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999 <br /> STATE OF COLORADO <br /> DIVISION OF MINERALS AND GEOLOGY <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 /> DEPARTMENT OF <br /> NATURAL <br /> August 9, 1996 RESOURCES <br /> Roy Romer <br /> Governor <br /> Mr. Larry Per ino James S.Lochhead <br /> Sunnyside Gold Corp. Executive Director <br /> P.O. Box 177 <br /> Michael B.Long <br /> S i lverton, CO 81433 Division Director <br /> RE: Financial Warranty for Bulkhead Replacement, Sunnyside <br /> Mine, Technical Revision TR-01 , Permit No. M-77-378 <br /> Dear Mr. Perino: <br /> In order to satisfy Commitment 13 to the approval of Technical Revision <br /> TR-014, Sunnyside Gold Corporation (SGC) has provided a Letter of Credit <br /> in the amount of $500, 000. 00. This dollar amount was determined based on <br /> the SGC estimate of discounted direct costs plus $115, 000. 00 to cover <br /> indirect costs as detailed in your letter and attachments dated July 1, <br /> 1996. It is the Division's position that most of the discounts detailed <br /> in your letter would not be realized in the event that the Division had <br /> to replace the bulkheads under a bond forfeiture (see memorandum prepared <br /> by Tom Gillis dated July 11, 1996) . The one discount item that would <br /> obviously be realized is that a direct cost for a hoistman would not be <br /> necessary. In addition, it is the Division's position that daily expenses <br /> for project labor should be included in the estimate, and as such, your <br /> direct cost for meals during the bulkhead concrete pours can be <br /> discounted. Also, the Division believes that detailed indirect costs need <br /> to be broken-out as a refinement to the SGC estimate. Based on the <br /> foregoing discussion, the Division's estimate of direct and indirect costs <br /> for bulkhead replacement are presented here: <br /> Direct Costs: $550, 601. 00 from SGC estimate <br /> (10, 800. 00) hoistman <br /> (902 . 00) meals during pour <br /> 40,560. 00 $65 per diem for 624 laborer-days <br /> Total Direct: $579, 459. 00 <br /> Indirect Costs: $8982.00 Public Liability Insurance. . 1.55% dir. <br /> 5650. 00 Performance Bond. . . . . . . . . . . . .975% dir. <br /> 57,946. 00 Contractor's Profit. . . . . . . . . 10. 0% dir. <br /> 11, 589 . 00 Contractor's Contingency. . . . 2 . 0% dir. <br /> Total Indirect: $84, 167 . 00 <br /> TOTAL CONSTRUCTION CONTRACT AMOUNT (direct plus overhead, profit, and <br /> contingency) : $663, 626. 00 <br />