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;~` ~ ~ III IIIIIIIIIIIIIIII <br />999 <br />June 25,2001 <br />wii. Dan -i. `Y~ilthl' ~•'J <br />Environmental Protection Specialist <br />State of Colorado <br />Dept. of Minerals & Geology <br />1313 Sherman Street, Room 215 <br />Denver, Colorado 80203 <br />Re: Status of Outstanding issues <br />McGlone Canyon Mine(C-1981-004'1 <br />Munger Canyon Mine(C-1981-020) <br />Dear Mr. Mathews, <br />RECEIVED <br />JUN 2 g ZUO~ <br />Division of Miners & Ge0 <br />bDY <br />This letter is responding to [he concerns you addressed in your letter of June 14, 2001. <br />Firs[, regarding the Lodestar bankruptcy filing. The bankruptcy filing will no[ affect Lodestar's <br />ability to operate in compliance with DMG permitting, bonding, and reclamation requirements. <br />The bankruptcy proceeding was commenced on March 30, 2001 with the filing of an involuntary <br />Chapter 11 petition. On April 27, 2001,With Lodestar's consent, the bankruptcy court entered an <br />Order of Relief in the case. Since the inception of the Chapter 11 proceedings, Lodestar has <br />continued to operate its business and manage its assets as debtor-in-possession under the <br />Bankruptcy Code. Obviously, to continue operating its business in Colorado, Lodestar must <br />comply with the DMG requirements you mention, and there is nothing about [he bankruptcy <br />proceeding that prevents it from doing so. You may be interested to know that on Thursday, <br />June 21, the bankruptcy court entered a Final Order approving Lodestar's debtor-in-possession <br />financing, which authorizes Lodestar [o obtain financing from its secured lender, Congress <br />Financial Corporation, during the pendency of the bankruptcy proceeding. With its financing in <br />place, Lodestar is now focusing on development of a plan of reorganization and expects to <br />ultimately submit a plan that will be approved by the court, although the process may take several <br />months. <br />Lodestar Energy Inc. <br />HC 35 Box 370 <br />Helper, Utah 84501 <br />435-637-9200 <br />Second, regarding the bond increase of $79,026.00. Since receiving your letter, we have initiated <br />the bond request and anticipate posting the additional bond within the next 30 days (by July 25, <br />2001). <br />