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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 />September 25, 2013 <br />James A. Kiger <br />Environmental Manager <br />Oxbow Mining, LLC <br />P.O. Box 535 <br />Somerset CO 81434 <br />Re: Elk Creek Mine, Permit No. C- 1981 -022 <br />Technical Revision No. 75 JR -75) <br />Adequacy Letter 3 <br />Dear Mr. Kiger: <br />COLORADO <br />D I V I S ION Of <br />RECLAMATION <br />MINING <br />SAFETY <br />John W. Hickenlooper <br />Governor <br />Mike King <br />Executive Director <br />Loretta Pineda <br />Director <br />Oxbow Mining, LLC ( OMLLC) submitted TR -75 proposing to install a borehole into the sealed <br />Sanborn Creek Mine for the purpose of gas production. As part of the proposal, an elevated pad <br />is needed to accommodate the drill rig for the well construction and possible equipment for <br />moving gas to the Elk Creek electrical generating station. <br />As part of the revision review process, the Division contacted the Colorado Oil and Gas <br />Conservation Commission (OGCC) which is the regulating agency for gas production wells. <br />OGCC has received a permit application from Vessels Coal Gas Inc. for the Oxbow Mining LLC <br />well and it is currently being reviewed. Jane Stanczyk at OGCC said that while the permit <br />application is under review, no well construction or associated surface disturbances are <br />authorized to be constructed according to the Oil and Gas Conservation Act of the State of <br />Colorado Rule 303.b (1) A. This includes the well pad proposed in TR -75. <br />At this time, the Division cannot approve TR -75 until the OGCC issues a permit for the gas well. <br />The Division will postpone its decision on TR -75 until the OGCC permit has been issued. <br />The Division acknowledges that the Sanborn Creek Mine portal area is valuable to OMLLC for <br />gas development. The Division suggests that a permit revision be submitted for an alternative <br />land use (Rule 4.16.3) to change the post mining land use for the area of the de -gas well from <br />rangeland /wildlife habitat to industrial. Upon approval of the permit revision, OMLLC will have <br />Office of Office of <br />Mined Land Reclamation Denver • Grand Junction • Durango Active and Inactive Mines <br />