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During the fall of 1992, the Division conducted a reclamation Lability evaluation estimated to be <br />$60,734. The increase in the liability was due to including the disposal costs of the bone yard <br />where excess equipment, scrap and trash were stored. The operator was notified that there was <br />insufficient bond and that the difference between the bond and the reclamation Lability would have <br />to be paid. The Division gave the operator a copy of the bond calculations and indicated that if <br />scrap and equipment were removed, the reclamation Lability estimate would be adjusted to reflect <br />this. <br />The Division, in early 1993, started the surety increase (SI-Ol) procedure as required in Rule <br />3.02.2. This rule requires that the amount of the performance bond shall be adjusted for good <br />cause when the cost of future reclamation changes. The operator requested an informal public <br />hearing that was held in Gunnison on June 29, 1993. Prior to the informal hearing the operator <br />removed fuel and drums containing oil products that resulted in the reduction of the liability to <br />$46,482. <br />The reclamation liability was not reduced sufficiently and subsequently, a formal public hearing <br />before the Ivfined Land Reclamation Board was held. At this hearing the Division proposed the <br />bond increase. The Board agreed to give the operator additional time to reduce the Lability. This <br />was extended several times. During the summer of 1994 the operator sold much of the equipment <br />as scrap. On September 30, 1994 the Division performed an inspection for structure inventory <br />and reclamation Lability at the mine. This information was used in the recalculation of the <br />reclamation Lability completed November 8, 1994. The current bond of $36,000 was judged <br />sufficient to cover the reclamation Lability of $34,864. These estimates are attached to this <br />mid-term. <br />When the O.C. No. 2 mine is bacldilled, graded, topsoiled and seeded, this will begin the 10 year <br />reclamation bond Lability period. <br />O.C. Mme, Nfidterm Review 5 February 9, 1995 <br />