1999-11-22_REVISION - M1999002 (2)

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III IIIIIIIIIIIIIIII ~ ~ 999 STATE OF COLORADO r.ROM-DIVISION OF MINERALS AND GEOLOGY Department of Natural Resources 1 113 Sherman 51., Room ?t S n-/ Denver, Colorado 8U?U3 n I Vt- CN I ~~ M l NS E R A L S Phone: 1J03186G-3557 Doc. N~'~Cf l eI/t Q yJf `U "L FAX: (JUJ) 83281 UG if & ~~~~ p,T~(PGSA' GEOLOGY 1 1 RECLAMATION MINING•SAFETY November 22, 1999 ~ B~II O.~ens Governor Greg E. lvalcher Mr. Kurt Nielsen / Eaeculrve Director ~ D: American Soda, L.L.P. / michael 8. L°"g Divw°n Dvector c/o Steigers Corporation 6551 S. Revere Pazkway, Suite 250 Englewood, CO 801 1 1-641 1 ~-- RE: Tteclamation Bond, Yankee Gulch Minerals Project, Permit No. M-99-002 Dear Mr. Nielsen: The Division of Minerals and Geology (DMG) has completed a review of the interim bonding proposal provided in a FAX dated November 16, 1999. The proposed bond in the amount of $2,603,000.00, when added to the $26,000.00 currently held by DMG and the bond for the test mine facilities currently held by the Bureau of Land Management (BLM), is adequate to cover reclamation costs for all surface disturbance approved through the 0-5 yeaz mining panel. Upon posting and acceptance of the $2,603,000.00 bond American Soda would be approved under the reclamation pemtit issued by the Mined Land Reclamation Board (MLRB) to proceed with I construction of surface facilities. Additional bond must be provided prior to drilling any of the production wells. The following caveats apply to DMG's acceptance of the proposed $2,603,000.00 bond amount: 1. It is DMG's understanding [hat the interim bond will be posted with the BLM. Posting the bond with a federal land manager is acceptable under Rule 4.2.1(8) of the MLRB regulations. However, also in accordance with Rule 4.2.1(8), American Soda must provide documentation to the DMG that the bond has been posted with and accepted by BLM. American Soda must also provide a written permit commitment stating that a replacement warranty sufficient to cover the cost of remaining reclamation liability will be posted with the MLRB prior to any reduction or release of the bond held by the federal land manager unless the DMG has issued a written conctuTence with the bond reduction or release. 2. It is DMG's understanding that BLM will require that reclamation cost line items for post- closure ground water and subsidence monitoring, for test mine facility reclamation, and for the BLM's lease bond be included in addition to the $2,603,000.00 interim bond amount. The DMG has no objection to these cost items being included in the bond to be provided.