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more than 85 percent of the estimated value of such property. Hence, the estimated salvage <br />value minus the costs for contractor profit and administrative costs, would be further <br />reduced by a factor of .85 before being applied to the amount of required bond. <br />CEMEX will need to comply with the requirements of Rule 4.12 if salvage credit is used to <br />off set costs within the reclamation cost estimate. Without full compliance, the cost to <br />remove these structures will need to be included in the estimate. <br />2. Banks and Gesso presented two estimates for demolishing the plant azea. Cost Estimate A <br />assumes that all concrete is crushed to vazious sizes, and that the material is sold as <br />aggregate for a total cost of $3.9 million. Cost Estimate B includes a total cost of the <br />demolition and reclamation assuming that all material is demolished, stockpiled and covered <br />and the area is revegetated. Cost Estimate B totals $4.6 million. CEMEX has agreed to <br />submit $3.9 million, which reflects the cost associated with crushing and selling the material- <br />- as an aggregate product. Please be aware that the intent of the financial wazranty is to insure <br />that the State of Colorado has the necessary funds to complete reclamation in accordance <br />with the approved mining and reclamation plan in the event the bond is forfeited. The <br />Division is unable to accept an estimate that requires the State of Colorado to process <br />material to be sold as aggregate, thus in turn acting as a mine operator. The Division's <br />jurisdiction is to reclaim the site to the standazds set forth in the permit, and ensure that the <br />financial warranty can achieve ttiis.goal. <br />-Cost Estimate B includes a cost for demolition and disposal of the material on site in the: <br />amount of $4.6 million. The Division believes this scenario should be applied to reflect the <br />required financial warranty for the Lyons site. However, in order to approve this plan, some <br />modification to the mining and reclamation plan maybe required. This is discussed in more <br />detail`below: <br />3. In order for mining structures and debris to be disposed of within the permit azea, the <br />operator will need to revise the mining and reclamation plan. Specifically, the operator will <br />need to revise the permit to designate a disposal location for the structures and concrete to <br />be buried on site. In addition, the operator will need to commit to a cover depth, and the <br />source for the covei material (including a cover depth for all foundations to remain in <br />place). Without such designation, the Division will need to assume that all material is <br />hauled and disposed of in an approved landfill off site. The cost for such disposal in an off <br />site landfill is much higher than the cost proposed by Banks and Gesso. <br />The Division recently approved such a technical revision for the Henderson Mine and Mill <br />(Permit No. M-1977-342) in order to reduce the structural demolition cost. Within the <br />submittal, the operator designated a location for the debris, committed to 3' of overburden <br />material over the disposal site and included information to protect the surface and <br />groundwater by lining the disposal site with an impermeable material. The technical <br />revision filed by Henderson substantially reduced the cost for demolishing structures at the <br />mine. <br />If CEMEX proposes to dispose of the material within the affected area of the permit, then a <br />technical revision to the permit would be required. In addition, the components of the <br />reclamation cost estimate prepared by Banks and Gesso should also be included in the <br />technical revision. <br />