2003-03-12_REVISION - M1977342 (2)

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MAR-10-03 04:36PM FROM-Henderson Mina 2nd Floor Letter to Ms. Lurlina Underbrink-Curran 303 566 2630 T-916 P.004/005 F-637 and operation of dte inlet/outlet structure at the tailing impoundment and the other water storage reservoirs located on the property. At closure, Climax Molybdenum Co. may choose to sell some assets in the Williams Fork Valley or pursue other income generating oppom~nities, but will retain the environmental liability and any water treatment obligations related to the tailing deposition area. 3. Water treamtent. The financial warranty covers only the reclamation and environmental obligations during reclamation. Henderson, as stated above, will retain responsibility for water treatment obligations that may exist post-closure. 4. Reclamation Costs. The objective of the wet cover is not to reduce the financial warranty. This amendment is intended to improve the level of reclamation to meet current industry standards. We have not evaluated the costs for this alternative, but expect that the overall cost of a wet cover will not be significantly different than the cost for a dry cover. 5. Droueht effects and water rights- CMC is in the process of moving water storage rights to the tailing impoundment. Those rights will be adequate to allow storage of water on the impoundment for the wet cover. The only consumptive use anticipated by the cover is from evaporation. CMC's current water rights in the Williams Fork will be more than adequate to meet this incidental depletion. Once completed, a drought should not have a significant impact on the wet cover. Should the reclauned tailing impoundment be used as a water resource reservoir, the parry malting use of the storage would supply the rights. 6. Negative effects of a breach. etc. Obviously, a breach would have significant off-site impacts, Henderson has hired outside consultants to complete a dam stability analysis and an evaluation of extreme precipitation events possible at the rnillsite. The risk of a breach of the tailing impoundment under the wet closure scenario is exhemely unlikely. In fact, we believe that the risks are greater under a dry cover analysis since it does not include a passive method to remove water from the surface of the reclaimed tailing impoundment. ,As I stated during our meeting, Henderson is willing to present our engineering design for the wet cover in an amendment to the reclamation permit rather thav using the less formal technical revision process. In fact, we have notified the Division that we will submit future details on the wet closure scenario by amendment. ON-SITE LANDFILLS The issue of on-site landfills is not a pan of our current amendment. In fact, the inert debris landfills proposed in TR-12 were approved when the State approved that technical revision on January 24, 2003. Henderson has always complied with all applicable landfill regulations. As with all other aspects of our operation, we will not construct any new landfills without first obta'n'ng the required permits. Should this include a County pemmt, we will apply for one. We believe that the Covnty's letter mis-characterizes Henderson's us of its on-site landfill. This landfill does NOT operate "with no oversight" as the county alleges. Although exempt from Certificate of Designation (CD) requirements, the landfill is not