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per acre, whereas, Task 03g uses $72 per acre. Applying this lower unit cost to <br />the 109 acre site results in a reduction in the line item FW total of $13,061. <br />3.5 Tailings Pond Area -DMG #09 <br />3.5.1 Haul Stockpiles Surge Material (from Mill) to Tailings Pond -DMG #09a <br />Henderson does not understand the DMG rationale for Task 09a. Ore surge <br />material stockpiled at the mill is a valuable resource. Costs to mine, crush and <br />convey the material will have already have been incurred by shutdown. Upon <br />operational shutdown for any but temporary emergency reasons (fire, power <br />outages, climatic damage, etc.), the surge stocks would be the last materials <br />campaigned through the mill to obtain all remaining revenue values. Even under <br />the worst-case scenario, mining operations would terminate first, followed by <br />crushing, conveying, and lastly, milling. <br />The crushed ore surge material will not require relocation to the tailings <br />impoundment. It will be processed and sold. Therefore, Henderson believes that <br />Task 09a should be deleted, reducing the total FW for this line item from $241,831 <br />to $0. <br />3.5.2 Place Geogrid on Tailings Pond -DMG #09b <br />DMG calculated the cost of geogrid on the Henderson tailings pond at $1.63 per <br />square yard, the unit cost used in the Climax FW. During the summer of 2001, <br />Climax, using Mr. Michael Ellis, PE of Ellis Environmental Engineering, Inc. (EEE), <br />conducted a real time test of the application and use of three industry geogrid <br />products on 2.67 acres of test plots on the Robinson tailing impoundment. The <br />objective of this study was to determine the "field" feasibility of using the products <br />and the cost of application and utilization. <br />Using these actual data, EEE recalculated the costs for incorporating geogrid at <br />Henderson. EEE determined from a site inspection that up to 500 acres of soft <br />material would require geogrid installation. The newly calculated unit cost, <br />including materials and labor, is $4940 per acre or a total of $2,470,000 (for 500 <br />acres) for the Henderson tailing impoundment, a total line item FW reduction of <br />$1,514,046. The EEE report with supporting calculations and information is found <br />in Exhibit E. <br />s <br />