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P <br /> <br />Davis Graham & Stubbs LLP <br />March 2, 2007 <br />Hand Delivered acrd US Mail <br />David Berry <br />Director, Coa] and Minerals Programs <br />Colorado Division of Mining, Reclamation and Safety <br />1313 Shennan Street, Room 215 <br />Denver, Colorado 80203 <br />Re: Basin Resources -NOV CV-2007-001 <br />Deaz Mr. Berry: <br />MAR ~ 51001 <br />of Reclamation, <br />pwt,°:, and Safety <br />Mtnm9 <br />Basin Resources, Inc. is in receipt of Notice of Violation No. CV-2007-001, concerning <br />subsidence damage to the residence of Jim and Ann Tatum near Weston, Colorado. This Notice <br />of Violation ("NOV") was issued in response to a ten day notice from the United States Office of <br />Surface Mining Reclamation and Enforcement dated February 6, 2007. <br />Basin Resources wishes to abate the NOV at the eazliest possible date. Under the <br />applicable regulation, a person who conducts underground mining activities which results in <br />subsidence may, at the option of that person, either "repair, rehabilitate, restore, or replace <br />damaged occupied residential dwellings" or "compensate the owner of the damaged occupied <br />residential dwelling ... in the fu]] amount of the diminution of value resulting from the <br />subsidence." 2 Colo. Code Reg. 407-2, § 4.20.3(b); cf 30 C.F.R. § 817.121(c) (describing the <br />repair and compensation approaches as "options" available to the pennittee). Therefore, Basin <br />Resources shall repair the Tatum residence as the method for abating this NOV. <br />The NOV references a court judgment in favor ofthe Tatums in Case No. O1CV26. The <br />efforts of the Tatums to collect that court judgment are entirely unrelated to the regulatory <br />program applicable to coal mines in Colorado. In short, Basin Resources shall undertake repairs <br />to abate the NOV, and recognizes and accepts that its efforts to abate the NOV may not affect or <br />diminish any legal rights held by the Tatums related to the court judgment, nor affect or diminish <br />any legal defenses available to Basin Resources related to the court judgment. <br />The Division, the Mined Land Reclamation Board, and the Tatums previously <br />determined that the Tatums' claim for judicially determined damages should be entirely <br />separated from the regulatory enforcement process. The Tatums originally procured a Notice of <br />Violation concerning this subsidence issue from the Division on November 1, 2000 (NOV CV- <br />2000-009), and subsequently requested that the Division vacate that NOV because the Tatums <br />elected to pursue their claims against Basin in court. After a series of hearings, the Board <br />Scot W. Anderson , 303 892 7383 . scot.anderson@dgslaw.com <br />1550 Seventeenth Street Suite 500 Denver, Colorado 80202 303 892 9400 fax 303 893 1379 <br />www.dgslaw.com <br />#767897.1 <br />