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Snell &Wilmer <br />L.L.P <br />Mined Land Reclamation Board <br />March 14, 2001 <br />Page 2 <br />5. In a letter dated March 13, 2000, Powderhom informed the DMG that the December 13, <br />1999, temporary cessation of operations was permanent. <br />6. During June 6, 2000, Frontier, the surety that writes the bond for the Powderhom Mines, <br />was decertified by the U.S. Department of Treasury. <br />7. On December 14, 2000, the Division issued the above-referenced NOV to Powderhom. <br />8. On January 12, 2001, the Division granted Powderhom until March 14, 2001, to abate the <br />NOV. A condition of the extension was that Powderhom submit fortnightly reports <br />reporting on progress to: obtain a new bond, have Frontier issue an altema[ive form of <br />financial assurance, or such other actions as might lead to resolution of the NOV. <br />9. Powderhom has exhibited good faith in seeking to resolve this NOV, and has dutifully <br />and promptly submitted its fortnightly reports to the Division. <br />10. Powderhor has remained in full compliance with its permit and the rules and regulations <br />of the Board throughout this period. Powderhom has committed no act or action that <br />resulted in the change in status of its Frontier Bond. <br />11. The Frontier Bond remains in full force and effect despite its appazent loss of certification <br />from the Department of Treasury. There has been no finding that Frontier is bankrupt, <br />insolvent, or has had its license revoked or suspended. <br />12. With this Request, Powderhor also has petitioned the Board for review of the NOV (the <br />"Petition"), seeking that the Board find that issuance of the NOV was improvident and <br />unlawful. <br />13. Powderhor has initiated reclamation under its reclamation plan and is in full compliance <br />with its operating permit. <br />Powderhor believes that it has a substantial likelihood of prevailing on the merits. <br />Powderhom has performed every action and activity required of it under the regulations and its <br />permit. <br />Powderhom has conducted all mining operations under the lawfully issued Frontier bond. <br />The Frontier bond remains valid under Colorado law, and even were the Division's arguments <br />correct conceming federal delisting, the bond remains in full force and effect under Colorado <br />regulations and the terms of bond issuance. Furthermore, bond forfeiture is not authorized under <br />the present circumstances. Even assuming areuendo that the bond could be forfeited, a showing <br />of Frontier's incapacity is required, which we believe only can be demonstrated by the Colorado <br />Commissioner of Insurance. Finally, the Board's regulations conceming this aspect of bonding <br />are invalid as being more stringent that the federal requirements. For these, and the reasons <br />contained in Powderhom's Petition, there is a substantial likelihood that Powderhom will prevail <br />on the merits. <br />Of particular importance in granting this Request is that there would be no adverse affect <br />to public health or safety and there would be no significant imminent harm to resources or the <br />environment. The Powderhom Mines are in permanent cessation. The reclamation process has <br />era.i <br />