2000-06-23_REVISION - M1999002 (2)

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r Letter to Chris Freeman 2 Junz 23. 2000 Bonding to be Held by BLM If American Soda will be taking advantage of the bonding option provided by Rule 4.2.1(8), the minimum amount of bond to be held by the Colorado Mined Land Reclamation Board is $210,424.00, which covers the State's cost for reclamation management and administration after a bond forfeiture. This amount of bond must be submitted and accepted by the DMG prior to any drilling of commercial phase solution mining wells. This bond may be provided as a rider to the existing $26,000.00 Corporate Surety held by the Board, or may be submitted as a replacement bond. Anew Corporate Surety form is enclosed for your use if a replacement bond it to be submitted. In addition, American Soda must provide documentation that the remaining required bond in the amount of $4,208,482.00 has been posted and accepted by BLM. If BLM requires a lease bond and a production bond, the amount of these bonds is in addition to the $4,208,482.00 reclamation bond. The documentation that BLM has the bond should be a document signed by BLM personnel stating the amount of bond posted, the amount dedicated to the lease and production bonds, and the dates when the bond was posted and accepted. A letter from American Soda stating that a bond has been posted with BLM is not acceptable. In order to post the bulk of the bond with BLM under Rule 4.2.1(8), a permit commitment must be in place stating that American Soda will not accept bond release from BLM without prior DMG approval. To meet this requirement, DMG suggests that a notarized letter be prepazed with the following statement: In the event that the Bureau of Land Management (BLM) makes a decision to reduce or release the Financial Warranty held for the Yankee Gulch Sodium Minerals Project, American Soda, LLC ([he Operator) or their successor will post an acceptable replacement Warranty with the Colorado Mined Land Reclamation Board (Board) prior to any release or reduction action by the BLM. The replacement Financial Warranty posted with the Board will be in an amount equal to the amount to be released by BLM unless the Board or the Division of Minerals and Geology conducts an inspection of the Yankee Gulch Project permit area and issues a finding of concurrence or partial concurrence with the Financial Warranty release or reduction decision of [he BLM. This statement must be on American Soda letterhead and signed by a person authorized to bind the Company to the commitments contained therein. If you have any questions, please contact me. Sincer Allen C. Sorenson Reclamation Specialist enclosure(s) ce: Paul Daggett, BLM (w/enclosures) c:\windaws\personal\american soda t+ond.doc