GENERAL49846

• Permit No: M1977342
• IBM Index Class Name: General Documents
• Doc Date: 9/20/2002
• Doc Name: Clarification Letter for Reclamation Cost Estimate
• From: Climax Molybdenum Company
• To: DMG
• Media Type: D
• Archive: No

AI19-26-02 08:41AN FROYrNenderson Mine 2nd Floor
MINE ID # OR PROSPECTING ID#: M-1977-342
INSPECTION DATE: 8-1-02
ORIGINA4- PVELIC FILE
303 568 2830 T-400 P.OD3/005 F-169
PAGE: 2
INSPECTOR'S INITIALS: ACS
This bite V1Sit t0 the Henderson Mine was done in twp parts- Fir$t a meeting
was held at the mine office to discuss the recent reevaluation of the amount
of required reclamaeion bond; second, a tour of the underground mine Was
COndllCted t0 Vlew 1pCdtiOnB where fuels, lubricarttS, SplvEntS, etC- are sCOYed
as these materials would have to be removed prior to Flooding o£ the workings
at the conclusion of mining operatians-
On July 9, 2002, the Division of Minerals and Geology (DMG) sent a letter to
Climax Molybdenum Company (CMC} as notification that the bond for the
Henderson Mice and Mill had been reviewed and a new reclamation cost estimate
had been generated. The letter was received by CMC on July 11, 2002. The due
date for submittal of the increased bond amount, under the terms of Rule
4,2.1(2) of the Mineral Rules and Regulations, is established as September 9,
2002. Prior to this flue date, CMC will provide information that will allow
DMG to refine the cost Estimate that forms the basis for the amount of bond
to be required. In particular, CMC will provide an accurate accounting of the
volumes of chemicals, fuels, and lubricants that may be stored at the mine and
mill and that would be reciuired to be removed for safe disposal in the event
o£ a bond forfeiture. CMC will also provide documentation, in the Porm of a
contract with Mesa Oil, demonstrating that use oil~emoval is not a cost iEem
twat should be included in amount. CMC stated that no chlorinated
solvents are being used at the mine or the mill, and that used oil management
is such that the fluid is non-hazardous. CMC further stated that pine oil and
vapor oil would be removed at zero cost by a used oil contractor. In
addition, CMC will provide updated water treatment cost information based on
the operation of the IIrad Plant. These costs will be based on slaked lime
treatment technology and will be more receszt and more applicable than the unit
costs empioyed in the DMG cost estimate. There was a discussion about the
need to bond for removal of reagent$ still contained in original packaging_
CMC stated that their supplier of phosphorus pentasulfide {Soiutia Inc.), far
example, would reerieve unopene containers fpr a sma 1 restocking charge. It
h s b~Eexi-the DMG's experience that there are substantial costs associated with
removal of reagents from a site, even i£ the packaging is intact. However,
if CMC provides documentation that puryEyors will retrieve__the_ unused
Ch cats, DMG will take_the information into consideration- CMC is also
reviewing the DMG earthworks cost estimates and may or may not suggest changes
to the equipment selections or other a88umQCioriB d.riput to the estimating
worksheets. Finally, CMC peinted out that the unit cost for hydroseediag in
the DMG estimate was higher for seeding the conveyor alignment area than the
cost used to estimate seeding over the rest of the site. DMG will adjust the
estimate to employ the lower unit coat consistently on all of the estimating
worksheets.
In other matters relating to assumptions used in the AMG estimate, CMC
proposes to provide enforceable permit commitments limiting the storage of
certain chemicals and other substances to smaller volumes than those maximum
capacity storage volumes listed in the SPCC Plan. CMC is not ~+++-+-A~tly using