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Thus the restriction of bonded but undisturbed land to area 1U is sensible. It also <br />provides for sufficient expansion capability in the event a huge demand for sand <br />might suddenly appear and needs to be supplied quickly. <br />New Reclamation Costs and Bonding: <br />Attached is a calculation sheet which determines the new reclamation costs and <br />recommended bonding amount. The new amounts are based on previous amounts with some time <br />related adjustments. <br />The calculation starts by taking the current bond ($1,083,044) and divides that by the current <br />bonded acres (500 acres). This produces a mean cost per acre that can be applied to the new acreage. <br />This is appropriate because the characteristics of the operation have not changed since the last bond <br />was calculated. <br />The mean cost per acre is then increased by 5% to allow something for inflation, which has <br />been low since the last bond determination. This produces a new, inflation adjusted mean cost per <br />acre. <br />That inflation adjusted mean cost per acre is then multiplied by the combination of the <br />current affected land and the remaining part of Area 1U that is not already included in the current <br />affected land. The acreage calculation actually comes out to 154.07 acres. This is then adjusted <br />upward to 155 acres. That acreage is then multiplied by the inflation adjusted mean cost per acre to <br />derive the reclamation cost for the new acreage configuration. This results in a reclamation cost of <br />$352,530.82 for the current affected land plus the remainder of Area 1U. None of Areas 2U or 1L are <br />included in the bond, nor is the stream crossing from Area 1U to 2U included. If necessary, <br />appropriate lands in those areas will be bonded in the future by request or technical revision. <br />(Note: the current bond amount includes the Division's add ons. Therefore, no additional add ons <br />are needed as they are already included in the mean cost per acre and the inflation adjusted mean <br />cost per acre.) <br />It is therefore requested that the new bond amount be: <br />$352,530.82 for 155 acres of affected land. <br />Technical Revision- Coal Creek Resources - M- 1988 -044 submitted August 6, 2012 Page 4 of 4 <br />