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12. On February 15, 2023, the Division received verbal notification from CLL <br /> that it would not be able to fulfill its obligations under Permit No. M-1977-300 to <br /> operate the on-site water treatment facility at the Schwartzwalder Mine due to <br /> financial circumstances and lack of funds. Additionally, CLL notified the Division <br /> that due to its financial circumstances it would be unable to cover the premium <br /> costs and maintain its financial warranty with The Hanover Insurance Company. <br /> 13. In subsequent calls between the Division and CLL, CLL stated that it lacks <br /> sufficient funds to bring the water treatment facility back on-line by the end of May <br /> 2023, as required by the permit. Failure to pump-down the mine pool and operate <br /> the water treatment facility will result in exceedances of applicable surface and <br /> groundwater quality standards, in violation of the permit. <br /> 14. Pursuant to Section 34-32-116(7)(g), C.R.S., disturbances to the prevailing <br /> hydrologic balance of the affected land and of the surrounding area and to the <br /> quality and quantity of water in surface and groundwater systems both during and <br /> after the mining operation shall be minimized. Additionally, Rule 3.1.6(1)(b) <br /> requires Operators to comply with applicable federal and Colorado water quality <br /> laws and regulations, including statewide water quality standards. <br /> 15. On March 9, 2023, the Division conducted an inspection of the <br /> Schwartzwalder mine, for the purpose of determining CLL's compliance with the <br /> Act, the Regulations, and the permit. <br /> 16. During the March 9, 2023, inspection, CLL stated it does not presently have <br /> the financial capacity to perform its obligations under the permit, specifically, it <br /> lacked funds to restart operation of the water treatment facility for the 2023 season. <br /> 17. On March 17, 2023, the Division sent via certified mail to CLL and the <br /> Financial Warrantor a Reason to Believe a Violation Exists letter ("RTB"). As <br /> outlined in the RTB, the Division commenced an enforcement action pursuant to its <br /> authority under Rule 4.20, C.R.S. 34-32-117, and C.R.S. 34-32-124 of the Act for <br /> failure to maintain its financial warranty in good standing, default under the <br /> performance warranty, and failure to comply with the conditions of an order, permit <br /> or regulation. <br /> 18. The RTB provided notice under the Act and Rules to both the Operator and <br /> Financial Warrantor of possible: permit revocation, a finding the financial warranty <br /> has been materially impaired, a finding that the financial warranty is subject to <br /> forfeiture and forfeiture of the financial warranty. <br /> 19. CLL committed to be bound by all applicable requirements of the Act and all <br /> applicable rules and regulations of the Board through its Performance Warranty <br /> Schwartzwalder Mine/M-1977-300 3 <br />