2019-12-23_REVISION - M1977342

• Permit No: M1977342
• IBM Index Class Name: Revision
• Doc Date: 12/23/2019
• Doc Name: Status Update
• From: Climax Molybdenum
• To: DRMS
• Type & Sequence: AM7
• Email Name: PSH
• Media Type: D
• Archive: No

COLORADO OPERATIONS
.ri ® Climax Molybdenum Henderson Mine
A Freeport-McMoRan Company 1746 County Road 202
Empire, CO 80438
Phone [phone]
December 19, 2019 RECEIVED
DEC 23 ZA19
Via Email and UPS Tracking #: 1Z 804 847 03 7592 9821
()WON OF RECLAMATION
Mr. Peter Hays ."`"- IRMO AND SAM
State of Colorado
Division of Reclamation, Mining and Safety
1313 Sherman St., Rm. 215
Denver, CO 80203
Re: Financial Warranty Status Update - Climax Molybdenum Company, Henderson Operations,
Permit No. M-1977-342
Dear Mr. Hays:
Climax Molybdenum Company, Henderson Operations (Henderson) would like to provide the following
status update related to our November 7, 2019 meeting in which we discussed the Division's request for
additional documentation and information in support of our financial warranty and the path forward for
resolving item number 9 in your August 12, 2019 adequacy review of our Amendment 7 application.
1. Deeds of Trust: We sent Jeff Fugate copies of the recorded Deeds of Trust on November 8, 2019;
these are copies of what is recorded in Grand County and contain the Clerk and Recorder's stamp.
Per a follow-up discussion with Jeff Fugate and the Division on December 19, we understand that
the copies of the recorded Deeds of Trust are acceptable.
2. Promissory Notes: With respect to the Promissory Notes that were signed by the company back in
2005, due to an apparent oversight the then Division Director did not sign the last page of the note
as "Approved". Since mid-2005, both the Division and Henderson have proceeded pursuant to the
understanding that the Deeds of Trust and Promissory Notes were in place as authorized by the
MLRB. On November 7th we discussed options for addressing this oversight: 1)the nearly 15 years
of conduct by the parties could be recognized as sufficient. Henderson filed an updated reclamation
cost estimate on December 5 and its review will entail a revisiting of the components of the needed
financial warranty. 2) the current Director could sign those earlier documents as accepted; and 3)
new versions could be created as replacements of those 2005 notes. The Division indicated that it
wanted to reflect on this topic and get back to us. Our understanding based on December 19th
conversation is that this is still under evaluation at the Division.
3. Certificate of Insurance: A question was raised as to whether up to date proof of insurance for the
Williams Fork Pump Station and Pipeline was in place. Attached is the latest certificate of Insurance
that we understand our insurer provides to the Division annually.
4. Water Rights Valuations: With respect to the need for updated valuations of water rights used as
collateral for the financial warranty, attached are the updated valuations for the Incidental Water
Rights and the Skylark Ranch Water Rights. As indicated in item#5 below, Henderson is proposing