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3.8,1 Haul Ore Spilled from Conveyor to Tailing Pond -DMG #24d <br />When initial calculations were made regarding spillage of ore from the overland <br />conveyor system, estimates were based on 1000 yards being spilled along the <br />entire length of the system. However, in practice, this has not occurred. Spillage <br />has been limited to less than 50 cubic yards at four locations; the PC2 return, PC3 <br />turn-over at PC2/PC3, PC3 turn-over at PC3/SC1, and at the bottom of the 28 <br />percent grade. There is no evidence of spillage along the length of the con•idor in <br />general. In addition, USFS conditions for approval of the land exchange require <br />continuous removal of spillage. Accumulation is not allowed. <br />The issue of ore spillage and hauling spilled materials to the tailing impoundment <br />was revisited by EEE. Following a site inspection, Henderson determined that <br />spilled ore pickup from five (5) locations with a maximum of 22 cubic yards at each <br />location (110 cubic yards total) would be more than conservative for purposes of <br />estimating the line item FW for Task 24d. DMG used $15 per cubic yard as the unit <br />cost for this task. EEE determined that a unit cost of $11.58 per cubic yard was <br />more appropriate, thus reducing the total FW cost for this line item by $13,734, <br />from $15,008 to $1274. <br />The report, including supporting documentation, by EEE is located in Exhibit I. <br />3.8.2 Revegetate Conveyor Corridor -DMG #24g <br />Henderson notes that DMG Task 09g utilizes a unit cost of $1308 per acre for <br />hydroseed application of the Climax seed mix. This unit cost, likewise, has been <br />used by DMG for other CMC hydroseeding application estimates. Task 24g for the <br />conveyor corridor is $2395 per acre, significantly different than the standard. <br />Henderson sees no reason why the standard, with its long history of proven <br />success cannot be applied to the conveyor corridor. This unit cost change will <br />reduce this line item from $191,694 to $104,688, a total FW reduction of $87,006. <br />3.9 Mill Water Treatment System -DMG #25 <br />The need for water treatment at the mill site was recognized by Henderson in the <br />original Permit (Section 9.9; Page 9-6). The type of treatment, capital costs for the <br />treatment facility, and operating costs have been defined by experience at the <br />Henderson mine Woods Creek facility and from the water treatment plant <br />constructed at the Argo Tunnel in Idaho Springs, Colorado by the CDPHE. <br />11 <br />