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Memo to Berhan Keffelew 2 December 12, 2008 <br />11/20/08 Meeting and Inspection Permit No. M-1980-244 <br />the approval of amendment AM-09. During the review of the amendment AM-09 application CC&V argued that <br />any costs for pit wall stabilization in a bond forfeiture at any point in the life of the mine would be far exceeded by <br />the amount of excess bond money that would be available due to the ore heap not being fully loaded and the bond <br />for heap detoxification being predicated on total estimated pore volume of the heap. This argument is logical and <br />is founded on what is currently anticipated to be the future bonding, open pit mining, and ore heap loading <br />circumstances. However, in order to dedicate unused bond money available for a less than fully loaded heap to <br />reclaim production blasted pit walls, there must be enforceable commitments added to the permit through a <br />modification (technical revision or amendment) and the dollar amounts must be clearly accounted in the permit <br />file. <br />The CC&V AM-09 adequacy response letter dated October 3, 2008 states: <br />In the event that production ceases prematurely the final walls excavated to that point will be complete and <br />stable. Any other walls existing at such a time will be production faces on the floor of the operating mine <br />no higher than a single lift 35 feet high and located at least one blast pattern away from the toe of the final <br />slope excavated at that time. <br />In fact, it was discussed in the November 20, 2008 meeting and observed during the inspection of the open pits, <br />that CC&V routinely operates two production levels simultaneously. CC&V stated during the meeting that it <br />would be impractical to operate on more than two levels simultaneously, but there is no prohibition contained in <br />the permit on the extent to which production blasted faces can be operated at the same time. The simple resolution <br />to this matter that was reached during the meeting is that CC&V will provide an enforceable commitment in the <br />forthcoming permit modification to limit production blasted faces at any point in the life of the mine to a defined <br />numeric, e.g. square footage, extent. <br />CC&V has stated, both in the November 20, 2008 meeting and in other discussions, that the open pit backfilling <br />depicted on drawings C5 and C6 of AM-09 is a required element of the reclamation plan. CC&V has made the <br />logical argument that the full planned extent of open pit mining cannot be accomplished without backfilling of <br />played out portions of open pits, due to the limited amount of storage available in the designated overburden <br />storage areas. However, in order for an element of the reclamation plan to be considered in making decisions on <br />the amount of required bond, it must be more than logical, it must be enforceable. It is stated in section 5.7.4 of the <br />project description contained in volume l of AM-09: <br />Backfilling is shown conceptually on Drawings C4, C5, and C6. Note that the amount of Backfilling which <br />will occur in a particular mine area is dependent on potentially changing conditions such as project <br />economics and may vary from that shown on Drawing C5. Drawing C5 is intended to represent the best <br />estimate of backfill scheduling for the MLE (emphasis added). <br />This statement provides essentially unlimited flexibility to implement the pit backfilling operations. This level of <br />flexibility is appropriate and has been approved, but it does not allow for the consideration of backfilling <br />production blasted face for stabilization as it relates to the amount of required bond. Again, an enforceable <br />limitation on extent of production blasted faces resolves this issue. <br />In the November 20, 2008 meeting CC&V indicated that in no case would they leave the open pits, even in a bond <br />forfeiture situation, without first removing any blasted ore and then stabilizing the production blasted walls by, at a