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STITES & HARBISON PI.I.C II I I II I II ~ II IIII III <br />t T t n g x E r s 25G West Main Street <br /> 2300 ! ain~ nn Fi;,anual Center <br /> Letinplon. KY 50507-IiSB <br />2001 <br />Mazch 12 15591 226-230G <br />> 19591253-9154 Fat <br /> wwws Lles,com <br />William T. Gorton III <br />Robert D. Clark, Esq. Cheryl A. Linden, Esq. la5sl zzs-zzal <br />Assistant Attorney General First Assistant Attorney General wgorton@ttifes.com <br />Business and Licensing Section Natural Resources Section <br />1525 Sherman Street -Fifth Floor 1525 Sherman Street -Fifth Floor <br />Denver, CO 80203 Denver, CO 80203 <br />RE: Quaker Matter/Powderhom Coa] Company N.O.V. <br />Deaz Cheryl and Bob: <br />On behalf of Frontier Insurance Company, I want to thank you both, Mike Long and <br />David Berry for taking the time to discuss the various parries' positions on the Powderhom <br />matter. As we discussed, while we are optimistic that a solution to reclamation of the <br />Powderhom site is workable in the context of a Reorganization Plan, the fmancial assurances <br />that Frontier has put in place with National Indemnity (aka "the Berkshire Hathaway <br />Agreement") should provide the agency with comfort that the surety can and will perform its <br />obligations should they become ripe. As we discussed, we do however feel that the Colorado <br />Division of Minerals and Geology ("D.M.G.") position regazding the pending I~TOV regazding <br />the Frontier bonds is not appropriate. As I promised, through this letter I am forwarding the <br />results of our legal reseazch regazding the Notice of Violation at the Powderhom mine. <br />I_ RELEVANTFACTS~ <br />Powderhom Cnal Company ("Powderhom") operated 10,000 acre deep mine complex <br />and associated facilities pursuant to Permit No. C-1981-041, issued by the Colorado Division of <br />Minerals and Geology ("DMG"). The permit oovers approximately 7,763 acres of property <br />owned by the United States and managed by the Bureau of Land Management, with the <br />rematnln~ acreage owned by private interests. Powerhom Coal's sister company, Powderhom <br />Properties, holds the ]eases for the federal property2. Available information indicates that <br />Powderhom Coal holds the private leases. <br />tivtost of the facts set forth in this Memorandtfm are te}:en from the Clak letter. No information is <br />currently available to verify this information. <br />~ The Clark letter states that Powderhom Properties held a permit from OSM for the federal property; <br />however, no permit number is listed and no other reference is made to a federal permit. A check of AVS <br />did not reveal any federal permits held in the name of Powderhom Properties. Absent additional <br />information from Colorado or OSM to substantiate this claim, it is assumed that the statement made in the <br />Clak letter is an error. <br />Atlanta, GA Frankfort, KY Hyden. Kv JeNars onville, IN ! exia;:o n. KY Low.vdlt, KY Nashville, i1J Vla. hin"v;or, OC <br />