ENFORCE33076 - Laserfiche WebLink

Home Browse Search

._ ,. _ ..,t'.~1~0 ' = : ° ; S-~3S'..57255 _ .•'-ic ~~FSO~.l':'=5 L':7 ~::GE 94 htr. David A. Berry December 28, 2000 Page 3 a. Frontier's "de-authorization" will create no harm duringthe abatemerrt r+aiod The basis for the NOVs is that Frontier is no longer listed by the United States Department of the Treasury as an "authorized" surety company. However, Frontier is not in bartlQUptcy or receivership and, to the best of our knowledge, has not failed to honor any reclamation obligation anywhere in the country. Therefore, while the "de-authorization" of Frontier by the Treasury Department may (or may not} constitute a technical violation of Colorado's bonding requiremems, there is no evidence that Frontier has failed or will fail to honor any obligation to the State of Colorado. While this fan might (or might not) be insufficient as a defense to the underlying NO V, it is certainly a significant fact to consider in determining the appropriate abatement period. b. There will be no reclamation failure during the abatement period. For the dispute between Frontier and the Treasury Departmem to cause harm to Colorado during the abatement period, all of the following would have to occur within the next 60 days: (1) Bowie would have to fail to meet a reclamation obligation, (2) Bowie would have to fail to correct the problem, and (3) Frontier would have to fail to perform on the bond. That improbable chain of events simply will not occur within the next 60 days. Bowie has not failed to meet reclamation obligations to date. c. Bowie is a healthy mine operator, As we have discussed with you and others previously, Bowie is a healthy and viable mine operator. All of the production from the Bowie No. 2 mine for the next four years has already been sold. Our production costs aze low. Our profit mazgins aze healthy. We recently installed a new down}till conveyor for $6,000,000, and we are currently bidding a $10,000,000 rail loading facility. Our internal comparisons with other operators in Colorado show that we are extremely competitive with regard to cost-per-ton, earnings and cash flaw. We are also an extremely safe operator, as demonstrated by our receipt of the 2000 Heahh and Safety Award from the Colorado Mining Association and the Colorado Division ofMmerals and Geology. Moreover, we have an excellent compliance history with the Division. Bowie has an $800,000 work order in place for reclamation at the Bowie No. 1 Mine, where reclamation of the west portal is scheduled for completion by March 1, 2001, and reclamation of the east portal should be completed by the end of 2002. In shoR, we are a profitable, safe and responstble coal mine operator, and we are here to slay. Whatever the technical problems with the Frontier bonds, a 60~ay extension ofthe abatement period will not harm the State of Colorado. D031]672.1