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4. The Division mailed the inspection report to the Operator on December 17, <br />2009. The inspection report included a Notice to Increase the Financial Warranty stating: <br />Pursuant to Rule 4.2.1(1), the Division has reviewed the current cost of <br />reclamation totaling $148,329. Enclosed please find 24 pages of <br />summary, worksheets and data sheets utilized by the Division to <br />estimate the current cost of reclamation. Therefore, the existing <br />$38,209 financial warranty appears insufficient to ensure the <br />completion of reclamation. Pursuant to Rule 4.2.1(2), the Operator has <br />60 days from the signature date of this inspection report, by February <br />15, 2010, to increase the financial warranty to total not less than <br />$148,329. <br />5. On February 5, 2010, the Operator, through counsel notified the Division that <br />it disagreed with the December 17, 2009 Notice to Increase the Financial Warranty and <br />requested a hearing before the Board. The Operator, through R Squared Inc., submitted its <br />own bond estimate of $25,000. The Operator's much lower estimate is due in part to the <br />assumption that the processing and mill equipment would be buried on-site within the portal <br />at Level 1 and that the solid materials debris would also be buried within the closed mine. <br />6. At the February 23, 2010 hearing, the Division's inspector, Mr. Erickson, <br />testified. The Division's CIRCES Cost Estimating Software, Cost Summary Form, lists the <br />direct costs of tasks and also computes the indirect costs associated with the tasks. Task <br />001's direct cost is $25,510, to demolish and remove mine related structures. Task number <br />001(a)'s direct cost is $65,390, for "dump fees at landfill for items removed under Task <br />001." Mr. Erickson testified that it is a 30-mile haul from the site to the dump. These two <br />items and their associated indirect costs account for most of the difference between the <br />Division's and the Operator's reclamation cost estimates. <br />7. The Operator, through counsel requested the Board to consider that the <br />Operator intends to complete the permit amendment process for this site and intends to mine <br />the property. The Operator's counsel questioned Mr. Erickson regarding the disposing of the <br />milling facility equipment inside the May Day Mine, after operations ceased. The on-site <br />disposal of the equipment and structures can be considered during the permit approval or <br />amendment process, which includes consideration of a number of factors, including the <br />environmental impacts of on-site disposal. <br />8. The Operator constructed the mill at Level 1 without first submitting plans or <br />getting approval from the Division and is therefore in violation of the law for doing so. The <br />newly constructed unpermitted mill facility at Level 1 is not part of the site's current <br />reclamation permit. The Operator is in the process of submitting a new permit application <br />that includes the mill facility. The Division has not approved the site's new permit <br />application. The Division, as of the date of the hearing on this matter, has not considered the <br />site's new permit application filed because of filing inadequacies. <br />9. At the February 23 hearing, the Operator's Counsel introduced a letter from <br />Fairview Land Company, dated February 22, 2010 and signed by David Tippet, stating that <br />Wildcat Mining Corp., May Day Mine <br />Approval of Division's Notice of Financial Warranty Increase 2 <br />M-1981-185