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STATE OF COLORADO <br />DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3567 <br />FAX: (303) 832-8106 <br />September 2, 2009 <br />To: Dan Mathews <br />From: Susan Burgmaier <br />Re: Seneca II Mine (C-1980-005) <br />SL04 Phase I Bond Release Request <br />Reclamation Cost Estimate <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 />I have completed a revised cost estimate for remaining reclamation liability following our <br />proposed SL04 Phase I Bond Release at the Seneca II Mine. The new estimated cost for <br />reclamation of the permanent program areas is $3,973,637.00. Estimated costs for the pre-law <br />areas remain unchanged at $285,484.00, so the total required performance bond for the site will <br />now be $4,259,121.00. We will be releasing $77,028. My cost estimate is attached. <br />The release amount is considerably less than that requested by Seneca Coal Company. There <br />were increases in the estimated costs of remaining reclamation liability, mainly due to rising <br />labor, equipment, and materials costs which reduced the allowable release amount. A brief <br />summary of those changes follows, and I have attached a table comparing the requested bond <br />release amount to our proposed release amount. <br />Worksheet 00b: Estimated costs for reclaiming the remaining Wadge area access road have <br />been deleted with the Phase I release. <br />Worksheet 00c: Costs for reclaiming the wells increased slightly due to higher equipment <br />operating costs. Costs for reclaiming the truck wash ponds decreased as a result of equipment <br />selection. Costs for reclaiming the ditches were deleted with the Phase I release. <br />Worksheet 00d: The cost of reclaiming the landfill has been deleted with the Phase I release. <br />Worksheet 00e: The total cost of constructing postmine drainages has been deleted with the <br />Phase I release. <br />Worksheet 00f: The cost of facilities area reclamation decreased slightly due to a decrease in <br />the city cost index adjustment. <br />Office of Office of <br />Mined Land Reclamation Denver - Grand Junction - Durango Active and Inactive Mines