bond for mine #3In addition to the bond payment to the state there will be payments to the lessor for mine 3 as well:
The principal terms set forth in the LOI include:
The Lessor grants to the Lessee the right to acquire an exclusive and undivided leasehold interest in the ABGSC Leases, including coal mining and extraction rights, from the Lessor, upon:
- 1. The Lessee making one time payments to the Lessor in the amount of:
- a. $20,000 payment upon signature of the Letter of Intent;
- b. $40,000 payment upon execution of the Definitive Agreement;
- c. $40,000 upon technical acceptance of "the permit" by the Kentucky DNR.
- 2. The Lessee making tonnage production royalty payments to the Lessor in the amount of 1% of the gross sale price (FOB Mine) on all coal mined and extracted from the ABGSC Leases;
- 3. The Lessee making tonnage production override royalty payments to the Lessor in the amount of $1.50/net ton on all coal mined and extracted from the ABGSC Leases;
- 4. The Lessor shall be paid a recoupable minimum royalty payment of $10,000 per month beginning January 2010 and not to exceed 36 months. This payment can be credited against royalties when and if royalties from mining activities commence and to such an extent as such royalties exceed $10,000 per month paid to the Lessor.
- 5. The Lessor agrees to continue the permitting process for permit #861-0502 at its own cost, except for bonding and acerage fees, prior to final payment by the Lessee under 1c.
The bond fees vary on the acreage of the mine. source https://www.lrc.state.ky.us/krs/350-00/chapter.htm
The Bays Hollow reclaimaton bond according to the last financial statement was $27,900 and other bonds were about 66,000. The state could incrementally increase the bond amount as mining progresses.
Here is part of the State document:
A basic fee set by administrative regulation, and bearing a reasonable relationship to the cost of processing the permit application but not to exceed three hundred seventy-five dollars ($375), plus a fee set by administrative regulation but not to exceed seventy-five dollars ($75), for each acre or fraction thereof of the area of land to be affected by the operation, shall be paid before the permit required in this section shall be issued; provided that if the cabinet approves an incremental bonding plan submitted by the applicant, the acreage fees may be paid in increments and at times corresponding to the approved plan. The applicant shall file with the cabinet a bond payable to the Commonwealth of Kentucky with surety satisfactory to the cabinet in the sum to be determined by the cabinet for each acre or fraction thereof of the area of land affected, with a minimum bond of ten thousand dollars ($10,000), conditioned upon the faithful performance of the requirements set forth in this chapter and of the administrative regulations of the cabinet. The cabinet shall forfeit the entire amount of the bond for the permit area or increment in the event of forfeiture. In determining the amount of the bond, the cabinet shall take into consideration the character and nature of the overburden; the future suitable use of the land involved; the cost of backfilling, grading, and reclamation to be required; and the probable difficulty of reclamation, giving consideration to such factors as topography, geology, hydrology, and revegetation potential. The bond amount shall initially be computed to be sufficient to assure completion of reclamation if the work had to be performed by the cabinet in the event of forfeiture. The cabinet shall promulgate administrative regulations setting forth bonding requirements including, but not limited to, requirements for the amount, duration, release, and forfeiture of bonds.
GLTA
Wallywill