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United States Department of the Interior IN REPLY REFER TO: OFFICE OF SURFACE MINING Reclamation and Enforcement P.O. Box 46667 Dem~er, Colorado 8020]-6667 February 27, 2007 Mr. Dave Berry Acting Director, Office of Mined Land Reclamation Division of Reclamation, Mining and Safety 1313 Sherman St., Room 215 Denver, Colorado 80203 Dear Dave: '- y~~~`~~~~~~ ~.. oi~is, MAR ~ ~ 2001 Mining a~d Sa etyion This is the Office of Surface Mining's (OSM) determination with regard to your response to ten- day notice No. X-07-140-116-001. We issued the ten-day notice because of a possible violation by Basin Resources, Inc. at its Golden Eagle mine under permit number C-013-81. The possible violation involved Colorado rule 4.20.3 (2) which requires repair of structures damaged by subsidence or compensation to the owner in the full amount of the diminution in value resulting from subsidence. By letter dated February 15, 2007, you informed OSM that you issued a notice of violation (NOV) to Basin Resources, Inc., for failure to compensate the owner of the structure damaged by subsidence. You incorporated the Colorado Court of Appeals' detemunation of the amount of compensation required. Your NOV set May 15, 2007, as the time for abatement. Our review and determination of your response is covered under 30 CFR 842.11(b)(2). An action or response by a State regulatory authority that is not arbitrary, capricious, or an abuse of discretion under the State program shall be considered "appropriate action" to cause a violation to be corrected or "good cause" for failure to do so. These terms are defined in (b)(2) and (3) as follows: (3) Appropriate action includes enforcement or other action authorized under the State program to cause the violation to be corrected. (4) Good cause includes: (i) Under the State program, the possible violation does not exist. On the basis of the issuance of a NOV to Basin, OSM finds that your response to our ten-day notice is appropriate action. Sincerely, J lM'U.v1 t°l James Fulton Chief, Denver Field Division ~NAMERICA~