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COLORADO OPERATIONS <br /> ® Climax Molybdenum Henderson Mine <br /> A Freeport-McMoRan Company 1746 County Road 202 <br /> Empire, CO 80438 <br /> Phone(303) 569-3221 <br /> December 5, 2019 <br /> Via Email and UPS Tracking #: 1Z 804 847 03 7393 5934 RECEIVED <br /> DEC 06 209 <br /> Mr. Peter Hays <br /> State of Colorado OfVO N OF RECLAMATION <br /> Division of Reclamation, Mining and Safety MINING AND WEN <br /> 1313 Sherman St., Rm. 215 qe.�OW /ifs , <br /> Denver, CO 8020203 <br /> Re: Reclamation Cost Estimate Update-Climax Molybdenum Company, Henderson Operations, <br /> Permit No. M-1977-342 <br /> Dear Mr. Hays: <br /> Climax Molybdenum Company, Henderson Operations is providing the enclosed 2019 Reclamation Cost <br /> Estimate update. Beginning in 2016, in anticipation of a shortened mine life due to a significant decrease <br /> in the price of molybdenum at the time, Henderson reviewed and updated reclamation concepts and costs <br /> associated with water management and tailings. This 2019 update incorporates the results of these <br /> evaluations, with an increase in reclamation costs from approximately$56MM to $171 MM. The increase is <br /> primarily associated with: <br /> • Construction, operation and maintenance of a water treatment plant at the Mill <br /> • Full dry cover of the tailing deposition area, including increased soil depth and spillway construction <br /> • Bulkheads and pumping infrastructure, as well as O&M costs for underground mine water <br /> management post-closure <br /> • Updated rates for demolition and equipment costs <br /> This will require a substantial increase in our financial warranty, which contains several different types of <br /> instruments, including deeds of trust for water rights, and we anticipate incorporating deeds of trust for land <br /> holdings as well. Therefore, we request that DRMS coordinate with us on the timing of your written notice <br /> to post additional financial warranty to allow enough time to prepare the required documentation. <br /> If you have any questions, please feel free to contact me at(720) 942-3255. <br /> Sincerely, <br /> Miguel Hamarat <br /> Environmental Manager <br /> Climax Molybdenum Company <br /> Henderson Operations <br />