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SETTLEMENT AGREEMENT JUSTIFICATION NOV C-9S-004 Notice of Violation C-9S-004 was issued for "Failure to declare all owners, controllers and operators. Failure to obtain approval for all owners, controllers and operators prior to initiating mining activities. Failure to supply information pertaining to ownership and control of the mining operation". Tony Waldron issued the NOV to Bowie Resources Limited for the Bowie Mine No. 1 Mine on March 14, 1995. Mr. Waldron explained that the mine permit was transferred from Cyprus Orchard Valley Coal Corporation to Bowie Resources Limited in January, 1995. During the review for succession of operators Bowie Resources had identified Burin Mining Company as the operator of the Bowie Mine. However, this deal fell through and Bowie Resources Limited was identified as the operator. During a February inspection the inspector noticed that M.A.G. Mining was on site mining the coal. Bowie Resources Ltd. submitted a workforce agreement to the Division contending that M.A. G. Mining was under contract to Bowie Resources Ltd. and they were not "owners or controllers" of the mine. On his March 14, 1995 inspection Mr. Waldron determined that M.A.G. Mining, Inc. was mining the coal and based on several clauses is the workforce agreement, he felt M.A.G. did qualify as a controller of the mine. As such the information required by Rule 2.03.3 and 2.03.4 should have been submitted before M.A.G. Mining Inc. started mining coal. The Division was particularly concerned because one of the owners of M.A.G. had been identified as a violator in the Applicant Violator System with the recommendation to deny any permitting actions. Mr. Davis O'Connor, representing Basin Resources Ltd., did not contest the fact of the violation, but he did want to contest the amount of proposed civil penalty. Furthermore, although he did not contest the fact of the violation, he wanted the record to show that Basin Resources Ltd. did not consider M.A.G. Mining Inc. to be a controller of the mine. M.A.G. was hired to retain the workforce and to take care of all the personnel matters. Bowie Resources Ltd. retained the authority for the supervision of the conduct of operation. The proposed civil penalty was: History $0.00 Seriousness $500.00 Fault $750.00 Good Faith $0.00 Total $1250.00 Hrstorv The assessment officer overlooked an NOV issued to Permit C-81-038 during the last twelve months. NOV C-94-032 was issued to Cyprus Orchard Valley Coal Company on November 10, 1994.