2010-03-12_ENFORCEMENT - M1981185

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-2- WHEREAS, in the application for the permit, the Operator has agreed with the Board to provide for reclamation of the Affected Lands that are now, or may become, subject to the permit, as required by law. WHEREAS, the Board has determined, in accordance with the Act, that the estimated costs of reclamation of the Affected Lands are those amounts for the stated periods of time as set forth herein. Said amount may be amended from time to time to reflect revised estimates of said costs of reclamation. WHEREAS, the Operator, in accordance with the Act, has promised and hereby promises the Board that it will be responsible for all the estimated costs of reclamation with regard to the Affected Lands. WHEREAS, the Board has determined that the Financial Warranty by the Operator equals the estimated costs of reclamation, as approved by the Board, with regard to the Affected Lands. WHEREAS, as proof of its financial responsibility, the Operator has proceeded pursuant to Section 34-32-117(3)(a)(III) of the Act and has caused the Frst Na*-' Bank of Durango , State of Colorado (the "Bank„) to issue a Certificate of Deposit, No. 2- 39 3 dated 12. - I . 20M payable totheBoard in the amount of Twenty Seven Thousand Three Hundred Twenty Eight Dollars ($ 27.328.00 )!$7e life of the mine or the period from 12 . 1 • zoo ') through t2 - I • ?A b . and has delivered it to the State, to be held by the State as proof of the Operator's financial responsibility under this Financial Warranty. The Bank is not a party to this agreement. Its obligations are set forth in its Certificate of Deposit. Nothing in this Financial Warranty diminishes or qualifies the Bank's obligations under its Certificate of Deposit. . NOW, THEREFORE, the Operator is held hereby firmly unto the State of Colorado in the amount of those sums for those periods of time as set forth herein, until this Financial Warranty is amended or released in accordance with applicable law. The Board may, for good cause shown, increase or decrease the amount and duration of this Financial Warranty. The Operator shall have sixty (60) days after the date of notice of any such adjustment to fulfill all new requirements. The Operator shall notify the Board immediately of any event which may impair this Financial Warranty. If the Board receives such notice, or otherwise has reason to believe that this Financial Warranty has been materially impaired, it may convene a hearing in accordance with the Act for the purpose of determining whether impairment has occurred. The obligation of the Bank shalt continue until released in writing by the Board in accordance with applicable laws specifying Financial Warranty release procedures. In the event of forfeiture, the Board shall present a Board Order for payment of the Certificate of Deposit to the Board. No other condition precedent need be fulfilled to entitle the Board to receive the amount of any such Certificate. However, if, upon completion of such reclamation by the Board, the cost of reclamation shall be less than the amount received from the Bank, the excess shall be promptly refunded to the Operator. The obligation of the Operator shall continue until the Board has released this Financial Warranty, or has ordered it forfeited in accordance with applicable provisions of the Act. It is understood that periods of years may necessarily be required before determination can be made that reclamation of the Affected Lands has been satisfactorily completed. It is also recognized that, as reclamation is accomplished, the amount of this Financial Warranty may be reduced with the approval of the Board so that it reflects the then current estimated cost ofthe remaining reclamation of the Affected Lands. No revision, extension, or renewal of the permit or of the time allowed to complete reclamation shall diminish the Operator's obligation under this Financial Warranty.