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iiiiiiiiiiiiiiiiiii <br />999 <br />BEFORE THE MINED LAND RECLAMATION BOARD <br />STATE OF COLORADO <br />Permit No. C-1981-041 <br />RESPONSE TO PETITION FOR FORMAL HEARING BY MLRB NOV CV 2000-010 <br />Powderhom Coal Company <br />Robert Clark and undersigned counsel represent the Division of Minerals and <br />Geology in the matters of two notices of violation issued to the Powderhom Coal Company <br />("Powderhom") as well as in Powderhorn's bankruptcy proceedings. Both NOVs request <br />replacement of a $2.6 million surety bond issued by Frontier Insurance Company <br />("Frontier") to ensure reclamation of the Powderhom site. The Division issued the first <br />NOV (NOV 2000-010) in December 2000, on two grounds: (1) the U.S. Department of <br />Treasury's revocation of Frontier's certificate of authority which allowed Frontier to transact <br />business with the federal government and (2) the failure of the Frontier bond to give the <br />assurance required by regulatory provisions because of Frontier's financial condition. The <br />abatement deadline for this NOV was originally set for January 16, 2001. Based on <br />Powderhorn's requests, the Division ultimately extended the abatement deadline to May 31, <br />2001, more than 90 days from the issuance of the NOV. To date, Powderhom has not <br />replaced the Frontier bond. <br />On April 13, 2001, the Division issued a second NOV (NOV 2001-005). This NOV <br />is based on the Colorado Commissioner of Insurance's suspension of Frontier's license to <br />