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Regarding your comments about the language contained on the form, you are confusing the purpose <br />and function of the two forms that were provided to you. The form entitled "Financial Warranty Letter <br />of Credit" (FWLOC) is the portion of the financial warranty containing a written promise from the <br />operator to the Board to be responsible for reclamation costs. The form entitled "Irrevocable Letter of <br />Credit" (ILOC) is the instrument portion of the financial warranty that provides the necessary proof of <br />the operator's financial responsibility. It is the ILOC form, not the FWLOC form, that contains the <br />automatic renewal clause required by Rule 4.7 121. On the FWLOC form, the warrantor is the bank <br />that is providing the proof of the operator's financial responsibility, namely the Irrevocable Letter of <br />Credit instrument. The phrase referenced in your letter that "the bank is not a party to this agreement" <br />appears to have been taken out of context. The "agreement" is the portion of the FWLOC form <br />containing the written promise from the operator to the Board that the operator will be responsible for <br />reclamation costs. As stated on page 2 of the FWLOC form, the bank's obligations are "set forth in <br />it's Letter of Credit". Contrary to assertions made in your letter, the bank is bound by the 90 day <br />notice requirement which is provided in language contained in the ILOC form. The time period blanks <br />contained on page 2 of the FWLOC form are for the bank's ILOC issuance and anniversary dates since <br />most Ibut not all) ILOC's are issued on an annual basis. The time period shown on an executed <br />FWLOC form is not the time period that the agreement between the operator and the Board is in effect. <br />Per your request, we have enclosed an example of an executed Letter of Credit Financial Warranty <br />which clearly shows the bank agreeing to automatic renewal and 90 day notice. Additionally, Rule 4.7 <br />131 requires that the bank orovide documentation in the form of a balance sheet certified by a Certified <br />Public Accountant demonstrating that the Letter of Credit does not exceed ten percent (10%) of the <br />bank's capital surplus accounts, and that the Operator provide this documentation annually, as part <br />of the Operator's Annual Report. The bank provides the documentation along with the ILOC form at <br />the time the bond is submitted, and the Operator provides annual follow-up documentation in the <br />Operator's annual report. The documentation provided by the bank often takes the form of a Call <br />Report that is kept in a separate file in our Denver Office. Because the Orion Pit application is still <br />under review and has not been approved, there is no "Operator", only an applicant, and as has been <br />previously explained in written correspondence to you, submittal of a financial warranty for the Orion <br />Pit is premature. Additionally, because there is no operator, no annual report is due. You are incorrect <br />in asserting that the documentation is to be provided "only" in an operator's annual report. The word <br />"only" is not contained in Rule 4.7 131. DMG's policy, consistent with this recommendation, is to <br />require the bank documentation prior to approval of the letter of credeit in addition to the <br />documentation to be supplied in the annual report if a permit is issued. <br />Rule 1 .4.1 1 applies to application packages that have been determined to be complete and thereby <br />filed, and where the Office has failed to make a final decision within one hundred twenty (120) days, <br />or one hundred eighty 1180) days in the case of a complex application, of the date of receipt of a <br />complete application. In order for an application package to be considered complete, it must contain <br />all of the Exhibits required by Rule 6. <br />Regarding your comments about the missing Exhibit R information, we must reiterate that the Division <br />has reviewed both the Orion Pit and Mars Pit files and can find no Exhibit R information for the Orion <br />Pit prior to June 3, 1997. The "possibilities" you listed on page 2 of your letter regarding what may <br />have happened or not happened are speculation. The information may not have been sent to the <br />Division prior to June 3, 1997, The essential fact is that the Division did not receive the Exhibit R <br />information prior to June 3, 1997, and therefore the application was not deemed complete until that <br />date. <br />You are incorrect in asserting that the Division ignored the application for 2 1/2 years. The Division <br />~~1~~ <br />3 <br />