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COLORADO <br />Division of Reclamation, <br />j&7 Mining and Safety <br />Department of Natural Resources <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />March 14, 2019 <br />Internal Memo <br />To: Clayton Wein, DRMS <br />From: Tabetha Lynch, DRMS <br />Re: Deserado Mine (Permit No. C-1981-018) <br />Permit Renewal No. 7 (RN -7) <br />This memo is a review of the Deserado Mine permit against the following Rules: 2.04.7(1) and (3), 2.05.4(2) <br />(b) and (g), and 2.05.6 (3) (a) -(c). The following is my review of the permit in regards to these Rules. <br />Adequacy review items are bulleted. <br />Rule: 2.04.7(1) and (3) — Hydrolo8y Description <br />This is a review of the groundwater related sections of the Hydrology Description which include <br />groundwater information and alternative water supply information. The groundwater information <br />required by Rule 2.04.7(l) (a) has been adequately provided and no deficiencies were found per Rule <br />2.04.7(3) referring to alternative water supply information. <br />2.05.4(2)(b) Reclamation Cost Estimate <br />The cost estimate enclosed is based on the Divisions best match to the tasks available in CIRCES, and utilizes <br />Unit Costs last updated by the Division in August of 2018. <br />The cost estimate was last updated with Midterm No. 7 (MT7), which resulted in a Surety Reduction (SR -3). <br />Six permitting action has resulted in a change in liability since the last update including; MR -170, MR -171, TR - <br />71, MR -172, and MR -173. Minor Revision 174 (MR -174) was approved in August of 2018, but did not <br />increase the reclamation estimate. No tasks were removed as a part of this update. <br />The required surety for the Deserado Mine, prior to the issuance of RN7, is $5,719,215.25. Enclosed is <br />the CIRCES cost estimate for RN7. Based on this estimate the liability after the approval of RN7 will <br />be $5,801,566. The current bond held for the site is $5,808,383.08. <br />Rule: 2.05.4(2)(8) — Reclamation plan <br />Rule 2.05.4(2)(g) refers to sealing or managing the mine openings, exploration holes, wells, and other openings. <br />The required information was found to be adequately covered. <br />Rule: 2.05.6 — Mitigation of the Impacts of Mining Operations <br />Rule: 2.05.6(3) was reviewed for protection of the hydrological balance in reference to groundwater. <br />hiformation adequately meets the rule. <br />flF'C-0 <br />H <br />1313 Sherman Street, Room 215, Denver, CO 80203 P 303.866.3567 F 303.832.8106 http://mining.state.co.us I <br />John W. Hickenlooper, Governor I Mike King, Executive Director I Virginia Brannon, Director * r 1876 4 <br />