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NCCI Pit #1, Technical Revision No. 3 Adequacy Review Response, File No. M-2001-107 12/18/2006 <br />-5- <br />structures owned by KMRMC throughout the mining activities as specified in the KMRMC <br />surface use agreement. <br />A slope stability analysis has been performed to determine the minimum setbacks required <br />during the mining activities to prevent damage to the other man made structures that are within <br />200 feet of the proposed mining limits. The slope stability analysis report has been attached for <br />your reference. The setbacks that were determined in this analysis will be maintained <br />throughout the mining activities with the exception of the area adjacent to the KPK well and <br />transmission pipeline in the center of the property. <br />The setback to the oil/gas well specified in the KPK draft surface use agreement is larger than <br />the setback that was determined in the slope stability analysis (80 ft vs. 60 ft). The setback to <br />the transmission pipeline that was determined in the slope stability analysis is larger than the <br />setback specified in the KPK draft surface use agreement (60 ft vs. 25 ft). The largest setback <br />from either the KPK draft surface use agreement specifications or the slope stability analysis <br />results will be maintained from the oil/gas well and transmission line until the KPK surface use <br />agreement is finalized. Once the KPK surface use agreement is finalized the setbacks specified <br />in the agreement will be maintained. <br />A revised mining plan map showing the required setbacks is attached for your reference <br />6. NCCI will need to revise the bond estimate for phases (as initially proposed) or for the total lining <br />of the pit If a phased approach is proposed, then the operator will need to commit to reclaiming <br />the site as mining progresses to ensure that enough bond money exists to cover the cost of <br />reclamation. The Division will re-evaluate the amount of required bond based on current labor and <br />equipment rates <br />NCCI proposes to bond the reclamation in phases as initially proposed and as shown in the <br />bond calculations included in the original revision request. As stated in the response to item <br />number 2 above, NCCI plans to reclaim the site as mining progresses once the final pit liner <br />system can be determined. Reclamation activities will start once this process has concluded. <br />To compensate for any delay that occurs, NCCI proposes to bond for each phase of the <br />reclamation in a cumulative manner, as shown in the phased bond calculations. As each phase <br />of mining begins, an additional bond for the reclamation of that phase will be posted. As each <br />phase is reclaimed and approved by the Division, the bond for only that phase will then be <br />released/reduced to the 20% level, with the bond for the remainder of the phases that have yet <br />to be reclaimed remaining in place. The end result of this method of cumulative phased bonding <br />is that the Division will always have sufficient bond to cover the cost of completing the <br />reclamation of the site, regardless of what stage the reclamation is at. <br />A revised financial warranty calculation has been attached far your reference. Because the pit <br />perimeter layout was modified to account for the required setbacks determined in the slope <br />stability analysis, the quantities of the individual reclamation items have been updated. The <br />calculation also separates the individual phase costs to detail what the additional cumulative <br />bond amount for each phase will be. <br />1400 W 122ntl Avenue -Suite 120 • Westminster CO 80234 • Ph: 30357-0735 • Pax: 303-920-0343 <br />