NAC519A.350. General requirements.

     1. An operator shall file a surety with the Division or a federal land management agency, as applicable, to ensure that reclamation will be completed on privately owned and federal land. The surety may be:

     (a) A trust fund;

     (b) A bond;

     (c) An irrevocable letter of credit;

     (d) Insurance;

     (e) A corporate guarantee; or

     (f) Any combination thereof.

     2. If the surety is a trust fund:

     (a) The operator shall make periodic payments to the trust fund at least annually for the term of the exploration project or mining operation.

     (b) The initial payment to the trust must be:

          (1) For a new exploration project or mining operation, made before the land is affected.

          (2) For an exploration project or mining operation which is active on October 1, 1990, made within 60 days after the operator receives a permit from the Division.

     (c) The balance of the trust fund must be sufficient at all times to satisfy the requirements of NAC 519A.360.

     3. If the surety is the bond of a corporation:

     (a) It must state that the operator shall faithfully perform all requirements of the permit issued by the Division.

     (b) The corporation must be licensed to do business in the State of Nevada.

     4. The operator may provide evidence of a surety provided by the program for the pooling of reclamation performance bonds developed by the Division of Minerals of the Commission on Mineral Resources pursuant to NRS 519A.290.

     5. If the surety is an irrevocable letter of credit, the letter of credit must:

     (a) Be executed and issued by a bank authorized and doing business in the State of Nevada or a correspondent bank which is authorized to do business in the State of Nevada.

     (b) Be made at the request of the operator.

     (c) State that the issuing bank will honor drafts for payment upon compliance with the terms of the credit.

     (d) Be irrevocable and issued for at least 1 year.

Ê The operator shall notify the Division at least 60 days before the expiration of the letter of credit. The notice must state whether it will be renewed or replaced with another form of surety.

     6. If the surety is insurance:

     (a) The policy must guarantee the performance of each reclamation obligation and permitting requirement of the operator if the operator defaults on any such obligation or requirement.

     (b) The insurance company issuing the policy must be authorized to conduct the business of insurance in the State of Nevada.

     (c) The insurance company issuing the policy must have a superior financial strength rating and a superior credit rating as determined by A.M. Best Company of Oldwick, New Jersey, or equivalent ratings from a nationally recognized insurance rating service.

     (d) The policy must provide for a financial guarantee which satisfies the requirements of NAC 519A.360 and which is available at all times if the operator defaults on any reclamation obligation or permitting requirement.

     7. If the surety is a corporate guarantee:

     (a) Not more than 75 percent of the required surety may be satisfied by the corporate guarantee, which is subject to periodic review and approval by the Administrator of the Division. The remaining portion of the surety must be satisfied by a surety identified in this section.

     (b) The audited financial statements of the corporation must indicate that the corporation has two of the following three ratios:

          (1) A ratio of total liabilities to stockholder’s equity less than 2 to 1.

          (2) A ratio of the sum of net income plus depreciation, depletion and amortization to total liabilities greater than 0.1 to 1.

          (3) A ratio of current assets to current liabilities greater than 1.5 to 1.

     (c) The net working capital and tangible net worth each must equal or exceed the amount established for reclamation pursuant to NAC 519A.360.

     (d) The tangible net worth must be at least $10,000,000.

     (e) Ninety percent of the assets of the corporation must be:

          (1) Located in the United States; or

          (2) At least six times the amount established pursuant to NAC 519A.360.

     8. Any financial information submitted to the Division pursuant to this section must be prepared in accordance with accounting principles that are generally accepted in the United States.

     (Added to NAC by Environmental Comm’n, eff. 9-19-90; A by R089-01, 10-25-2001; R080-08, 12-17-2008; R044-12, 9-14-2012)