2008-12-12_INSPECTION - M1980244

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Memo to Berhan Keffelew 3 December 12, 2008 11/20/08 Meeting and Inspection Permit No. M-1980-244 minimum, rock scaling. It has been the Division's direct experience that bond forfeiture situations can develop rapidly and site abandonment can occur with little or no planning or execution of an orderly withdrawal. Therefore, it is the Division's practice, and a universally accepted reclamation bonding tenet, that actions to be taken through an orderly withdrawal are not considered. It was discussed in the November 20, 2008 meeting that specialized blasting may not be the optimum method to reclaim any production blasted faces that may be present in a bond forfeiture situation. CC&V suggested that a better method would be to shoot the un-stabilized faces to create enough rubble to allow grading to a 3H:1 V slope. Such a plan can be included in the forthcoming permit modification. CC&V's position is well taken that the money dedicated through the bond for heap detoxification, even if the heap is only a few million tons shy of being fully loaded, will greatly exceed any money that may be needed for pit wall stabilization in a bond forfeiture situation. However, the Mined Land Reclamation Act provides, as it states in §34- 32-117(4)(b)(I), that: In any single year during the life of a permit, the amount of required financial warranties shall not exceed the estimated cost of fully reclaiming all lands to be affected in said year, plus all lands affected in previous permit years and not yet fully reclaimed. It is understood, as it is stated in the October 3, 2008 adequacy response letter, that CC&V intends to "deliver full financial warranty for closure of the 110 million tons of ore to be placed upon the Phase 5 VLF at the time of Phase 5 liner certification." This provision of bond that tracks out further than the one year required by law is a voluntary action on the part of CC&V. However, plans could change during the interim, and CC&V may chose to take advantage of a more stepwise approach to bonding, as allowed in the statute. If so, it would be imperative to have each line item reclamation cost documented in the permit file so that the correct amounts of phased bond dollars will be required for any time-stepped bonding process that might be approved. This is not just the case for the bonding of the Cresson Project as it relates to pit wall stabilization as discussed in this memo, but it is an overarching and universal procedure inherent to reclamation bonding in general. The simple resolution to this matter is to include in the forthcoming permit modification an estimate of the costs, for Division review, to stabilize pit walls relative to the enforceable maximum extent of production blasted face discussed previously. Once this cost is documented, the Division is amenable to considering a mine plan timing justification, clearly spelled out in the forthcoming modification, that at all points in the life of the mine there will be enough excess bond in place for heap detoxification to adequately reclaim all production blasted pit walls. The other, and more straightforward option, is to provide the amount of bond needed for pit wall stabilization rather than relying on the ability to redirect excess bond dedicated to a different task. Included with this memo are photographs taken during the November 20, 2008 open pit inspection with captions that describe the observations that were made. cc: Tony Waldron, DRMS Peter Hack, AGO cAacs files\My Documents 4-19-06 thru\cresson insp 11-20-08.doc