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STATE OF COLORADO <br />DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3567 <br />FAX: (303) 832-8106 <br />December 19, 2008 v <br />Mr. Richard Blubaugh <br />Powertech (USA) Inc. <br />5575 DTC Parkway, Suite 140 <br />Greenwood Village, CO 80111 <br /> COLORADO <br /> D I V I S t O N OF <br /> RECLAMATION <br /> MINING <br /> <br /> SAFETY <br /> Bill Ritter, Jr. <br /> Governor <br />NON CO Harris D. Sherman <br />WFiDENI <br />?I ?L Executive Director <br /> Ronald W. Cattany <br /> Division Director <br /> Natural Resource Trustee <br />r/ <br />RE. Reclamation Bond Amount, Centennial Uranium Prospect, <br />Notice Modification MD-01, File No. ?z?? <br />F <br />Dear Mr. Blubaugh: <br /> <br />The Division has reviewed your letter and attachments dated November 26, 2008 providing cost data for use <br />in establishing the reclamation bond amount for the above referenced prospect. You provided plugging and <br />abandonment costs for three holes completed in 2008. The Division recognizes the value of this direct data, <br />but also recognizes that the three holes may not be fully representative of plugging issues that may develop <br />for the holes proposed under notice modification MD-O1. It can be anticipated that time and resource <br />consuming difficulties will occur in some percentage of holes to be abandoned. The unit costs used by the <br />Division to estimate plugging expenses are from dozens of recently abandoned holes in Colorado, and are <br />thus more representative of the percentage of problem holes that almost always occur in multi-hole plugging <br />projects. In order to use the site-specific data you have provided, the Division will add a twenty percent <br />contingency factor to that data. The amount of bond required for you to proceed with the activities under <br />modification MD-01 to prospecting notice P-2008-043 has been re-established at $67,400.00. See the <br />attached estimate summary spreadsheet for details. You may not proceed with the activities described in <br />MD-01 until bond in this amount has been provided and accepted in writing by the Division. <br />If you have any questions, please contact me at 303-866-3567, ext. 8143 or <br />Sincerely, <br />`c', <br />Allen C. Sorenson <br />Reclamation Specialist <br />enclosure(s) <br />cc: Elizabeth Taliaferro, DRMS, via email and w/ enclosures <br />c:lacs files\My Documents 4-19-06 thrulcentennial and-01 bond amount.doc <br />Office of Office of <br />Mined Land Reclamation Denver • Grand Junction • Durango Active and Inactive Mines