2017-04-12_REPORT - M1980244 (6)

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Reclamation accomplished during the preceding year. Approximately 15.67 acres of disturbance associated with the Cresson Project were reclaimed in 2016 as described above. New disturbances anticipated during the upcoming year. Continued development of the following areas in 2017 includes: • Main Cresson Pit (including South Cresson), • East Cresson Pit (including WHEX), • North Cresson mine areas (including development of Globe Hill Pit), • East Cresson Overburden Storage Area (ECOSA), • SGVLF and High Grade Mill, • associated haul roads, sediment control measures, topsoil stockpiles, and other ancillary disturbances Reclamation anticipated during the upcoming year. 5 acres of miscellaneous sites. Reclamation/Closure Liabilitv and Financial Warrantv: As agreed upon by CC&V and the Division CC&V will provided an update to the 'Exhibit L' reclamation cost data and additional "tabs" to address the reclamation costs associated with Technical Revisions approved by the Division and the approved Amendment No. 10. CC&V agreed to provide the Division an update of Exhibit L as part of CC&V's Annual Report of the Cresson Project for the next substantive amendment requiring the full cost review. At the commencement of 2016, CC&V maintained a financial warranty of $173,348,161 including $86,259 surplus after Technical Revision TR -76 was approved in November 2015. In 2016 three TRs were approved that required an additional $27,345 namely TR -78 ($2,455), TR - 79 ($7,480) and TR -80 ($17,410). Three additional TR's including TR -82, TR -83 and TR -85 (the last approved in 2016) did not require any additional warranty increases while TR -84 was withdrawn. Taking into account the changes outlined above, at the completion of 2016, the final required warranty was $173,375,506. To anticipate future TRs an additional $500,000 was increased to the surplus. The posted amount at end of 2016 was $173,934,420 resulting in a surplus of $558,914. An update of the reclamation cost estimate for Cresson Project Amendment No. 11 was submitted on December 17, 2015 and approved by DRMS February 8, 2017. The current estimated liability is calculated to be $207,432,274. Therefore, an additional $34,056,768 is needed to increase the bond to the required warranty and maintain the current surplus. A warranty will be posted in second quarter of 2017 to fully bond for Amendment 11. It is proposed that the next updated cost estimate will be submitted to the Division in conjunction with a future substantive Amendment for mine expansion. Per 2CCR 407-1, 407-4, and Rules 1.15(1)(a), the following Financial Warranties/Surety Bonds were placed: • Liberty Mutual Insurance bond no. for $100,000,000.00, • North American Specialty Insurance bond no. for $50,000,000.00, and • Argonaut Insurance bond no. for $23,934,420.00