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~~~ II~II~~~~~~~~ ~~~ <br />STATE OF COLORADO <br />DIVISION OF MINERALS AND GEOLOGY <br />Depanmenl of Natural Resources <br />131 3 Sherman 51., Room 215 <br />Denver, Colorado 80203 <br />Phone: OOJ) 866-1567 <br />rnx: dine 3C981~~97 <br />Greystone Development Consultants, Inc. <br />5990 Greenwood Plaza Blvd., Ste. 250 <br />Englewood, CO 8011 l <br />Attn: Jerry Koblitz <br />RE: Lorencito Canyon Mine (Permit No. C-96-084) <br />New Permit Application <br />Reclamation Cost Estimate <br />Dear Jerry: <br />II~~~ <br />DEPARTMEtJT OF <br />NATURAL <br />RESOURCES <br />Roy Romer <br />Governor <br />lames 5. Lochhearl <br />Execwive Dvecior <br />Mirhacl 8. Long <br />Dimsion Dveaor <br />The Division has completed review of the Reclamation Cost Estimate for the Lorencito Canyon <br />Mine. <br />The Division's estimate resulted in a grand total cost to reclaim the site, using a third party, of <br />$8,273,218.00. This is considerably less than the estimate submitted by Lorencito Coal Company <br />(LCC) and included in the permit application. The difference could possibly be due to the <br />methodology employed in computing the estimates. The Division bases earth moving costs on <br />Contractors Equipment Cos[ Guideline, while LCC used [he methodology employed by RS Means <br />Site Work and Landscape Cost Data. Other differences could possibly be due to certain <br />assumptions made in push distances, road grades and haul distances. <br />If LCC would like to explore the differences in the two estimates prior to a permit decision, the <br />Division would be willing meet to discuss differences. If no[, [he Division will accept LCC's <br />estimate as the required amount of bond to be posted with the Division, with one condition. <br />LCC did no[ include costs for sealing and abandonment of all drill holes, water monitoring wells, <br />or other mine openings. All mine openings must be sealed in accordance with Rule 4.07. LCC <br />should incorporate reclamation costs for the above into the estimate submitted with the permit <br />application. <br />Please call me if you have any questions. <br />Sincer ly, Gr'yY•G~--- <br />Ke A. Gorham <br />Environmental Protection Specialist <br /> <br />cc: Dan Hernandez, DMG <br />