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<br />DIVISION OF MINERALS AND GEOLOGY <br />Department o(Natural Resources <br />1313 Sherman 51., Room 215 <br />Denver, CO 80203 <br />Phone: 1303) g66J567 <br />FA%:1303) 832-8106 <br />December 17, 1993 <br />of ~Oto <br />tip, <br />N` <br />~r8'16 ~• <br />Roy Romer <br />Governor <br />M¢hael g. Long <br />Mr. A. Reid Jone6, Vice President - Finance olv ls~on o~rttlor <br />VALCO, Inc. <br />P. O. Sox 550 <br />Rocky Ford, CO 81067 <br />RE: Finanial Warranty securing Permits M-77-023, M-77-222, H-77-223, M-77- <br />559, M-77-560, M-77-572, M-77-573, M-78-287, N-81-014, M-B1-132, M-84- <br />008 and M-86-015 <br />Dear Mr. Jonee: <br />On December 16, 1993, the Division of Minerals and Geology conducted a review <br />of your files and found the following: the new appraisal for the property <br />securing the reclamation bonds of VALCO, Inc. to be inadequate. During a <br />cursory inquiry this Office found property in the area of the subject deeded <br />property to have a market value of approximately $250/Acre, including <br />minerals, compared to the $4,700/Acre claimed in the appraisal. <br />we believe this is in violation of: C.R.S. 34-32-117(6)(a) for failure to <br />maintain the Financial Warranty for the life of the permit. <br />Therefore, we have reason to believe that a violation exists to the above <br />referenced Permit Numbers and to the Law, and have scheduled this matter <br />before the Mined Land Reclamation Board. <br />A Formal Public Hearing will be held during the January 26 and 27, 1994 Board <br />meeting for consideration of possible violation. The hearing will be held in <br />Room 318 of 1313 Sherman Street, Denver, Colorado, beginning at 9:00 a.m. or <br />ae soon thereafter as the matter can be considered. At that hearing you will <br />have the opportunity to be represented and heard. It will be reiterated that <br />there ie reason to believe that you are in violation of the provisions noted <br />above. <br />If the Board finds a violation at this hearing, it may issue a Cease and <br />Desist order, assess a Civil Penalty in the amount of $100 to $950 for each <br />day of violation, or order the permit be suspended, modified, or revoked. In <br />addition, it may set the matter for consideration of forfeiture of $500,000 <br />financial warranty at a subsequent hearing. If you have evidence indicating <br />that the possible violations noted above do not exist or have been corrected, <br />please provide it to us ae soon as possible or bring it to the hearing. In <br />order to correct this matter, you may: (1) poet the $251,704 insufficiency; <br />(2) withdraw the Deed of Trust and submit the full $329,954 bond in an <br />alternative warranty type; or (3) submit a recalculation of your bonds with <br />proof of sufficient reclamation activity to justify a decrease in your <br />reclamation bond liability to the $78,250 currently secured. <br />If you have any questions, please contact James Stevens. <br />Since <br />MICHAEL 8. LONG <br />Division Director <br /> <br />STATE OF COLORADO <br />MBL/JCS/lpl <br />CERTIFIED MAIL NO. P 296 525 766 <br />Return Receipt Requested <br />