GENERAL54632

• Permit No: C1981012
• IBM Index Class Name: General Documents
• Doc Date: 2/21/2003
• Doc Name: Permitting History of New Elk
• From: DMG
• To: John Toupal
• Permit Index Doc Type: General Correspondence
• Media Type: D
• Archive: No

STATE OF COLORADO
DIVISION OF MINERALS AND GEOLOGY
Department of Natural Resources
1313 Sherman SL, Room 215
Denver, Colorado 60203 DIVISION O F
Phone: [phone] MINERAL S
FAX: [phone] &
GEOLOGY
RECLAMATION
MINING•SA FETY
February 21, 2003
Bill Owens
John Toupal Governor
14900 Highway 12 ExeguEive D lector
Weston, CO 81091 Ronald W. Cattany
Division Director
RE: Permitting History of the New Elk Mine, #C-81-012
Dear Mr. Toupal:
As per your request of February 21, 2003, I have reviewed the public file concerning the
permitting history of the New Elk mine since the closure of the Golden Eagle Mine (#C-
81-013) in December 1995. The current permittee of the New Elk mine is Picketwire
Processing, LLC. The transfer of permit #C-81-012 (New Elk) from Basin Resources
Inc. to Picketwire Processing LLC became final on May 22, 1997 as a result of
permitting action Succession of Operator #2 (SO-02).
The Golden Eagle Mine ceased coal production in late December 1995. During the life
of the operation, coal was transported by truck to the New Elk Mine site, where it was
processed in the preparation plant and loaded to unit trains for shipment to market.
Following cessation of mining at the Golden Eagle mine, remaining coal stockpiles were
processed and shipped from the New Elk site until sometime in March 1996. Review of
the March 12, 1996 Division of Minerals and Geology (DMG) inspection states "The
operator presently does not know the final decision of whether the mine will close and
reclaim. Potential buyers still exist and the current date for a decision is April 15, 1996.
Review of the Temporary Cessation file for the New Elk mine reveal three letters from
the mine operator; received by DMG March 19, 1996, September 16, 1996, and
October 18, 2001. The September 16, 1996 letter states "As you are aware, we are
presently in the process of selling this property and will apply to transfer the permit to
the new owner."
Original plans as presented to DMG during January 1996 for the nearby Lorencito mine
did not involve the New Elk mine operation. Coal was to be mined, processed, and
loaded to unit trains for shipment at the Lorencito Canyon site. The record is not clear
at what point the New Elk mine was considered as a processing facility and loadout for
Lorencito coal. However, the initial DMG written findings (page 13) for approval of the
Lorencito permit state "Coal will be shuttled by rail from the rail loadout at the mouth of
Lorencito Canyon to the New Elk mine site (permit no. C-81-012) located approximately