seemed excessive. As a result of this review, several corrections and adjustments were made in the Foidel Creek estimate. We request that an Informal Conference be scheduled to review and discuss the increases in the Williams Fork Reclamation Cost Estimate. Given that the error identified in the CDRMS bond calculation package will probably similarly impact costs for Williams Fork, we would ask that the CDRMS re -run the Mid -Term estimate and provide a copy of the revised estimate, so we are working with good numbers. If the revised and