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STATE OF COLORADO <br />DIVISION OF MINERALS AND GEOLOGY <br />Department of Na[ural Resources <br />1313 Sherman St., Room 215 _ <br />Denver, Colorado 80203 ./ SY <br />~ <br />~ <br />Q ~ L <br />~ DIVISION o F <br />/ <br />Phone: (303)866-3567 ~Y~` 1V11 (`I E IZAL$ <br />J <br />FAX: (303)832-8106 / & <br /> <br />DATE: A <br />rll 27 <br />2003 <br />/ GEOLOGY <br />R E C L A M AT I O N <br />p <br />, <br />I <br />~ MINING•SAFETY <br />TO: Erica Crosby <br /> Bill Owens <br /> Governor <br />FROM: Allen Sorenson ~ Greg E Watcher <br /> <br />Dec . N2m ? Executive Diredor <br /> <br />RE: Meeting Notes, Henderson Mine and Mill -Water Rights Ronald W. Cattany <br />Deeds of Trust Division Direclor <br />File No. M-1977-342 / <br />Meeting Date: Apri125, 2003 <br />Attendees: Steve Brown, AGO <br />Bruce Humphries, DMG <br />Carl Mount, DMG <br />Erica Crosby, DMG <br />Allen Sorenson, DMG <br />Issues for Discussion and Consensus Resolutions <br />Issue 1: The first paragraph of Henderson's 4-2-03 reply letter contains an offer to submit rnudified <br />deeds of trust to clarify that financial warranty amount attributed to the deeds of trust is set at 85 <br />percent of the appraised values of the encumbered water rights. Should we accept this offer'? <br />Resolution: No. The actual deeds of trust should not contain language relating to the dollar value <br />of the water rights. Rather, the calculation that relates the financial warranty amount to the <br />appraised value could be shown on a sheet that would be an attachment to the financial warranty <br />form, and the amount of financial warranty provided through the deeds of tmst would be listed on <br />the financial warranty form itself. For the three deeds of trust offered to date, the relationship is as <br />follows (assuming that the appraised values provided by Henderson are accepted): <br />Name of Water Right Appraised Value Reduction Factor Financial Warranty Amount <br />Incidental Rights $3,520,000.00 85 percent $2,992,000.00 <br />Williams Pump Sta. $2,810,000.00 85 percent $2,388,500.00 <br />Skylazk Ranch $4,935,000.00 85 percent $4,194,750.00 <br />TOTALS $11,265,000.00 $9,575,250.00 <br />The operator should be reminded that the Board or Office may accept warranties of not more than <br />85%. This number is dependant on the results of the independent reviewer and at the discretion of <br />the MLRB. <br />