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Reason to Believe a Violation Exists and Notice of Board Hearing <br /> Schwartmalder Mine <br /> Page 2 of 3 <br /> • The Operator hereby promises the Board that it will comply with all of the terms of the <br /> permit, as amended and supplemented,as well as any conditions attached by the Board; <br /> • The Operator promises to be responsible for the cost of reclamation...and agrees that it will <br /> maintain a financial warranty covering the Board's estimated cost of reclamation in good <br /> standing for the entire life of the permit. <br /> • If the Board determines that the Operator is in default under this performance warranty and <br /> has failed to cure such default...the Operator's financial warranty shall be subject to <br /> forfeiture. <br /> Pursuant to C.R.S. 34-32-118(1)(b)and Rule 4.20(1)(b): a financial warranty shall be subject to <br /> forfeiture whenever the board shall determine that the Operator is in default of the performance <br /> warranty and has failed to cure such default although they have been given ample notice thereof and <br /> has had ample time to cure such default. <br /> In addition to the requirements agreed to in the Performance Warranty, C.R.S. 34-32-117(6)(a) <br /> requires that"Financial Warranties shall be maintained in good standing for the entire life of any <br /> permit issued under this article. Financial warrantors shall immediately notify the board of any <br /> event which may impair the warranties". CLL's notification of its financial circumstances and <br /> inability to maintain the financial warranty is a notification of"impairment"of the warranty, and the <br /> Division has reason to believe the financial warranty is"materially impaired"and has set this matter <br /> for consideration by the Board pursuant to C.R.S. 34-32-117(6)(d) for a determination whether <br /> impairment has in fact occurred. <br /> Pursuant to C.R.S. 34-32-117(6)(f), if the Board finds that the financial warranty has been impaired <br /> it may order the Financial Warrantor to provide an alternative form of financial warranty. The <br /> Division will be requesting the Board issue an order that the current financial warranty(corporate <br /> surety)be replaced by a cash bond. <br /> Based on the above stated facts and notifications from CLL, the Division believes CLL is in <br /> violation of: <br /> • C.R.S. 34-32-117 and the terms of the Performance Warranty for failure to maintain the <br /> financial warranty in good standing for the entire life of the permit; and <br /> • C.R.S. 34-32-124 for failure to comply with the conditions of an order,permit or regulation. <br /> Therefore,the Division has reason to believe that a violation exists to the Colorado Mined Land <br /> Reclamation Act, C.R.S. § 34-32-101 et sea., and has scheduled this matter to appear before the <br /> Board. <br />