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T O SIT <br /> �W,ENF Ty <br /> United States Department of the Interior <br /> Vamm%Wma <br /> O 9 <br /> vi O <br /> 7 � <br /> BUREAU OF LAND MANAGEMENT <br /> �'4RCH 3 San Luis Valley Field Office <br /> 1313 E.Hwy 160 <br /> Monte Vista, Colorado 81144 MAR 2 5 2019 <br /> CERTIFIED MAIL—RETURN RECIEPT REQUESTED 4VSONQ� <br /> deft s TOW <br /> Southway Construction <br /> 117 White Pine Dr. <br /> Alamosa, CO 81101 <br /> On November 29, 2018,the Bureau of Land Management(BLM), San Luis Valley Field Office(SLVFO) <br /> transmitted a letter to Southway Construction Inc. (Southway), informing them that BLM has not <br /> authorized Southway to dispose of any minerals within the proposed expansion area of the King Pit and <br /> cannot guarantee it will do so in the future. In the letter,we also informed you BLM requires resolution <br /> of two outstanding trespasses committed by Southway in 2010 and 2018. As the owner of the mineral <br /> materials underlying the expansion area and the south end of the pit,BLM retains disposal authority. <br /> On December 4, 2018, BLM SLVFO received Southway's response to BLM's letter. In summary, <br /> Southway stated: (1) It understands that BLM is undertaking further investigation into the 2010 trespass, <br /> which will result in calculation of the monetary amount owed; (2) it believes the lands Southway intends <br /> to enter to expand its operations are not subject to BLM royalty because,under Colorado State case law, <br /> sand and gravel is not a mineral interest when the mineral right completely subsumes the surface estate; <br /> and(3) its previous actions in 2018 did not rise to the level of trespass because Southway believes it did <br /> not exceed the quantity. <br /> BLM's response to the issues raised in Southway's December 4, 2018 letter are as follows: <br /> 1. BLM is continuing its investigation of Southway's 2010 trespass. BLM intends to utilize <br /> unmanned aerial systems (UAS) in this investigation and will need to do so on a date the pit is not <br /> active. BLM would appreciate cooperation from Southway to provide such information of when <br /> so that a date can be scheduled as soon as possible. Once its investigation is complete, BLM will <br /> contact Southway to seek resolution.Until Southway's liability for the 2010 trespass is resolved, <br /> BLM will not authorize any new activity of any type by Southway. Any unauthorized removal of <br /> mineral material by Southway from the federally owned portion of the property will be treated as <br /> a willful trespass. <br /> 2. BLM disagrees with Southway's assertion the expansion area is not subject to federal royalties. <br /> BLM has confirmed the United States patented the surface lands in the expansion area under the <br /> Stock Raising Homestead Act of 1916 (SRHA),"reserving to the United States all the coal and <br /> other minerals."In Watt v. Western Nuclear, Inc., 462 U.S. 36, 60 (1983), the Supreme Court <br /> held that"gravel is a mineral reserved to the United States in lands patented under the [Stock <br /> Raising Homestead Act]". In its December 4 letter, Southway asserts, "The expansion area we <br /> have added to the King Pit based on Colorado State court case law is not subject to BLM royalty. <br /> Based on this case law when the exercise of sand and gravel as a mineral right completely <br /> consumes the surface estate,the sand and gravel is not a mineral interest."This statement is not <br />