2001-04-12_REVISION - M1977493 - Laserfiche WebLink

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Post-it®Fax Note 7671 Date eL_J _ty{ ploes I- To From Co./Dept.IC Co Phone# / Phone# Fax#(,7 -;75- Fax# ) i April 12, 2001 DRAFT Mr. Bryce Romig Climax Molybdenum Company Climax Mine Climax, CO 80249 RE: Partial Reclamation Liability Release, Revised Approval Letter, Climax Mine, Permit No. M-1977-493, Revision No. SR-03 Dear Mr. Romig: This correspondence is intended to replace the revision SR-03 approval letter dated February 22, 2001. As we have discussed, the February 22, 2001 approval letter included two separate regulatory actions related to two completely separate sections of the Hard Rock/Metal Mining Rules and Regulations of the Mined Land Reclamation Board (Rules). The approval of revision SR-03 is in accordance with Rule 4.13, titled"Reduction of Warranty Amount." Subsection (2)(b) of this Rule requires that an Applicant provide an estimate of reclamation costs as justification for the amount of warranty reduction requested. Climax Molybdenum Company (Climax) complied with the requirements of subsection (2)(b) by detailing the type and amount of reclamation work completed and subtracting estimated reclamation costs for the completed or partially completed tasks from the detailed costs estimated by Fred R. Banta Inc. and Golder Associates for Climax in a workbook dated February 1999. During site inspections on September 26 and October 24 2000, the Division of Minerals and Geology(DMG) essentially concurred with the Climax position that all required reclamation as detailed in the SR-03 application had been completed in accordance with the approved reclamation plan. A number of relatively minor limitations to the DMG's concurrence were identified and each limitation was discussed with Climax personnel during the inspections. These limitations are described below. Following a review of a surety reduction application and inspection of the site, it is standard practice for the DMG to complete an independent estimate of costs for remaining reclamation tasks to verify the Applicant's estimate and to establish a new dollar figure for the amount of bond to be required. In the case of the Climax Mine revision SR-03 as it relates to the replaced February 22, 2001 letter, DMG included estimated costs for tasks that had been excluded from the February 1999 estimate the formed the basis for the amount of the current $52,365,000.00 bond. Inclusion of these heretofore excluded costs into the estimate resulted in the seemingly irreconcilable and potentially confusing circumstance of a surety reduction approval with the end result being an increase in the dollar amount of required bond. DMG recognizes that inclusion of the additional reclamation tasks and costs, which have been the subject of ongoing evaluation and discussion between Climax and DMG, should be a regulatory action separate from the approval of SR-03. Any increase in the amount of required bond by inclusion