2000-06-23_REVISION - M1999002 (2)

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• ~ STATE OF iii iiiiiiiiiiiiiiii COLORADO ~il~~' DIVISION OF MINER - , rpdnmenl ni Vpl Ural Resources ~ 7 11 { Shernan SL, Room ?15 DIVISION O F Denver, Colorado 80:07 Phone: isoJl 856-JSh% MINERAL 5 FAx~1303I BJ.-8106 ~ J ~ ~. (~o„cp~ f,Q ~1•re ~ prr o`r G E O L O G Y J v I r; II Ti a ;~~ ~ 1• r~~ ~! tG R E C L A M A T I O N MINING•SAFETY / ' f d ~ `~ ~ / 5 ' ~ ( • c~`~ ` ~ June 23, 2000 Y ~ i ` ' Bill O.vans Governor Mr. Chris Freeman ereg t. w,l~n~•r ~C ~ American Soda- L.L.P. txe<ulive Director 2~ 717 County Road 215 Mich~cl B. long Drvisinn Dneclor Parachute, CO 81635 1 / Y RE: Reclamation Bond , Yankee Gulch Sodium Minerals Project, Permit No. M-99-002 Dear Mr. Freeman: As we discussed on Wednesday, this letter is intended to clarify the bonding requirements that will allow American Soda to proceed with the drilling and constmction of the first 26 solution mining wells of the commercial phase of operations at the Yankee Gulch Project. Please be reminded that injection of solutions into the wells for the purpose of commercial phase solution mining is prohibited until a technical revision is approved incorporating permit conditions protective of ground water into the Yankee Gulch Project reclamation pem»t. Current Status of the Bond The Mined Land Reclamation Board currently holds a bond in the amount of $26,000.00 for the Yankee Gulch Project. This bond was provided in July 1999 to allow permit issuance and the installation of certain monitoring wells. In January 2000, American Soda provided a new bond in the form of a check for Deposit in the State Treasury and in the amount of $100.00. This check was intended as a token bond under Rule 4.2.1(8) with the bulk of the $2.6 million required for surface facilities construction to be held by BLM. However, the Division of Minerals and Geology (DMG) identified a number of problems with the token bond submittal and returned it to American Soda for reprocessing. As of this date no reprocessed bond has been provided. Bonding for Drilling and Construction of Production Wells Enclosed with this letter is a tabulation of the bond amounts required for installation of 26 new production wells. These wells are in addition to the 3 solution mining wells already installed at the test mine facility. The bond amount required is $4,418,906.00. Once bond in this amount is accepted by the DMG, drilling of the new production wells may proceed. Prior to drilling in excess of 29 solution mining wells (26 new wells plus 3 test mine wells) the bond must be increased. For each solution mining well that is plugged and abandoned, American Soda may drill a new production well. A production well will not be considered to be plugged and abandoned until the DMG reviews and accepts the plugging and abandonment report. The $4,418,906.00 bond amount only covers reclamation costs for the Piceance Facility, [he Test Mine Facility, Access Roads, the Temporary Lay-Down Area, and the 0-5 Year Mining Panel. Prior to any disturbance in the 5-10 Year Mining Panel, additional bond must be provided.