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STATE OF COLORADO <br />DIVISION OF MINERALS AND GEOLOGY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3567 <br />FAX: (303) 832-8106 <br />March 11, 2004 <br />Ron Thompson <br />Peak Project Management <br />34115 Co. Rd. 20.8 <br />Trinidad, Colorado 81082 <br />RE: Bond Release Procedure, New Elk Mine, #C-81-012 <br />Mr. Thompson: <br />COLORADO <br />DIVISION O F <br />MIN aRALS <br />GEOLOGY <br />REC LAMATION•NINING <br />SAf ETY•SCIENCE <br />Bill Owens <br />Governor <br />Russell George <br />Executive Director <br />Ronald W. Canany <br />Division Director <br />Natural Resource Trus[Ep <br />The Division of Minerals and Geology (DMG) has reviewed your correspondence of March 9, <br />2004 regarding a forthcoming bond release application for the New Elk Mine, #C-81-012. As we <br />understand it, you are asking for input concerning the appropriate DMG processes to facilitate <br />this request, due to the complexity of the issues. <br />It appears you have three distinct categories of reclamation liability work: <br />• Activities bonded but never implemented, and you will not implement <br />Actual Phase I earthwork performed on both the East and West mines <br />• Structure demolition without any associated Phase I earthwork <br />All of these categories are appropriate to include under the Phase I bond release process. <br />However, a few comments are worthy of mention. For the activities that you will not implement <br />and would like to remove from the estimate, in addition to the necessary identification of these <br />tasks in the approved estimate, the DMG will need the appropriate revised permit pages <br />removing approval of these activities. For the Phase I earthwork completed, the DMG will need <br />a map showing all areas and demonstrating that the post mining topography has been achieved, <br />in addition to identification of the associated bond costs. For the structure demolition completed, <br />areas encompassing the former structures should be defined and all bond costs, including <br />structure demo, B & G, topsoil, reseeding, and ancillary costs should be identified to arrive at <br />100% of the reclamation cost for the area of the former structure. This will likely require <br />coordination with the DMG since our cost estimation program was used to produce the currently <br />approved estimate. <br />If you have any questions, please call me. <br />Sic ely, <br />K Gorham <br />Environmental Protection Specialist II <br />Once of Office of Colorado <br />Mined Land Reclamation Active and InaRive Mines Geological Survey <br />