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intended actions of the State under default by the Operator, would act to waste <br />(verb) the deposit. <br />iii. Unless we missed it, none of these permits or subsequent corrective actions by the <br />Office, including periodic and incremental adjustments in warranty as an attempt <br />at corrective action, was ever brought to the attention of the Board, or the industry <br />at large. There are no statutes, rules or regulations, no written policy statements, <br />no means for anyone outside the view of past Office actions to be aware of this, <br />either by nature or extent. <br />iv. In our opinion, it would be a singular and separate matter to enumerate the diverse <br />missteps made in the development, administration, approval, and comportment of <br />these referenced operations, by both Operator and the Office. They clearly do not <br />apply in any manner by form, substance, or conduct with our own. <br />V. Continuing our conversation, <br />- The Office asserts that a `large' sand product stockpile under the condition of a <br />default by the Operator would constitute a liability to the State, for which it must <br />protect itself by including the cost of returning the sand product stockpile to the <br />basin from which it was extracted. <br />- Further, the Office made clear that it considered the presence of the sand product <br />stockpile to be a `problem of the whole, and not the part.' Meaning the entire <br />stockpile requires consideration for disposal by the Office in the event of default. <br />- Finally, one of the more interesting statements of the Office is that they would <br />probably give away the other product stockpiles in a default. There was no stated <br />concern that to do so would alter local markets and depress the demand and price <br />for similar product offered by nearby producers. <br />- Again, with so little consideration of free markets and correlated product values, <br />it becomes somewhat clear why pushing a product into a nearby `hole' (a valuable <br />basin) would make sense. <br />- If you stop the production of sand, you essentially stop extraction and processing <br />at the operation. It will be forced to abandon staff and sell off product until <br />production can resume. This is untenable for an Operator as human talent is not <br />machine like and available on a whim. Human talent must be found, cultivated, <br />and rewarded. Any resulting work stoppage would be a punishment initiated by <br />the State, paid for by Varra Companies. <br />vii. What's the bottom line? The bottom line is this: The product stockpile only <br />becomes a liability if you DO push it into a hole. <br />k) Correlated to matters attended to in Part I, above; the report makes a unique <br />determination..., <br />The sedimentation ponds located along the western boundary of the tract will be <br />backfilled with waste material as mining continues. <br />i. The operation does not generate waste. The selective use of viable product in the <br />creation of a higher end use value of the location is entirely within the prerogative <br />of the land owner under the terms of the approved permit. <br />ii. The use of the word `waste,' has been applied by other Operators and the OMLR <br />on operations unlike that encountered at the Kurtz Resource Recovery and Land <br />Development Project. <br />Varra Companies, Inc. correspondence of 30 March 2015 to the Colorado Office of Mined Land Reclamation in 13 <br />reply to the OMLR Inspection Report of 28 August 2014 — Kurtz Project — M -1999 -006 <br />