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August 1, 2007 <br />Page 2 <br />Westmoreland Coal Company would be in compliance with 30 CFR §774.17, <br />Transfer, Assignment or Sale of Permit Rights if Westmoreland Coal Company was the <br />permittee/applicant. As DRMS has failed and refused to follow the law, Basin Resources, <br />Inc. is not in compliance nor is Westmoreland Coal Company. <br />The Certificate of Liability provided to me by Mr. Berry dated May 27, 2007 <br />indicates that the "INSURED" is Westmoreland Coal Company. <br />30 CFR § 774.15 Permit renewals (ii) requires evidence of liability insurance by <br />the applicant (Basin) not Westmoreland- <br />The enclosed redacted letter dated July 16, 2007 from Morris Kegley, Legal <br />counsel for Basin Resources, Inc. states "Westmoreland Coal Company is not responsible <br />for the debts of Basin Resources". Reclamation is a debt. Further he states, Basin has <br />no assets or revenue, and the glaring admission is that Mr. Kegley refers to Basin as a <br />"judgment proof corporate debtor". Admission that Basin has no assets or revenue and <br />that Westmoreland Coal Company is not responsible for Basin's debt equates to no <br />economic assurance of compliance with reclamation. An operator is financially <br />responsible for repairing material damage resulting from subsidence. This information <br />directly contradicts the requirements of DRMS and OSM. The Reclamation Bond that <br />DRMS has for Permit C-81-013 states under Additional Provisions of the bond: "The <br />amount of this bond is based upon estimates... and does not operate to liquate, limit, <br />enlarge or restrict the Principal's (Basin) obligation to complete the reclamation <br />plan and to comply in all respects with the permit and with applicable laws and <br />regulations governing reclamation, even though the actual cost thereof may <br />substantially exceed the amount of this bond." The Principal in this instance is Basin <br />who DRMS knows has no revenue or assets with which to pay any amount over the <br />amount of the actual bond and that Basin claims to be a judgment proof debtor. DRMS <br />has now been placed on formal notice that there are no funds over and above the actual <br />amount of the reclamation bond to pay for any reclamation debt exceeding $173,000.00. <br />It is glaringly clear that DRMS is ignoring the federal law requirements. I have <br />attempted to be civil in my ongoing discourse with DRMS and OSM regarding the issue <br />of Basin Resources' failures to comply with both Colorado and Federal regulations, <br />however Mr. Berry's July 26, 2007 letter leaves me somewhat amazed, frustrated, and <br />quite frankly, angry. Basin Resources, Inc. HAS NOT PROVIDED THE REQUIRED <br />LIABILITY INSURANCE COVERAGE. BASIN RESOURCES, INC. IS NOT THE <br />VALID PERMITTEE. <br />£'d L99ti-L£6-C LL wn}sl uuV dL9:Z0 LO LO 6nV