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energy fuels coal, inc. <br />southfield mine • post office box 459 - florence, colorado 81226 • (719) 784-6395 <br />January 19, 2011 <br />Mr. Rob Zuber, P.E. <br />Environmental Protection Specialist <br />1313 Sherman St - Room 215 <br />Denver, CO 80203 <br />.'?Ecr-J V E® <br />.IAN 2 4 2011 <br />Mining and Safety <br />t, . <br />RE: KERR (Marr) MINE - Permit Renewal No.6 (RN-06) - PERMIT NO. C-80-006 <br />Response to DRMS' Preliminary Adequacy Review <br />Bond Amount Estimate <br />Dear Rob Zuber: <br />This letter is the third response to the Division's Preliminary Adequacy Review <br />letter concerning Kerr's Permit Renewal Request No.6 (RN-06). This response <br />addresses the Division's estimated bond amount projected for remaining reclamation <br />liability at the Kerr mine and Loadout site. <br />Kerr is enclosing a copy of a current cost quotation from the general contractor, <br />Glenn Sessions & Sons based in Walden, Colorado, to perform potential reclamation <br />work if it becomes necessary. Sessions and Sons are experienced reclamation <br />contractors specializing in oil/gas field and mine reclamation in Colorado and other <br />states. They have performed numerous reclamation tasks at the Kerr mine and Loadout <br />throughout the Kerr mine's life of 36 years which includes reclamation of the former <br />Ponds C and G at the mine site. <br />We understand that the Division uses commercial cost guides for calculating <br />potential reclamation tasks and projection of the respective bond amount. Kerr submits <br />the enclosed contractor's cost quote and the quote for the approved grass seed mix to <br />demonstrate that the "cost guides" typically have a wide buffer added to their cost . <br />projections. Comparing only the actual tasks for the remaining 14 acre potential area <br />(leaving mob/demob & Indirect costs unchanged), the contractors cost is $9,380.00 <br />(36.8%) less than the Division's estimate. <br />Further, concerning the Task of 'mulching' used in the Division's estimate, Kerr <br />believes that mulching over previously seeded ground, in the unlikely event that it is <br />necessary, would not be needed given that the existing vegetation serves as mulch. <br />Eliminating this one task from the Division's Cost Estimate list reduces the estimate by <br />$3,282.44 (for 14 acres) which more than covers the $208.00 difference projected for <br />RN-06. The exception of course, would be the footprint of the pond at the Loadout <br />following the backfilling of the pond. Kerr would include mulching the pond footprint <br />after seeding albeit one acre or less in size. <br />