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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 />COLORADO <br />D I V I S ION OF <br />RECLAMATION <br />MINING <br />SAFETY <br /> <br />INTEROFFICE Bill Ritter, Jr. <br /> <br />Governor <br />MEMORANDUM Mike King <br />Executive Director <br /> <br />TO: Kent Gorham Loretta E. Pineda <br />Director <br />FROM: Jim Stark <br />SUBJECT: New Elk Mine PR-03 Cost Estimate - Revised <br />DATE: 17 December 2010 <br />Based on our discussion of the New Elk Mine's Permit Revision 03, I have revised the <br />reclamation cost estimate to remove the facilities proposed as permanent on page 8 of <br />Exhibit 37. These facilities include the rail spur, the retaining wall and wind screen, the <br />Jansen railroad building (a preexisting structure) and the perimeter berms and sediment <br />sumps. <br />The attached pages are the revised summary sheet and demolition sheet (task 201). The <br />revised reclamation cost estimate for the New Elk Mine's Permit Revision 03 represents <br />an increase in liability of $157,636.00. This estimate is $42,921.00 more than the <br />estimate submitted by NECC (of $114,715.00). <br />One of the main reasons for the difference is that NECC allows for salvage of the <br />conveyor and only estimates a cost of $3,000.00 for its removal. The Division's <br />unadjusted direct cost for the removal of the conveyor is $67,924.00. NECC also <br />overestimates the indirect costs at 40% of the direct costs (the "normal" amount is around <br />25%). <br />Please let me know if you have any questions regarding this estimate or need any <br />additional information. <br />cc: Sandy Brown w/out Attachments <br />Dan Hernandez w/out attachments <br />Office of Office of <br />Mined Land Reclamation Denver • Grand junction • Durango Active and Inactive Mines