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_. ~~NT ERR • <br />....+±~~ .ti <br />~ YI P <br />.. . <br />! ' u' <br />J <br />S?TS~N <br />• <br />ll.S. Department of Energy <br />Grand Junction Otfice <br />2597 B 3/4 Road <br />Grand Junction, CO 81503 <br />FEB 17 t998 <br />Mr. Tom Gillis <br />Colorado Department of Natural Resources <br />Division of Minerals and Geology <br />484 Tumer Drive <br />Building F, Suite 101 <br />Durango, CO 81301 <br />iii iiiiiiiiiiiiiiii <br />999 <br />Subject: New Leaseholder for DOE Lease Tracts C-.iL~S, C-SR-13, and C-SR-1 ~ <br />Dear Mr. Gillis: <br />This is in response to your letters to Ms. Dorothy Blake and Mr. Joe Baldwin, dated <br />February 5, 1998, concerning Colorado Division of Minerals and Geology (DMG) Permits <br />No. M-77-248 (C-ID-S Mine) and M-78-343 (Ellison Mine, C-SR-13), respectively. <br />Please be advised that all rights, title, and interest in the subject lease tracts, on which the two <br />referenced permits aze located, have been recently assigned from Telluride Mining Company, <br />[nc., to Gold Eagle Mining, Inc. (GEMI). This assignment was approved by the U.S. Department <br />of Energy (DOE) on February 6, 1998. These assignments also transferred all reclamation <br />liabilities associated with the three lease tracts to GEMI. GEMI, as part of the assignment, <br />provided DOE with an irrevocable letter of credit for $80,000 (aggregate sum) to cover the <br />reclamation liabilities that exist on the three lease tracts ($47,000 for C-JD-S, $22,000 for <br />C-SR-13, and $11,000 for C-SR-15). <br />DOE requires a single surety (performance bond, letter of credit, etc.) per lease tract. This surety <br />is all encompassing and covers the reclamation of all envirorunental disturbances existing on the <br />tease tract as a result of the leaseholder's (or prior leaseholders) mining and exploration <br />activities. Each lease agreement specifies the amount of surety required for that particulaz lease <br />tract. This amount can increase to cover new or expanded operations, or decrease as operations <br />cease and sites are reclaimed. Each lease agreement also requires the leaseholder to comply with <br />all applicable statutes and regulations, including those required by Colorado DMG. <br />The irrevocable letter of credit provided by GEMI will be held by DOE until it is either replaced <br />with another surety of equal value, or the reclamation activities covered by the surety are <br />performed to the satisfaction of all applicable federal and state agencies. <br />On the basis of the aforementioned lease assignments and DOE's receipt of GEMI's irrevocable <br />letter of credit, DOE is in the process of releasing all previous leaseholders and other entities <br />