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United States Department of the Interior <br />IN REPLY RURR TO! <br />OFFICE OF SURFACE MINING <br />Reclamation and Enforcement <br />P.U. Box 46667 <br />Denver. Colorado 80201-6667 <br />I <br />February 27, 2007 fQ? <br />MAR p 7 Z <br />Mr. Dave BY ???%s,r,•;? or <br />Office of Mined Land Reclamation mini q `'n,j sale y?OR <br />Acting Director, . <br />Division of Reclamation, Mining and Safety <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Dear Dave: <br />i <br />This is the Office of Surface Mining's (OSM) determination with regard to your response to ten- <br />day notice No. X-07-140-i 16-001. We issued the ten-day notice because of a possible violation <br />by Basin Resources, Inc. at its Golden Eagle mine under permit number C-013-81. The possible <br />violation involved Colorado rule 4.20.3 (2) which requires repair of structures damaged by <br />subsidence or compensation to the owner in the full amount of the diminution in value resulting <br />from subsidence. By lettei dated February 15, 2007, you informed OSM that you issued a notice <br />of violation (NOV) to Basin Resources, Inc., for failure to compensate the owner of the structure <br />damaged by subsidence. You incorporated the Colorado Court of Appeals' determination of the <br />amount of compensation required. Your NOV set May 15, 2007, as the time for abatement. <br />Our review and determination of your response is covered under 30 CFR 842.11(b)(2). An action <br />or response by a State regulatory authority that is not arbitrary, capricious, or an abuse of <br />discretion under the State program shall be considered "appropriate action" to cause a violation to <br />be corrected or ",good cause" for failure to do so. These terms are defined in (b)(2) and (3) as <br />follows. I <br />(3) Appropriate action includes enforcement or other action authorized under the State program <br />to cause the violation to be corrected. <br />(4) Good cause includes. (i) Under the State program, the possible violation does not exist. <br />On the basis of the issuance of a NOV to Basin, OSM finds that your response to our ten-day <br />notice is appropriate action! <br />Sincerely, <br />James Fulton <br />Chief, Denver Field Division <br />TAKE PRIDES <br />I NAMERICA--;;* <br />EXHIBIT I