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6.4.12 EXHIBIT L -Reclamation Costs <br />The basis for calculating the financial warranty is to provide the State of Colorado an <br />adequate amount of capital to reclaim the site in its worst case disturbance in the event <br />that there is a pennit revocation and bond forfeiture. This amount includes the actual cost <br />to complete the on the ground work and could include up to an additional %23.5 to cover <br />overhead and administrative fees. <br />The reclamation costs that were submitted with the application do not take into account <br />the costs associated with backfilling the pits once mining is completed. They also do not <br />take into account the cost of importing material to make up for the projected shortfall of <br />1.2 million tons associated with this backfilling. The cost of importing the projected <br />shortfall alone could easily run into the millions of dollars. <br />The reclamation costs will need to be re-calculated incorporating all of the tasks <br />associated with reclaiming the site. These should include, backfilling and grading, <br />replacing topsoil, revegetation (including initial seeding and re-seeding in the event of a <br />total failure), weed control, etc. The division suggests utilizing a phased bonding <br />approach to help contain costs. This would entail the full cost associated with reclaiming <br />a single phase once mining has been completed in that phase, along with re-grading, <br />replacing topsoil and seeding the phase that is being opened up. Since mining will not <br />have occurred in the new phase at that point, backfilling would not be a necessary cost at <br />that point. Utilizing this phased approach allows the operator to carry only the amount of <br />bond necessary to reclaim the site at any given point in time. For instance, in this way, <br />the operator will not be required to post the entire financial warranty associated with <br />importing the projected material shortfall necessary to backfill the entire site, but just 1/5 <br />of the total amount, or approximately 250,000 tons. So long as the site is being <br />contemporaneously reclaimed, the financial warranty should simply "float" with the <br />disturbance and remain relatively constant. <br />Please revise this section as necessary. <br />6.4.13 EXHIBIT M -Other Permits and Licenses <br />It is the operator's responsibility to obtain all necessary permits, licenses, and approvals <br />prior to initiating mining. The division's decision concerning approval or denial of an <br />application is not predicated on obtaining these items. However, two of these items are <br />pertinent to our review of this application. The first is the CDPS dischazge permit simply <br />because we would like to know where the proposed discharge is located. This helps us to <br />better evaluate potential off-site impacts. <br />The second item is the State Engineer's approval for a temporary well permit and the <br />Substitute Supply Plan. If the applicant does not have approval for the SSP prior to our <br />decision date, the plan will have to be bonded for backfilling so as to prevent <br />