1998-02-20_REVISION - M1977248 (2)

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O FIELL OFFICE ~ STRTE DIVISION OF MINERALS AND GEOLOGY nepartment of Natwal Resources 1313 Sherman Sa, Room 215 Denver. Colorado 60203 Phone: (303) B6G-3567 FAx_ (303) 1132-R1(l4 COLORADO ~ENVFR QFFrCE PUelrc FI(,E cOPY FILE: /~I-~-35~Z SITE; F~4S~N MEMO ~~' DATE: February 20, 1998 TO: Barb Chiappone FROM: Tom Gillis ~ ~. RE: Financial W arranty increa a fo Edison ine, Permit No. M-78-342 ~'~ DEPARTMENT OF ~so~ s Roy Romer Goat*nM (amen S. Lochhead Exec~tire Director Michael B. Lony Divhion Director As you know, we have been working on resolving an inadequate financial warranty issue for the above referenced operation. The matter is scheduled for the February 25-26 board meeting for consideration of enforcement action against the current permittee, Ryan; Ltd. for failure to increase the bond from the existing amount of $5,000.00 to a recalculated amount of $10,750.00. During this last summer & fall, Telluride Haring Co. attempted to succeed to the permit, but the SO was denied after they were not able to come up with the bond money. In recent weeks, a new operator, Gold Eagle Mining, Inc., has initiated the S.O. process with DMG and in addition has completed obtaining the DOE lease for the site and has also posted a 522,000.00 Irrevocable Letter of Credit with the DOE. The DOE has acknowledged to DMG in writing that Gold Eagle Mining, Inc. is the current valid DOE lease holder, and that the DOE financial warranty has been accepted. The DOE has also indicated that the DOE bond covers reclamation activities, and that the DOE lease agreement requues that the leaseholder comply with all applicable statutes and regulations, including those required by the DMG. Additional information has been provided to the DMG indicating that the entire permit azea for M-78-342 is within the DOE lease area. As a result of the information & verifications provided to the DMG by the DOE and the operator, it appears that we can now accept the use of the 522,000.00 DOE Financial Warrarty in lieu of a $10,750,00 DMG Financial Warranty (except for the $100.00 cash bond minimum required by DMG). Please let me know how the Succession of Operator process is going, and whether we can have everything wrapped up prior to the February 25-26 Boazd Meeting. If we can get the S.O. ~ 5nalized and obtain a $100.00 cash bond from Gold Eagle Mining, Inc., l can withdraw the agenda item from the February Boazd agenda. If you need any additional information, please give me a call. We should be able to release the 55,000.00£B to Perry Flanigan of Ryan, Ltd. once we approve the S.O. ~-iLeTler ~S Crec.~ f-, /tdg m342meml.tdg