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© MWH <br />MONTGOMERYWATSON HARZA <br />SL <br />`'t~ <br />October 10, 2002 QG~+~ty ` <br />o V <br />E lorado Div,sion oEMinerals &~Geology OCo~°`~`~e`a\SeodGc <br />1313 Sherman Street -Room 215 ~ <br />Denver, Colorado 80203 <br />(303) 86G-3567 <br />Re: Energy Fuels Coal, Inc. -Southfield Mine (Permit No. C-81-014), Application for Bond <br />Reduction and Partial Phase I Bond Release <br />Dear Mr. Stark: <br />The State of Colorado, tluough the Colorado Department of Natural Resources (DNR), currently <br />holds a reclamation bond in the amount of $914,443 as surety Eor final reclamation of tniniug <br />disturbance azeas associated with Energy Fuels Coal, Inc.'s (EFCI) Southfield Mine and Loadout <br />near Florence, Colorado. With this application, EFCI is requesting a bond reduction and Phase I <br />partial bond release for the Southfield Mine azea. <br />The DMG recalculated the reclamation liability for the Southfield Mine and Loadout in February <br />2002 at $900,371. The difference between the current bond for the Southfield Mine ($914,443) <br />and the remaining reclamation Iiabiliry is $14,072. This amount is excess bond coverage above and <br />beyond current liabilities. EFCI is requesting that the DMG approve a bond reduction <br />corresponding to this excess bond amount. <br />Phase I partial bond release is requested for the 68.6 acres reclaimed in the Southfield Mine area <br />(includes progressive reclamation of refuse disposal area and 2001-2002 reclamation) for <br />completion of final backfilling, grading, and drainage control in compliance with the approved <br />reclamation. The requested Phase I paztial bond release amount is based on 60 percent of the <br />estimated total reclamation cost for the Southfield Mine area, or $519,940. <br />The total requested bond reduction and partial bond release amount is $534,012. Release of this <br />amount will result in a remaining surety balance of $380,431. The estimated cost to complete all <br />remaining reclamation is approximately $240,640, so the remaining bond balance is more than <br />adequate to provide for completion of remaining reclamation. <br />The accompanying bond reduction and partial bond release request and supporting documentation <br />address all applicable provisions of Rules 3.03.1(2)(a) and (b). In order to facilitate and expedite <br />DMG review of this bond release application, EFCI has assembled, consolidated, and provided, as <br />appendices to this application, extensive supporting documentation including the following. <br />Appendix <br />A Southfield Reclamation Plan <br />B DMG Inspection Repotts <br />C 2000 Southfield Mine Annual Reclamation Report <br />D Notifications and Proposed Public Notice <br />E DMG Bonding Calculations (With notations reflecting remaining liabilities) <br />P.O. BOX 774018 TCI: 970 879 6280 Delivering Innovative Projects and Solutions Worldwide <br />1475 Pine Grove Road, Suite 109 fax: 970 879 9048 <br />Steamboat Springs, Colorado <br />80477 <br />