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STATE OF COLORADO <br />~ DIVISION OF MINERALS AND GEOLOGY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 C O LO RAD O <br />Denver, Colorado 80203 D I V[ S I D N o f <br />Phone: (303) 8664567 IVt 1 N & A L $'. <br />FAX: (303) 832$106 G E O L O G ~'~ <br /> 0.EC LAM ATION•MIN ING <br /> SAFETT•SCIENCE <br />2004 <br />O <br />t <br />b <br />7 <br />er <br />c <br />o <br />, siu Owens <br /> Governor <br /> Russell George <br /> <br />Larry Perino Executive Director <br />/ Reclamation Mana er Ronald W. Cattany <br />g Division DirMOr <br />V <br />Sunnyside Gold Corporation Natural Resource Trustee <br />P.O. Box 177 <br />Silverton, CO 81433 <br /> <br />~/ Re: Water treatment bond and land use issues: Sunnyside Gold Corp., Slumyside Mine, M-1977-378 <br />~~ <br />Dear Mr. Perino, <br />Over the past few months, in response to Gold King Mines Corporafion's (GKMC) application for the <br />American Tunnel property, the Division has been looking into Sunnyside Gold Corp's (SGC) reclamation <br />plan and associated financial warranty for the American Tunnel area. Recent conversations with Steve <br />Feam of GKMC, and your attorney Gene Megyesy's inquiries to the Attorney General's office prompt <br />this response. This letter presents the Division's opinion on the need to re-visit the reclamation plan and <br />financial warranty for the American Tunnel water treatment system and associated azea. <br />SGC has satisfied part of its reclamation obligation for the American Tunnel azea. Having plugged the <br />American Tunnel according to the reclamation plan, that portion of the bond assigned to plugging costs <br />has been released. Bond funds for reclaiming the settling ponds remain in place, along with those <br />covering demolition of the buildings, surface grading, topsoiling and seeding. SGC was required to post <br />no bond for groundwater treatment during the American Tunnel reclamation period. <br />The groundwater dischazge rate at the Gold King #7 portal has fluctuated since SGC plugged the <br />American Tunnel. Whether these fluctuations aze caused or affected by plugging the American Tunnel is <br />not known. Water from the Gold King mine, which is of poor quality, is piped to the American Tunnel <br />water treatment system. <br />There is no fmancial surety to treat groundwater from the Gold King mine. Unless GKMC conducts or <br />proposes underground work that degrades or could be expected to degrade the existing water quality, then <br />GKMC is not required to post financial surety to treat groundwater. <br />Recent property developments and proposals for this site raise questions about SGC's plans and ability to <br />reclaim the rest of the site. We understand that the American Tunnel area is managed and/or owned by <br />several entities, including the BLM, Dresser Minerals, Gold King Mines Corporation, and San Juan <br />Corporation. For properties under their control, these entities have proposed several land uses, some of <br />which are incompatible with the current approved post-mining land use, and some of which are unknown. <br />For instance, the BLM has expressed its view that the post mining land use is to be rangeland -which is <br />Office of <br />Mined Land Reclamation <br />Office of <br />Active and Inactive Mines <br />Colorado <br />Geological Survey <br />