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Letter to Bryce Romig 2 April 12, 2001 <br /> DRAFT <br /> of additional tasks and estimated costs will be via a separate letter and will be done under the authority <br /> of Rule 4.2.1(2) titled "Financial Warranty Review." The SR-03 approval, conveyed to Climax by this <br /> replacement letter, will now be an action separate from any financial warranty review, and the sixty (60) <br /> day deadline to submit increased bond established in the DMG's February 22, 2001 letter is hereby <br /> rescinded. As you know, the deadline date was to have fallen on April 21, 2001. The calculation of the <br /> amount of required bond based on this approval of SR-03 is detailed below. <br /> By this replacement letter, Revision SR-03 to the Climax Mine Reclamation Permit No. M-77-493 has <br /> been approved; the approval date for the revision was December 23, 2000. What follows in this letter is <br /> a discussion of the terms of the approval as outlined during the site inspections conducted on September <br /> 26 and October 24, 2000. Also provided is discussion and calculations related to the working <br /> reclamation cost estimate that forms the basis for the amount of Financial Warranty required to <br /> maintain the reclamation permit, and an updated bond dollar amount reflecting the refund due as a <br /> result of SR-03 approval. <br /> 1. Storke Complex <br /> The Division of Minerals and Geology (DMG) through approval of Revision SR-03 releases Climax <br /> from reclamation liability for backfilling and grading in a portion of Storke Yard. Limitations to the <br /> release of reclamation responsibility for the Storke Complex are as follows: <br /> • Approximately 11 acres around 7-Shaft are not included in the release. <br /> • Approximately 9 acres where the buried Arkansas River channel will be reconstructed under the <br /> terms of the approved reclamation plan is not included in the release. <br /> • The immediate locations of 5-Shaft and the 5-Shaft head frame, and the immediate locations of the <br /> Storke Waste Water Treatment Plant, ponds and appurtenances are not included in the release. <br /> • Mining debris exposed in the Storke Yard backfill will be removed (see 9/26/00 inspection report). <br /> • Revegetation responsibility release was not requested by Climax and is not included. <br /> The reclamation costs for reconstruction of the Arkansas River channel, and for backfilling and grading <br /> in the 7-Shaft area have been completely re-estimated for the purpose of establishing the amount of <br /> required bond. This was necessary because one of the primary assumptions used in the previous <br /> estimates is no longer valid, i.e., that cut material generated during reconstruction of the river channel <br /> could be backfilled into the main area of Storke Yard. Since backfilling is complete and released for <br /> the main area of the yard, the cost re-estimate assumes that river channel cut will be graded and blended <br /> into the reclaimed topography immediately adjacent to the reconstructed channel. This backfilling and <br /> grading strategy is more economical than hauling and backfilling the Arkansas River cut material in the <br /> 7-shaft area. This strategy is deemed to be feasible based on the discussion of Stoke Yard topography <br /> in the vicinity of the Arkansas River culvert as provided by Climax personnel during a meeting on April <br /> 3, 2001. However, the DMG will further evaluate the potential for blending Arkansas River cut into the <br /> existing topography during a future inspection of the site. Designs for the reconstruction of Arkansas <br />