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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 />Jared S. Polis, Governor | Dan Gibbs, Executive Director | Virginia Brannon, Director <br /> <br />Doug Smith <br />Oxbow Mining, LLC <br />PO Box 535 <br />Somerset, CO 81434 <br /> <br />May 31, 2019 <br /> <br />Re: Elk Creek Mine (Permit No. C-1981 -022) <br />Surety Release No. 1, (SL-1) <br />Initial Adequacy Review <br /> <br />Dear Mr. Smith, <br /> <br />The Colorado Division of Reclamation, Mining and Safety (Division) has completed the initial review of <br />materials submitted by Oxbow Mining, LLC (OMLLC) in support of the SL-1 application, and conducted <br />an inspection to evaluate the application. The Division’s comments and questions are below, with items <br />that need to be addressed highlighted in bold type. <br /> <br />1. The parcels proposed for phase I bond release, as shown on the map titled Areas For SL-1 Phase <br />1 Release, include two sections of the reconstructed Elk Creek channel. Due to the relatively <br />recent construction of the channel, the observed instability, and the high probability for future <br />stability issues based on the lack of vegetative growth surrounding the Elk Creek channel, the <br />Division has determined that the Elk Creek channel does not meet the requirements of phase I <br />bond release. <br /> <br />A corridor encompassing the Elk Creek channel should be removed from the requested SL-1 <br />parcels. Due to the permanent channel designation of the Elk Creek channel, a topsoil <br />replacement requirement and a revegetation standard will not be associated with the corridor <br />of the channel. As such, the Elk Creek channel will be eligible for phase I, II and III bond release <br />together. The full phase I, II and III bond release will generally occur at the time of final bond <br />release of the site. <br /> <br />Removal of the channel corridor will reduce the area of the SL-1 parcels, and hence reduce the <br />maximum dollar amount of bond release available with SL-1. The maximum dollar amount <br />available for release, X, will be calculated using the following formula: <br /> 𝑋𝑋=𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 𝑠𝑠𝑅𝑅𝑅𝑅𝑅𝑅𝑠𝑠𝑠𝑠 𝑝𝑝𝑅𝑅𝑅𝑅𝑝𝑝𝑅𝑅 𝑠𝑠𝑝𝑝 𝑆𝑆𝑆𝑆1 × π‘†π‘†π‘†π‘†1 π‘Žπ‘Žπ‘…π‘…π‘…π‘…π‘Žπ‘Žπ‘‡π‘‡π‘π‘π‘ π‘ π‘Žπ‘Žπ‘‡π‘‡ 𝑅𝑅𝑅𝑅𝑠𝑠𝑠𝑠𝑅𝑅𝑅𝑅𝑑𝑑𝑅𝑅𝑅𝑅 π‘Žπ‘Žπ‘…π‘…π‘…π‘…π‘Žπ‘Ž 𝑝𝑝𝑅𝑅𝑅𝑅𝑝𝑝𝑅𝑅 𝑠𝑠𝑝𝑝 𝑆𝑆𝑆𝑆1 × 0.6 <br />