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P s e,~-, ~t~, M e I7~ ~ STATE_ OF COLORADO <br />DIVISION OF MINERALS AND GEOLOGY <br />[kpaMlerlt of Natural Resources <br />t 3) 3 SherrrFan St., Roan n s C O L O RA D O <br />C)eflver, Colorado 80203 DIVISION O F <br />rt+orle: 13D3) 8663567 MIN RA L S <br />FA%: (303) H32.8106 G E O L O G Y <br />RFCLANATION•MINING <br />SAfFTT•fCllNCE <br />June 1,2006 <br />Bill Owcls <br />Mr. Rocky Hoffschneider V/ ~~ <br />Ruaell Georg! <br />Platte Sand & Gravel LLC ExeMive oins~or <br />P.O. Box 180 Ra>ala w. ~+r <br />Littleton, CO 80160 D"i'i0e are<mr <br />Natural Resource TrIFS[ee <br />RE: S&H Mine; Permit No. M-2000-158 <br />~1Qotice of Possible Violation; Failure to Maintain a Financial Warranty in Good Standing <br />Deaz Mr. Hoffschneider <br />The Division currently holds a financial warranty in the form of a Corporate Surety in the amount of <br />$1,123,000.00 for the S&H Mine, Permit No. M-2000-158. You are receiving this letter because the <br />Division has reason to believe that your Corporate Surety, issued by Abba Bonding Inc., #2005303- <br />168, maybe materially impaired. <br />Pursuant to C.R.S. § 34-32.5-117(6)(a), "a financial warranty shall be maintained in good standing for <br />the entire life of a permit issued under this article." The Division received information alleging that S <br />& H's financial warranty is impaired. Based on this information, we researched the viability of S & <br />H's financial warranty, which, as you know, is in the form of a corporate surety issued by Abba <br />Bonding Inc. ("Abba', a company incorporated in the state of Alabama. According to our research, <br />the Division has reason to believe that the financial warranty has been materially impaired due to the <br />following reasons: <br />1. Pursuant to C.R.S. § 34-32.5-117(3)(f)(I), a surety bond must be issued by a <br />corporate surety authorized to conduct business in Colorado. A search of the Colorado Secretary of <br />State's corporate database revealed that Abba Bonding Inc. is not listed as being authorized to <br />conduct business in Colorado. <br />2. More importantly, Abba may not be authorized to provide corporate sureties or <br />bonding whatsoever. On March 11, 2005, the Alabama Department of Insurance issued an Order to <br />Cease and Desist, Case Number P-2005-67R, (the "Order") against Abba and Moms Seazs, and <br />against the reinsurance company which purported to pledge $30 million to back Abba, American <br />Preferred Underwriters Reinsurance Company, Ltd. 1'he Order was also issued against individual <br />Abba agents. A copy of the Order is attached for your review. The Order was issued for the <br />following reasons, among others: <br />a. Abba is not authorized in Alabama to engage in the business of surety insurance. <br />b. Abba is not authorized in any state to engage in the business of surety insurance. <br />c. Specifically, the Order stated: <br />Office of Office of Colorado <br />Mined Land Reclamation Active and Inactive Mines Geological Survey <br />