2009-11-17_REVISION - C1996083

• Permit No: C1996083
• IBM Index Class Name: REVISION
• Doc Date: 11/17/2009
• Doc Name: 2009 Midterm Cost Estimate Letter
• From: DRMS
• To: Bowie Resources, LLC
• Type & Sequence: MT3
• Email Name: JJD
• Media Type: D
• Archive: No

STATE OF COLORADO
DIVISION OF RECLAMATION, MINING AND SAFETY
Department of Natural Resources
1313 She St., Room 215
Denver, Colorado 80203
Phone: [phone]
FAX: [phone]
November 17, 2009
Mr. William A. Bear
Bowie Resources LLC
P.O. Box 483
Paonia, Colorado 81428
RE: Bowie No. 2 Mine, Permit No. C -1996 -083, Bowie Resources LLC
2009 Midterm Permit Review, Reclamation Cost Estimate
Dear Mr. Bear:
COLORADO
D IV IS I ON OF
RECLAMATION
MINING
SAFETY
Bill Ritter, Jr.
Governor
Harris D. Sherman
Executive Director
Ronald W. Cattany
Division Director
Natural Resource Trustee
Enclosed is the Division's 2009 Midterm Permit Review reclamation cost estimate for the Bowie
No. 2 Mine. The estimate consists of 134 tasks (a summary sheet and tasks OOa -184) and
represents a new liability of $9,018,403.00. This new liability is $229,748.00 more than the
current liability of $8,788,655.00 and $207,133.00 more than the current bond held by the
Division of $8,811,270.00. Based on the 2009 Midterm Review, Bowie Resources will have to
submit an additional bond of $207,133.00.
The calculation of the new liability was an update of costs from previously completed estimates
!that have been approved since Permit Renewal No. 2. This estimate does not include any possible
costs from Technical Revision No. 64, which is still in the review process.
'The reason for the increase in liability is a general increase in costs over the past few years.
These cost increases include equipment costs, mine and borehole sealing costs, seed and
reseeding costs and demolition costs (although these increases were mostly offset by comparable
,decreases). Equipment costs, in general, have increased, leading to the current increase in
'liability.
'The Division did change the size of the dozer used for many of the reclamation tasks at the site
from a D9R to a larger DIOR, which made the net liability increase less than it would have been
;had the Division not switched the dozer size. This change made sense based on the size of the job
,(over 5,200 net dozer hours) and the availability of DI OR dozers. Although the hourly cost for a
D l OR dozer is more than that of a D9R dozer, the increase in hourly production offsets some of
the cost increases. In other words, updating the costs for tasks using the D9R dozer would have
;increased the liability even more. The following chart illustrates this point:
Office of Office of
Mined Land Reclamation Denver • Grand Junction • Durango Active and Inactive Mines