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Doc Date:12111/2001 III IIIIIIIIIIIII III <br />sss <br />RULE 3 <br />PERFORMANCE BONDING REQUIREMENTS <br />3.05 -PERFORMANCE BOND REQUIREMENTS FOR COAL EXPLORATION <br />Consistent with the applicable regturements of this section, OMI has estimated the costs of <br />reclaiming existing and proposed exploration disturbance associated with OMI's ongoing operations <br />and has posted and maintains appropriate reclamation surety to address the estimated costs. The <br />following sections briefly discuss related bonding requiremenu and considerations. <br />3.05.2 -DETERMINATION OF BOND AMOUNT <br />The amount of the surety bond that OMI has posted and rrtaintains for reclamation of lands <br />disturbed by coal exploration activities is based on the estimated cost for the Colorado Mined Land <br />Reclamation Board to complete reclamation of all mine-related surface disturbance within the Permit <br />Area using an independent thins-parry contractor(s). The estimate of reclamation costs for <br />exploration disturbance is based on the level and nature of existing and proposed disturbance and <br />completion of reclamation consistent with the reclantation plans presented and approved in the <br />related approved exploration Notice Notice of Intent applications. The total estimated cost includes <br />appropriate overhead cosu for design, bidding, and management of the reclamation work, az well az <br />reazonable contractor profit and contingency fees. <br />In practice, OMI haz initially provided the DMG with preliminary cost estimates for reclaiming <br />existing and proposed disturbance. The DMG then completes independent bonding calctilatiorLs <br />• using the DMG's in-house bond calculation software and returvs copies of the resulting computer <br />spreadsheets for OMI's review and concurrence prior to setting the final bond amount. Coptes of <br />the final approved reclamation bond cost estimates ate provided in Exhibit 2.03-E3, Insurance and <br />Bonding Information. <br />3.05.3 -PERIOD OF LIABILITY FOR PERFORMANCE BOND <br />For areas disturbed by coal exploration activities, Che minim»m reclamation liability period extends <br />until the exploration and azsociated reclamation activities approved tinder the exploration Notice of <br />Intent have been completed in accotdattce with applicable provisions of Rules 2.02.6 and 4.21 and <br />the azsociated reclamation bond has been releazed in accordance with previsions of Rule 3.05.5. <br />3.05.4 -FORM, CONDITIONS, AND TERMS OF PERFORMANCE BONDS <br />OMI has posted and rnairttains an overall surety bond executed by OMI and a corporate surety <br />licensed to do business in the State of Colorado. The existing surety bond covets both mining and <br />exploration aciivities, complies with all applicable provisions of this section, and includes specific <br />language relative to cancellation/notification and liability. While OMI haz not utilized other bond <br />forms, the potential exists that alternative bond fortru, as addressed in the applicable regulations, <br />could be utilized in the future. <br /> <br />PR04 3.05-1 Revised August 2000 <br />