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AUG-26-62 66:41AU FROM-Henderson Nine 2nd Floor <br />MINE ID # OR PROSPECTING ID#: M-1977-342 <br />INSPECTION DATE: 8-1-02 <br />ORIGIM1A4- PUSl1C PILE <br />303 568 2630 T-400 P.003/005 f-169 <br />PAGE: 2 <br />INSPECTOR'S INITIAi,S: ACS <br />This site visit to the Henderson Mine was done in two parts. FiXSt a meeting <br />was held at the mice office to discuss the reeeac reevaluation of the amount <br />of required reclamation bond; second, a tour of the underground mine was <br />conducted to view locations where fuels, lubricants, solvents, etc_ are stored <br />as these materials would have to be removed prior to flooding of the workings <br />at the conclusion of mining operations. <br />On July 9, 2002, the Division of Minerals cad Geology (DMG) sent a letter to <br />Climax Molybdenum Company (CMC) as notification that the bond for the <br />Henderson Mine cad Mill had been reviewed and a new reclamation cost estimate <br />had been generated. The letter was received by CMC on July 11, 2002. The due <br />date for submittal of the increased bond amount, wader the terms of Rule <br />4.2.1(2) of the Mineral Rules cad Regulations, is established as September 9, <br />2002. Prior to this due date, CMC will provide information that will allow <br />DMG~to refine the cost estimate that forms the basis for the amount of bond <br />to be required. In particular, CMC will provide an accurate accounting of the <br />volumes of chemicals, fuels, and lubricants that may be stored at the mine and <br />mill and that would be required to be removed for safe disposal in the event <br />of a bond forfeiture. CMC will also provide documentation, in the Porm of a <br />contract with Mesa Oil, demonstrating that used oil removal is not a cost item <br />that should be included in the band amount. CMC stated that no chlorinated <br />solvents are being used at the mine or the mill, and these used oil management <br />is such that the fluid is non-hazardous. CMC further stated that pine oil and <br />vapor oil would be removed at zero cost by a used oil contractor. In <br />addition, CMC will provide updated water treatment cost information based on <br />the operation of the Vrad Plant. These costs will be based on slaked lime <br />treatment technology and will be more recent and more applicable than the unit <br />Costs employed in the DMG cost estimate. There rocs a diSCUSSion aboue the <br />need to bond for removal of reagents still contained in original packaging_ <br />~tC stated that their supplier of phosphorus pentasulfide (Soiutia Inc.), for <br />example, would retrieve unopened containers for a small restocking charge. It <br />has been the DMG's experience that there are substantial costs associated with <br />removal of reagents from a site, even if the packaging is intact. However, <br />if CMC provides documentation that purveyors will retrieve the unused <br />Chemicals, DMG will take the information into consideratioa_ CMC is also <br />reviewing the DMG earthworks cost estimates and may or may not suggest changes <br />to the equipment selections or other assvmptiona input to the estimating <br />worksheets. Finally, CMC pointefl out that the unit cost for hydroseeding in <br />the DMG estimate was higher for seeding the comreyor alignment area than the <br />cost used to estimate seeding aver the rest of the site. DMG will adjust the <br />estimate to employ the lower unit cost consistently on all of the estimating <br />worksheets. <br />In other matters relating to assumptions used iza the nMG estimate, CMC <br />proposes to provide enforceable permit commitments limiting the storage of <br />certain chemicals and other substances to smaller volimies than those maximum <br />capacity storage volumes listed in the SPCC Plan. CMC is not currently using <br /> <br />