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Dl1 t~-rFSi: ^G <br />OFFiC <br />STATE OF COLORADO <br />DIVISION OF MINERALS AND GEOLOGY <br />Depanmem u( Natural Resources <br />I l l J Sherman 51., Room 715 <br />Dem-rr. Colorado 80_'07 <br />Phone. 13031 Bbb-756: <br />August 13, ]997 <br />Stephen H. Kinney <br />207 North Orchard <br />Farmington, NM 87401 <br />Re: Orion Pit, File No. M-94-115, Receipt of Irrevocable Letter of Credit -Inadequate <br />Deaz Mr. Kinney: <br />~~ <br />I~~~ <br />DEPARTMENT OF <br />NATURAL <br />RESOURCES <br />Roy Romer <br />eovemoi <br />lames 5. lochhead <br />E~ecuuve Director <br />n+rchael B Long <br />Dwismn D~reclor <br />Enclosed, you will find the original Irrevocable Letter of Credit No. 97-OS in the amount of $20,000.00 provided by <br />the Bank of the Southwest at Farmington, NM. I received the letter of credit and forwarded the attached <br />corespondence to Thomas D. Gillis, Senior Reclamation Specialist in our Durango Field Office. Mr. Gillis will <br />respond to your letter. This correspondence only pertains to the adequacy of the bond instrument. The letter of credit <br />is being returned to you for the following reasons: <br />1) The form of the bond does not meet our requirements. The letter does not contain the language, as specified <br />by the Mined Land Reclamation Board, and required by our policies. I provided this language, in my letter <br />of May 30, ] 997, to Charles G. Kinney and to you, by copy, in the form of an attachment. <br />2) The letter was not accompanied by either the appropriate executed Financial Warranty Letter of Credit form <br />or a Performance Warranty. <br />3) The Statement of Condition is unacceptable. It is clearly marked "unaudited" and it is not certified. We prefer <br />to have a copy of the Call Report, also known as the "Consolida[ed Reports of Condition and Income." The <br />form to be determined by the bank's situation: Banks With Domestic and Foreign Offices-FFIEC 031; Total <br />Assets of $300 Million or More - FFIEC 032; Total Assets of 5100 hfillion or More But Less than $300 <br />Million - FFIEC 033; or Total Assets of Less Than 5100 Million - FFIEC 034. <br />In my letter dated May 14, 1997, I reques[ed that a bond not be submitted, "until the application has been jound <br />complete, the Public Novice re-published in a local nex•spaper, al! adequacy issues have been resolved and the bond <br />calculated. " To my knowledee, only the completeness of the application has been determined. <br />Based on the above findings, the original Letter of Credit is found to be inadequate and [herefore it is being returned <br />to you for disposition. <br />Please call me if you have any questions regazding this matter. <br />Sincerely, <br />Lavern . Lemay , <br />rats Program Assistan <br />cr. Charles G. Kinney, auomcy <br />hLchael B. Long. D~1G <br />Bruce Humphries, D~1G <br />/Thomos D. Gillis, D,\1G <br />Slere Brown. AGO <br />enclosures <br />CERTIFIED V AIL'~O. P 713 ?. 1931 <br />Return Recapl Requested <br />oozsa <br />