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BEFORE THE MINED LAND RECLAMATION BOARD <br />STATE OF COLORADO <br />FINDINGS OF FACT, CONCLUSIONS OF LAW AND BOARD ORDER <br />IN THE MATTER OF LKA INTERNATIONAL, INC., PERMIT NO. M-1978-091 UG, <br />MV-2008-009, Permittee <br />SITE: Golden Wonder Mine <br />THIS MATTER came before the Mined Land Reclamation Board ("Board") on <br />August 13, 2008, in Denver, Colorado, for a hearing to consider a possible violation, cease <br />and desist order, corrective action and civil penalties for allegations of offsite damage and <br />impacts to the hydrologic balance on the permitted site. Bob Oswald was present for the <br />Division of Reclamation, Mining and Safety ("Division"), with counsel Cheryl Linden, First <br />Assistant Attorney General with the Office of the Colorado Attorney General. Kye <br />Abraham, President of LKA International ("Operator" or "Permittee") was present with <br />Karmen King of the Gault Group. <br />The Board heard testimony from Bob Oswald, Tony Waldron, Kye Abraham and <br />Karmen King. The Board having considered the exhibits submitted by the parties, the <br />testimony of the witnesses and having been otherwise fully informed of.the facts in this <br />matter hereby enters the following findings of fact, conclusions of law and Board Order. <br />FINDINGS OF FACT <br />1. The Operator has a Division issued 110d permit for an underground gold mine <br />located at Section 10, Township 43 North, Range 4 West, NM P.M., consisting of <br />approximately 3.5 acres in Hinsdale County, Colorado. The site is referred to as the Golden <br />Wonder Mine and the permit number is M-1978-091 UG. <br />2. On May 6, 2008, Bob Oswald and Tony Waldron were conducting a routine <br />Division inspection of the permitted site, during which a slope failure occurred. Ms. King <br />was present and representing the Operator during the inspection. Mr. Oswald and Mr. <br />Waldron observed concentrated runoff from the permit area wash out a portion of an offsite <br />slope and affect a downstream segment of Deadman Gulch. Mr. Oswald presented a slide <br />presentation with pictures of the affected area to the Board. Due to the slope failure the <br />current bond on the permit of $44,000 is inadequate. <br />3. It was noted during the inspection that the Operator was in the midst of a <br />diversion project, although no technical revision or amendment had been filed with the <br />Division. There was offsite damage due to incomplete installation of an unapproved onsite <br />Golden Wonder Mine <br />Permit No. M-1978-091