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• DIVISION OF MINERALS AND GEOLOGY Depanment of Nawral Resources 1313 Sherman Sr., Room 215 Denver, Colorado 80203 Phone: 13031 EI66~7567 FAX: 1307) 832-8106 December 2, 1994 Ms. Kathryn J. McGraEiy Risk Manager Adience, Inc. 1305 Grandview Ave. Pittsburg, PA 15211 RE: Submittal of an Adequate FSnancial Warranty, Siloam Mine, Permit No. M-77-326 and Cherokee Clay Mine, Permit No. M-77-325 Dear Ms. McCrady: I~ DEPARTMEM OF NATURAL RESOURCES Roy Rome+ Governor lames S. Loc hheazl Execmive Director Michael B Long Division D~~n for The permittee of the referenced clay mines was notified eazly this year that the existing fmancial warranties were inadequate and should be increased. The fmancial warranty requirement for the Siloam mine was increased to $36,500.00 (an increase of $34,000.00). The fmancial warranty requirement for the Cherokee Clay mine was increased to $13,600.00 (an increase of $11,100.00). The new fmancial warranties were to be submitted to the Division on February 2, 1994 (Cherokee Clay mine) and April 3, 1994 (Siloam mine). Adience, Inc., apparently, decided to submit aself-insurance bond for both fmancial warranty increases because the Division received a packet of fmancial information on January 24, 1994. Adience's cover letter did not specifically state the intent of the data submittal but, it is obvious, the company wants to bond for reclamation of the referenced mines under Rule 4.10.2 of the amended Mineral Rules and Regulations (Rule 7.4(7) of the old Mineral Rules and Regulations). However, Adience, Inc.. did not comply with the requirements of Rule 4.10.2 since the fmancial statement was not certified by an independent auditor. Meanwhile, the due dates for submittal of the above noted fmancial warranty increases have been exceeded by several months. As noted on page 3 of the inspection reports, the problems that are identified during an inspection should be corrected by the due dates or they will become possible violations. Not having an adequate fmancial warranty in place, pursuant to C.R.S. 34-32-117, may be a violation of the Mined Land Reclamation Act for failure to comply with the conditions of a regulation pursuant to C.R.S. 34-32-124: Whether this problem is a violation or not can only be determined by the Mined Land Reclamation Board at one of its regular meetings. _ 1 • III IIIIIIIII IIII III STATE OF COLORADO If this problem is not resolved by December 22, 1994 I will send a reason to believe notice, pursuant to C.R.S. 34-32-124, to request you to appear before the Mined Land Reclamation Board at its January 25-26, 1995 meeting. If the Boazd fmds a violation you could be