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COLOWYO COAL COMPANY, L.P. <br />BONDING COST ESTIMATE <br />1.0 INTRODUCTION <br />In compliance with Rule 3.0 of the Regulations of the Colorado Mined Land Reclamation <br />Board for Coal Mining, Colowyo Coal Company, LLC (Colowyo) hereby submits this estimate of <br />the costs associated reclamation of the maximum disturbance configuration for the Colowyo Mine <br />for the next five-year permit term. The total estimated reclamation cost is $17,618,555. This is <br />the estimated cost, for bonding purposes, the Colorado Division of Minerals and Geology (DMG) <br />would incur, through standard Colorado contracting procedures, to implement the approved <br />reclamation plan in the unlikely event that Colowyo were unable to fulfill reclamation obligations <br />under its approved Permit during the next five-year permit term. The methods, assumptions, and <br />detailed calculations utilized in developing this bonding cost estimate are described in the <br />following sections. <br />Colowyo's existing operations and proposed mine plans include four separate disturbance <br />areas, the East Pit area, the West Pit azea, the Section 16 area and the Facilities area. The bond <br />cost estimate is formatted to provide sepazate costs for the four areas outlined above. This format <br />is designed to facilitate bond release as these areas are reclaimed. <br />2.0 METHODOLOGIES AND ASSUMPTIONS--GENERAL APPROACH <br />The bonding cost estimate reflects all costs associated with reclamation of the planned <br />mining and related disturbance for the Colowyo Mine for the next five (5) yeaz permit term as <br />well as remaining liabilities for previous disturbance. <br />In order to accurately reflect the anticipated reclamation costs for a maximum disturbance <br />scenario during the next permit term, Colowyo evaluated several factors, which could impact <br />reclamation costs: <br />Revision Date: 10/21/03 <br />Revision No. TR-56 <br />