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,r\ (p <br />J. E. STOVER & ASSOCIATES, INC. <br />2352 NORTH 7`n SREET, UNIT B <br />GRAND JUNCTION, COLORADO 81501 <br />PHONE: (970) 245-4101, FAX 242-7908 <br />MINE ENGINEERING <br />MINE RECLAMATION <br />CIVIL ENGINEERING <br />CONST. MANAGEMENT <br />July 30, 2010 <br />Mike Boulay <br />Division of Reclamation, Mining & Safety <br />101 South Td, Suite 301 <br />Grand Junction, CO 81501 <br />REC WED <br />AUG 02 - <br />Division of Recian nVon, <br />Mining and SaWY <br />Re: Snowcap Coal Company, Inc. <br />Midterm Permit Review <br />Updated Reclamation Cost Estimate <br />Permit No. C-81-041 <br />Dear Mr. Boulay: <br />The DRMS' letter dated July 15, 2010 transmitted its findings in regard to the midterm <br />review of Snowcap Coal Company's Permit No. C-81-041. Following are Snowcap's <br />responses to DRMS' comments: <br />1. DRMS: Section VI - Bonding Summary: The Division holds an approved <br />bond on behalf of the permittee for the Roadside Portals Mine. The bond is a Corporate <br />Surety from Liberty Mutual Insurance Company, Bond No. 014-018-026, in the amount <br />of $1,640,413.00. Pursuant to Rule 3.02.2(4), the Division has reviewed the Roadside <br />Portals Mine reclamation liability, in association with this midterm permit review. We <br />have prepared an updated cost estimate (enclosed as Attachment 1). The new liability <br />is $1,722,908.00. This new liability is $82,495.00 more than the current liability of <br />$1,640,413.00. The reason for this increase is general cost increase since the estimate <br />was last updated with Permit Renewal No. 5 (completed on September 14, 2007). <br />Snowcap Coal Company will need to submit an additional $82,495.00 in bond monies. <br />SCC: Snowcap Coal Company is hereby requesting that the submittal of <br />additional bond monies as requested by DRMS be postponed until final decision has <br />been issued on Snowcap's pending bond release application SL-6. <br />As noted on page 4 of DRMS's Midterm Permit Review for Roadside North and South <br />Portals Mine, Snowcap has two bond release applications pending. The two <br />applications are for the South Portal (SL-6) and the Unit Train Loadout (SL-7). We are <br />not requesting a postponement based on final decision of SL-7, because we realize <br />approval of this application may not be until December 2010. However, the inspection <br />was completed for SL-6 on July 27, 2010, and barring any complications, the release of <br />approximately $67,420 associated with SL-6 could be approved within 45 to 60 days. <br />Upon this approval Snowcap would notify their bonding company and request a bond <br />rider based on the recalculated bond from the midterm review less the dollars released <br />from SL-6.