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III IIIIIIIIIIIIIIII 999 STATE OF COLORADO DIVISION OF MINERALS AND GEOLOGY Deparlmem of Nawral Resources 131 3 Sherman 51.. Room 21 5 Denver, CO 80207 Phone: (307) 866-7567 FAX: (3071 B12-8106 DATE: August 13, 1993 T0: Daniel Hernande ' FROM: Debbie Mulloy RE: CANON COAL RECLAMATION BOND. PERMIT N0. 73-004 oe cow ~~ b ~c'~ o •~ Roy Romer Governor Michael B. Long Division DveUOr You recently asked me to explain in a memo the research of Bond Nos. 235623E and M 90 82 25. Our Division has been holding two bonds listed under the principle name of Canon Coal Corp and Canon Coal Inc. which I was unable to identify. I started researching these bonds to try and determine what they were for and why we were holding them. Shortly afterwards, Cathy Begej, also became involved in their status. I began with Financial Indemnity Company Bond No. 235623E issued November 8 „1,~~~y> J 1973 in the amount of $15,000.00. The legal description on the bond was E ~J\„ simply stated as Sec. 24, T20S, R70W, Black Diamond Mine, and bonded for y~i, $15,000.00 per acre of land affected. /,~~ ~ ~`~I I contacted Ray Wong at Financial Indemnity, P.0. Box 7754, Burbank, CA ~V y 1,~ 91510, Telephone No. (818) 843-2444 x227. Mr. Wong advised me that their ,I/ra'" records showed that after 1976 their company no longer wrote these type of .S~/" al-~ bonds. This bond did not appear on their record of bonds they continue to (// write. Additionally, I noted that Bond No. 235623E was never signed and approved by our Division Director at that time. I then looked into the validity of Bond No. M 90 82 25 issued February 7, 1975 by the Insurance Company of North America in the amount of $15,000.00. No legal description was noted. This bond was signed by the Division Director, David Shelton, on August 24, 1980. I discovered Signa Bond Services now handled bonds for the Insurance Company of North America. I was in contact with Susan Kelly, Signa Companies, Signa Bond Services, P.0. Box 90026, Bellview, Washington 98009, Telephone No. (206) 881-3762. I provided her with a faxed copy of the bond and she began her research of this bond the end of April 1993 and by June 17, 1993 advised me that the company was unable to locate this bond in their records. Ms. Kelly felt they may still be liable since no record of the bond or a release could be located. I advised her at that time I would pass this information along to you and have you, or someone from the Coal staff, contact her if necessary. As.I have said before, I feel the Division may want to research the archived files to look for additional information and/or verification that these two documents where not released and replaced by bonds later provided by GEC. I will continue to hold the original bond documents in my Coal Bond Pending file. Please advise how you wish to handle this matter. /dlm 8476E