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associated haulroads, sediment control measures, topsoil stockpiles, and other ancillary
<br />disturbances required to support these activities. Mining in the Wildhorse area of the
<br />East Cresson will be completed and backfilling portions of the Wildhorse will be initiated
<br />in 2009. Backfilling in the East Cresson will continue in 2009. Construction activities
<br />associated with Amendment 9 projects have been initiated and will continue throughout
<br />2009.
<br />Reclamation anticipated during the upcoming year: Approximately 10 to 20 acres
<br />of miscellaneous sites consisting of topsoil stockpiles, sediment ponds, and exploration
<br />disturbances are planned to be reclaimed this year.
<br />Financial Warranty:
<br />CC&V and DBMS have agreed to post the additional warranty, in the amount of
<br />$54,280,734 in phases and consistent with CRS 34-32-117(4)(b)(1). The first phase,
<br />which is the construction phase in the amount of $36,594,665, will be posted with in 60
<br />days or by February 4, 2009. The second phase in the amount of $17,686,069 will be
<br />posted once the Phase V valley leach facility is constructed and certified and prior to
<br />loading ore, in the year 2011. With the additional warranty, the revised estimated
<br />liability amount equals $98,994,665.
<br />Per 2CCR 407-1, 407-4, and Rules 1.15(1)(a), Financial Warranty/Letter of Credit No.
<br />1625-04 from the Dresdner Bank AG, New York Branch, in the amount of
<br />$33,331,600.00 replaced the St. Paul Fire and Marine Surety Bond No. JZ7711 for the
<br />same amount. The new financial warranty was sent to DRMS on July 16, 2004 and the
<br />St Paul Fire and Marine bond was released on July 21, 2004.
<br />An additional letter of credit (Letter of Credit No. 91111/80085) effective Sept 15, 2004
<br />from Scotiabank in the amount of $3,400,000 was accepted by DRMS on October 19,
<br />2004. On March 15, 2007 DRMS accepted the submittal of a rider to the Scotiabank
<br />Irrevocable Letter of Credit in the amount of $100,000, bringing the total amount to
<br />$3,500,000. On September 18, 2007, DRMS accepted the submittal of the amendment
<br />to the Scotiabank Irrevocable Letter of Credit No. 91111/80085, to increase the amount
<br />to $3,700,000 for the Cresson Project. On December 23, 2009, DRMS accepted the
<br />submittal of the rider to the Scotiabank Irrevocable Letter of Credit No. 91111/80085, to
<br />increase the amount to $40,700,000 for the Cresson Project.
<br />In addition, Liberty Mutual Surety Bond No. 22013294 was increased to $7,922,271.21
<br />on April 30, 2004. These financial instruments, providing a total financial warranty of
<br />$81,953,871.21, have been accepted by the Division and continue to demonstrate the
<br />sufficiency of the value of the Cresson Project Financial Warranty.
<br />Per 2CCR 407-1, 407-4, and Rules 4.7(3), the insurance company's most recently
<br />available balance sheets are attached, demonstrating that the Surety Bonds do not
<br />exceed ten percent (10%) of the bank's capital surplus accounts.
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