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Ill IIIllIIIIIIII IN • • STATE OF COLORADO DIVISION OF MINERALS AND GEOLOGY Department or Nawral Resources 1313 Shzrman St.. Room ?15 Denver. Colorado 80203 Phone: f30T 8F6-3567 F,qx: (303; 8328106 May 9. 2001 ~~ D I VISION ~ htINERAI &- ~' GEOLOG: REGLA MA716r MINING•$AFE~ Mr. Robert Bassett Dorsey & Whitney LLP Republic Plata Building Suite 4700 370 Seventeenth Street Denver. CO 80202-547 Re: Lorencito Coal Company, LLC Expired Permit No. C-96-084 Dear Mr. Bassett: Bill Uvens Governor Creg E. Watcher &ecmive Director Michael 8. Long Division Dlrenar Thank you for your letter of May 7, 2001 and (or spesking with me eazlier today. As discussed, the above-referenced permit expired on November 7, 2000. Also, on November 7, 2000, Greystone (on behalf of A.P. Maxwell. LLC) requested that the Division of Minerals and Geology (DMG) grant a six month extension of the C-96-084 permit term. The DMG has the authority to grant such a request under 2.01.5(2). With various previous correspondence, we have described the information submittals necessary to make a reasonable determination in accordance with 2.01.5(2)(a) and (b). As agreed today, we still require submittal of surface and coal lease agreements, or letters of intent that show a substantial likelihood that such lease agreements will be executed in the near future. The documents must account for all parries involved, which as we understand it, include MGP Enterprises (53.46% coal), F.R. and B.F. Hill (46.5390 coal) and B.F. Hi1VHiIl Ranch (10090 surface). Your Letter of May 7, 2001 indicates that formal lease agreements with MGI' and the Hills will be executed in the next few days. We are willing to accept legitimate letters of intent which verify that these negotiations are ongoing and nearly complete, but actual leases will most fully indicate compliance with 2.01.5(2) and 2.03.6(2). Compliance with both rules is necessary to allow DMG to issue a proper extension of the expired Permit No. C-96-084 As of May 4, 2001, we received three copies of a Permit Recision application for the expired Permit C-96-084. We cannot formally accept this application unless, and until, the Permit C )6-084 is reactivated and an extension is granted pursuant [0 2.01.5(2). Once the surface and coal access lease information is submitted and deemed acceptable, as discussed above, we will reactivate the permit. As previously agreed with Gre}'stone and AEI personnel, we will [hen extend the deadline For initiation of operations to a date which is twelve months from the permit reactivation date. We will also formally accept and review the Permit Revision once the permit is reactivated. Thank you for your assistance and cooperation in this matter. Simon rely, PSa etry oat Program Supervisor Cc: ~ Gorham Dan Hernandez Mike Long Jerry Koblitz Lorencito 5 9 OI Iv