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<br />MINE ID # OR PROSPECTING ID #
<br />INSPECTION DATE 12/8/98
<br />M-77- 7
<br />
<br />INSPEC:TOR'S INITIALS WHE
<br />Indian ricegrass and Four wing saltbush. The reclamation seed mix imposed by DOE included Arriba western
<br />wheatgrass, Vaughn sideoats grama, Covington blue grama, Paloma Indian ricegrass, Sodar streambank
<br />wheatgrass, Lodorm green needlegrass, Pastura little bluestem, Rincon fourwing saltbush, Cedar Palmer
<br />penstemon, Scarlet globemallow, Winterfat, Pinion pine, and Utah juniper. The operator did not clearly
<br />indicate that the operator desired to revise the DMG permit to include the DOE imposed seed mix, and did not
<br />submit the information through the appropriate Technical Revision process. Therefore, the DMG permit was
<br />not revised to include the DOE imposed seed mix. If the operator desires to revise the reclamation plan to
<br />include the DOE imposed seed mix, please submit such request through the TR process.
<br />Financial Warranty The applicant for SO-01, Gold Eagle Mining, has waived their right to 30 day processing
<br />of SO-O1, to allow DMG time to review the cost of reclamation and financial warranty requirements. DMG
<br />has completed its preliminary review of the cost of reclamation for existing conditions. CIMG has estimated
<br />the current cost of reclamation to total 526,626. Please find enclosed, 18 pages of summaries, worksheets
<br />and data sheets, utilized by DMG to estimate the cost of reclamation.
<br />However, DMG records indicate that the applicant has a reclamation bond with the DOE, for several DOE lease
<br />blocks. The existing DOE bond for DOE Lease Block AT-(05-11-ML-60.8-C-SR-13, totals 522,000. DMG
<br />records indicate that financial warranty for the Ellison Mine, Permit No. M-78-342, in the amount of 510,750,
<br />and financial warranty for the Hawkeye Mine, Permit No. M-78-311, in the amount of 55,000 is already
<br />covered under the 522,000 DOE bond. Total DOE bond for C-SR-13 is 522,000. T~~tal DMG financial
<br />warranty for the Ellison and Hawkeye Mines, covered by the DOE bond, is 515,750. Therefore, 56,250 of
<br />the DOE bond for C-SR-13 is available to cover reclamation costs for the Burros Mine.
<br />Given the S6,250 available DOE bond, applicable to the Burros Mine, DMG has determined that the applicant,
<br />Gold Eagle Mining, must submit 520,376 financial warranty to DMG for the Burros PAine prior to DMG
<br />approving SO-01. Pursuant to Rule 4.2.1(2), the applicant has 60 days to submit 520,376 financial warranty,
<br />to provide a total financial warranty not less than 526,626. DMG cannot approve SO-01, allowing Gold Eagle
<br />Mining to be the successor operator, until the financial warranty is received and approved.
<br />Compliance with Rule 4.2.118) One of the requirements set forth under Rule 4.2.118) for acceptance by the
<br />DMG of bonds posted with federal land management agencies, such as the DOE, is thatlie approved ep emit
<br />annlir•ati n must contain a nrovision that in the event the federal land management agency reduces the
<br />financial warranty the operator must pest an acceptable replacement warranty with the: DMG prior to anv
<br />release by the federal land management agency. Since the permit for the Burros Mine does not contain such
<br />a provision, Gold Eagle Mining, Inc., is required to include this necessary provision either within SO-01 or
<br />through a Technical Revision, immediately following DMG approval of SO-01. Failure to include such provision
<br />within the permit documentation may result in enforcement.
<br />I & E Contact Address
<br />NAME Don Coram
<br />OPERATOR Gold Eagle Mining. Inc.
<br />STREET 845 East Main Street
<br />CITY/STATE/ZIP Montrose. CO 81401
<br />cc: Tom Gillis, DMG
<br />^ COE
<br />X BLM Durango, Don Englishman
<br />^ FS
<br />^ HW
<br />^ HMWMD ICHI
<br />^ SE
<br />^ WOCD ICHI
<br />X Tony Bates, Umetc~~ Grand Junction
<br />
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