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~s ~ cb~ ~S <br />STATE OFD COLORADO <br />DIVISIOPY OF RECLAMATION, MINING AND SAFETY v <br />Department of Natural Resources <br />7313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (307) ab6-3567 <br />FAX: (303) 832$106 <br />January 12, 2007 +~ <br />Mr, Kirk Eberl <br />King Mountain Gravel, LLC <br />7276 W. Mansfield Ave. <br />Lakewood, CO 80235 <br />RE: King Mountain Sand & Gravel Mine; Permit No. M-1978-314 <br />King Mountain Gravel, LLC; Financial Warranty Increase <br />Dear Mr. Eberl, <br />COLORADO <br />DIVISION O F <br />RECLAMATION <br />MINING <br />-tSL- <br />SAF ETY <br />Bill Owens <br />Governor <br />Russell George <br />Executive Director <br />Ronald W. Cottony <br />Division Director <br />Natu21 Resource Trustee <br />On January 5, 2007, the Division of Reclamation, Mining and Safety reevaluated the amount of financial warranty <br />required for the King Mountain Sand & Gravel Mine, Permit No. M-1978-314. The reevaluation is to adjust for <br />any increases in equipmen and labor rates since the bond was last evaluated in 2005 for the Conversion <br />Application Ol (CN-Ol~ <br />According to Rule 4.2.1(1) and (2), the Division may review a financial warranty at any time to determine if the <br />amount is sufficient to perform reclamation. The Division recalculated the bond to factor in 2006/2007 equipment <br />and labor rates and reclaim the site to achieve the approved postmining land use of rangeland habitat. The result of <br />the recalculation indicates that We site is currently underbonded. This letter is to inform you that your financial <br />warranty will need to be revised fiom its current amount of $327,000.00 to $351,000.00 within 60 days of receipt <br />of this letter. A copy of calculatlons used to determine this cost is attached for your review. The operator has three <br />options regarding the amount of required bond; <br />1. submit additional financial warranty in the amount of $24,000.00 <br />2. perform some reclamation on the site to reduce the reclamation liability, or <br />3. revise the reclamation plan. <br />The Division is aware that the operator has submitted a surety reduction request to account for the clean-up of <br />miscellaneous equipment and debris on site. Once the Division is able to access and inspect the site, the Division <br />will determine how much the bond can be reduced. The surety reduction will confirm that item #2 noted above has <br />been completed, and the bond can be reduced. <br />However, in the event that the surety reduction is denied or an increase is still warranted King Mountain must post <br />the noted increase by June 1, 2007. Failure to do so maybe considered a violation of the Construction Material <br />Rules and Regulations. If you have any questions about this process or how the bond was calculated, please <br />contact me at (303) 866-4943. <br />S' cerely, <br />~~l ~~w° <br />Erica S. Crosby <br />Environmental Protection pecialis <br />cc: Cazl Mount; DRMS <br />Elizabeth Shelton; DRMS <br />Tanya Light; AGO <br />Paul Gesso; Banks & Gesso w/enclosure <br />Ezekiel Williams; Faegre 8c Benson, LLP w/enclosure <br />Enclosure; 1-5-07 Reclamation Cost Estimate <br />O ice o Office of <br />Mined Land Reclamation Active and Inar1ive Mines <br />