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Interoffice Memorandum <br />To: Zach Trujillo <br />From: Jason Musick <br />Subject: C- 1981 -018, Deserado Mine, 2012 Midterm Review Cost Estimate and Midterm Adequacy Questions <br />Date: 4/23/2012 <br />Below is information pertaining to the 2012 Midterm Review for Permit C- 1981 -018. <br />SECTION VI — Bonding <br />A compiled reclamation cost estimate was developed by the Division as a part of the Permit Renewal No. 5 process on <br />February 6, 2009. The Division's reclamation costs have been updated since that date. A summary of those costs in <br />addition to any revision adjustments has been completed for this 2012 Midterm Review. As of April 13, 2012, the <br />Division estimates liability at the Deserado Mine is $5,424,329.88. This amount is sufficient to assure completion of the <br />remaining reclamation work at the site if the work had to be performed by the Division, including the cost of re- <br />establishing vegetation on any revegetated areas, should those areas fail. The permittee currently has on deposit with <br />the Division one Travelers Casualty and Surety Company of America bond in the amount of $5,703,525.00. <br />Based on the updated costs of associated revisions the direct costs for all reclamation tasks is $4,318,351.29. This is less <br />that the direct costs of $4,466,817.00, calculated for Permit Renewal No. 5. Indirect costs consist of the Overhead and <br />Profit costs and the Legal, Engineering, and Project Management costs. Overhead and Profit costs consist of Liability <br />Insurance (% of direct cost), Performance Bond (% of direct cost), Job Superintendent (hourly), and Profit (% of direct <br />cost) which make up the Contract Amount (direct cost + Overhead and Profit). The Legal, Engineering, and Project <br />Management Costs consist of Engineering Work (% of contract amount), and Reclamation Management (% of contract <br />amount) for a Total Indirect Cost. Based on the updated costs for all reclamation tasks, the indirect costs for the 2012 <br />Midterm Review is $1,105,978.59. This is less than the indirect costs of $1,160,934.00, calculated for Permit Renewal <br />No. 5. <br />Midterm Adequacy Review Questions <br />- Per Rules 2.04.11(4) and 2.05.6(2), please update T &E species and discuss potential impacts to current State and <br />Federal Threatened and Endangered plant and animal species lists. The Federal and State listed species of concern may <br />have changed since the last Permit Renewal No. 5. <br />- Table V -2, page V -6 lists Map 156 as the location for the detail of the B -Seam Dewatering System. It appears that the <br />actual approved detail for the B -Seam Dewatering System is labeled as Map 157. Please update page V -6 to reflect the <br />correct Map and detail number. <br />- Attached is the reclamation cost estimate for the 2012 Deserado Mine Midterm Review. The Division updated the <br />reclamation cost estimate with 2011 costs. This updated estimate total is $5,424,329.88. This estimate includes <br />reclamation tasks identified in the permit and includes costs for Minor Revisions 140 through 146 and 148; and <br />Technical Revisions 67 and 68, the only revisions that have included an increase in liability since the estimate was last <br />updated with the 2009 Permit Renewal (06 February 2009). This 2012 Midterm Review revised cost estimate is <br />