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NEW MEXICO HIGHWAY DEPARTMENT INVOLVEMENT 1. The state of New Mexico identified the Valdez pit as a "Designated Pit." This is a legal definition that places certain restrictions on construction companies who supply gravel to the State of NM for highway (or other) projects. Among other restrictions, companies that supply gravel to NM from pits other than "designated pits" pay a penalty. I have asked legal counsel for NM to send me a copy of the definition of "designated pit," but he has not come through. The state of New Mexico prospected the Valdez property by drilling 6 test holes. They identified the gravel resource, procured an agreement with the Valdez's to pay a royalty, and then arranged for gravel extraction with A&S Construction. 3. On a State of New Mexico map, an Environmental Program Manager (W.L. Taylor) certified that the pit had received Environmental and Archaeological Clearance on 2-3-84. 4. The State of New Mexico, received written request from Demetrio Valdez (Jan. 8, 1985) to forego reclamation as he wanted to use it for a gravel pit. 5. The State of New Mexico released A&S Construction from reclamation requirements under their contract on 2-5-85. A&S CONSTRUCTION INVOLVEMENT 1. A&S contracted with the State of NM to supply gravel and perform reclamation on the Valdez pit. NM subsequently released them from reclamation obligations, and retained certain fees that were to be paid for reclamation. We do not have a copy of their contract, although I have asked NM legal counsel to send us a copy. A&S legal counsel (M.E. MacDougall) recommended that A&S assert several defenses including: a. Statute of Limitations: C.R.S. Section 13-80-103(d) and C.R.S. Section 13-80-102(1)(1). b. Definition of "Operator" as any one "engaged in or controlling a mining operation." C.R.S. 34-34-103(10) 3. Mr. MacDougall stated to A&S: "I am sure there are other defenses, but I think you should assert these during Mr. Posey's investigation, in order that the Mined Land Division can be fully informed before any administrative "action" (See 24-4-102, C.R.S.) is concluded. I believe it would be in the interest of A&S Construction Co. to advise the Mined Land Reclamaiton Division that we believe proceeding against A&S Construction Co. upon these facts may well be grounds for recovery of attorney fees under Part 1, Article 17, Title 13, C.R.S."