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COLORADO <br /> a Division of Reclamation, <br /> +� Mining and Safety <br /> Department of Natural Resources <br /> 1313 Sherman Street,Room 215 <br /> Denver,CO 80203 <br /> September 9, 2020 <br /> Mr. Miguel Hamarat <br /> Climax Molybdenum Company <br /> Henderson Mine <br /> P.O. Box 68 <br /> Empire, CO 80438 <br /> Re: Climax Molybdenum Company; Henderson Mine; Permit No. M-1977-342; <br /> Notice of Financial Warranty Increase (SI-04) <br /> Mr. Hamarat: <br /> The Division of Reclamation, Mining and Safety (Division) currently holds a financial warranty in <br /> the amount of$56,142,434.00 for the Climax Molybdenum Company (CIVIC) - Henderson Mine. In <br /> December 2019, CIVIC submitted the 2019 Reclamation Cost Estimate Update to the Division and <br /> estimated the reclamation liability amount to be $171,125,253.00. On March 20, 2020,the <br /> Division concurred with the proposed liability amount. This will require CIVIC to increase their <br /> financial warranty by$114,982,819.00. <br /> CIVIC proposed in the Reclamation Cost Estimate Update letter dated December 5, 2019,the <br /> financial warranty increase would contain several different types of instruments, including deeds <br /> of trust for water rights and land holdings. Additionally,the Division and CIVIC met on June 30, <br /> 2020,to further discuss the surety increase and CMC's proposal. Subsequent to this meeting the <br /> Division considered the proposal and its authority and responsibilities under the Hard Rock Act and <br /> Regulations as it relates to financial assurance. The Division will continue to accept the currently <br /> held, and Board approved, water rights in the amount of$6,451,896.00. However,the Division <br /> will not accept any additional increase in the amount of water rights included in the financial <br /> warranty. Additionally,the Division will not accept deeds of trust for land holdings/real property <br /> as an instrument of the financial warranty. The Division will require CIVIC to provide the increased <br /> portion of the financial warranty in the amount of$114,982,819.00 as a Corporate Surety (Rule <br /> 4.3.3), Irrevocable Letters of Credit (Rule 4.3.4) or Certificates of Deposit (Rule 4.3.5). <br /> t4'OF.00�0'P <br /> I tiQ <br /> O <br /> 1313 Sherman Street, Room 215, Denver, CO 80203 P 303.866.3567 F 303.832.8106 https://colorado.pov/drms <br /> Jared S. Polis, Governor I Dan Gibbs, Executive Director Virginia Brannon, Director *a 1876�` <br />