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STATE OF COLORADO <br />DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherrnan St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3567 <br />FAX: (303) 832-8106 <br />-(3/overnber 27, 2007 <br />J. Scott Hazlit <br />Aeadville Mining & Milling <br />PO BOX 552 <br />Leadville, CO 80461 <br />eSCdi,Me'tS <br />RE: Hopemore Shaft; Permit No. M-1990-057 <br />Leadville Mining and Milling; Financial Warranty Increase (SI-03) <br />Dear Mr. Hazlit, <br />COLORADO <br />D IV IS I ON OF <br />RECLAMATION <br />MINING <br />SAFETY <br />Bill Ritter, Jr. <br />Governor <br />Harris D. Sherman <br />Executive Director <br />Ronald W. Cattany <br />Division Director <br />Natural Resource Trustee <br />On August 8, 2007, the Division of Reclamation, Mining and Safety conducted inspections of the Hopemore Shaft <br />and Mill Site, Permit No. M-1990-057. The Division is required to hold a financial warranty to ensure the <br />reclamation plan can be achieved. If Gallenstein & Associates, Inc. does not have the appropriate water rights in <br />place, the reclamation plan cannot be achieved and an alternate reclamation plan is required. Without such plans, <br />the Division is required to adjust the financial warranty to backfill the gravel pit two feet above the maximum <br />ground water elevation. <br />According to Rule 4.2.1(1) and (2), the Division may review a financial warranty at any time to determine if the <br />amount is sufficient to perform reclamation. The Division recalculated the bond to factor in 2007 equipment and <br />labor rates and reclaim the site to achieve the approved postmining land use. The result of the recalculation <br />indicates that the site is currently under bonded. This letter is to inform you that your financial warranty will need <br />to be revised from its current amount of $35,550.00 to $81,700.00 within 60 days of receipt of this letter. To break <br />it down further, the cost to reclaim the Hopemore Shaft site is approximately $30,000.00 and the Mill site is <br />approximately $51,700.00. A copy of calculations used to determine this cost is attached for your review. The <br />operator has three options regarding the amount of required bond; <br />1. submit additional financial warranty in the amount of $46,150.00, <br />2. perform some reclamation on the site to reduce the reclamation liability, or <br />3. revise the reclamation plan. <br />One of the three options, or a combination thereof, must be completed by February 1, 2008. Failure to do so may <br />be considered a violation of the Hard Rock Rules and Regulations. If you have any questions about this process or <br />how the bond was calculated, please contact me at (303) 8664943. <br />fW , <br />Erica S. Environmental Protection Spe alist <br />cc: Carl Mount; DRMS <br />Elizabeth Taliaferro; DRMS <br />Bob Calder; Lockland LLC w/enclosure <br />Enclosure(s); DRMS Reclamation Cost Estimate <br />Certified Mail # 7003 1680 0000 6429 6053 <br />Office of Office of <br />Mined Land Reclamation Denver • Grand Junction • Durango A,fl- and 1-fl- XA;-