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07/11/2005 08:06 FAX Q005 <br />agreed to between the Division and the Operator, the Division ciarently estimates it to be <br />approximately $30,000,000.00. <br />3. To satisfy the increased bonding requirement in part, the Operator has offered three <br />unrecorded deeds of trust ("Deeds of Trntst'l to the Division appraised at a combined total <br />of 511,265,000.00. Copies of the Deeds of Trust for the Henderson Mine and Mill's <br />incidental water rights, the Skylark water rights and the Williams Fork pump station, <br />respectively, are attached hereto as Exhibits ,A., B and C, respectively. The attached <br />Exhibits contain more detailed descriptions of the offered properties. Hard hock Rule <br />4.9.1 (1) states that a maximum of eighty five percent (85 %) of pledged property may be <br />credited toward the required bond. In addition, the overall value of the deeds of trust should <br />be discounted an additional ten percent for expected real estate commissions, legal fees and <br />engineering costs. Subtracted from that subtotal is approximately one year's worth of <br />operating, maintenance and replacement costs valued at $21,500.00. The total value to be <br />credited toward the Operator's reclamation bond obligation is therefore $8,596,169.00. <br />4. As part of the Division's conditions for considering whether to accept the Deeds of Trust, <br />the Division sought the opinion of independent analysts to assess the value of the properties <br />and to confirm title thereto. The Operator agreed to pay for the cost of the independent <br />valuations. With the concurrence of the Division, the Operator hired an independent <br />engineer, Tom Williamson of Helton and Williamson Water Consulting Engineers, and an <br />independent attorney, Linda Satterfield, Esq., to respond to specific questions concerning <br />the value and ownership of the offered properties. <br />5. Mr- I Williamson reviewed an appraisal of the properties prepared by Wheeler and Associates <br />for the Operator and reached the independent conclusion that the appraised values of the <br />