REV94583

• Permit No: C1981022
• IBM Index Class Name: Revision
• Doc Date: 8/20/1996
• Doc Name: MEMO PACIFIC BASIN RESOURCES OXBOW CARBON & MINERALS INC LETTER OF CREDIT BOND
• From: DMG
• To: DEBBIE MULLOY DAVE BERRY
• Type & Sequence: SO3
• Media Type: D
• Archive: No

,:
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STATE OF COLORADO
DIVISION OF MINERALS AND GEOLOGY
Depanmenl of Natural Resources
1313 Sherman SI., Room 215
Dem•er, ColoraAo 80203
Phone: 13031 H55~ 3567
f AX ~. 17031 A 12-8105
TO:
FROM:
RE:
DATE:
M E M O R A N D U M
Debbie Mullo~
Dave Berry //
Susan McCannon o`Z(,L4g~,v~_
~~
DEPARTMENT OF
NATURAL
RESOURCES
Roy Romer
Gurernrn
tames S LorhheaA
Esecmioe DueUUr
Michael 8. Long
Drvisinn Director
Pacific Basin Resources, Oxbow Carbon & Minerals Inc.
letter of credit bond
August 20, 1996
I have completed my review of the Pacific Basin Resources, Oxbow
Carbon & Minerals Inc. (PBR), draft letter of credit bond which
includes an out-of-state bank, as issuer, and an in-state bank, as
payor. This is the first such letter of credit bond which we have
received. I believe that we should accept the letter of credit.
During my review process I examined the letter of credit bond
submitted in draft form by PBR, reviewed the letter of credit rules
which were revised in May 1995 along with the Statement of Basis
and Purpose for the rule, talked with Steve Brown, and reviewed
letters and recent opinions of the AGO related to a letter of
credit which was proposed by a mineral operator, and talked with
Rod Uhrich, a banking expert whom the Division had hired
specifically to look at our bonding procedures including letters of
credit.
The recently revised rule
letter may only be issued
business in the U.S. and
that the bank need not be
letter of credit can be
located in the state of
Statement of Basis and Pu
instance refers to the D'
against the letter. Ther
provide for in-state pay
deemed necessary by the Di
that the Division wished
rule and therefore was in
the in-state requirement
regarding letters of credit states "The
by a bank organized or authorized to do
located in the state of Colorado, except
located in the state of Colorado if the
exercised at an affiliate or subsidiary
Colorado." (Rule 3.02.4(2)(d)(i)) The
rpose elaborates that "exercised" in this
ivision's securing of a claim or pay out
efore, the Division's main interest is to
out of a letter of credit when pay out is
vision. The Statement further reiterates
to provide some flexibility in meeting the
terested in "...allowing an exception to
for those letters of credit which are