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STATE OF COLORADO <br />DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3567 <br />FAX: (303) 832-8106 <br />16 September 2010 <br />11-1 <br />COLORADO <br />D I V I S 10 N O F <br />RECLAMATION <br />MINING <br />SAFETY <br />Bill Ritter, Jr. <br />Governor <br />Mr. Randy Whicker <br />Mike King <br />Health Physicist / RSO Executive Director <br />Cotter Corporation <br />Loretta E. Pineda <br />P.O. BOX 1750 Director <br />Canon City, CO 81215 <br />f ? <br />RE: Schwartzwalder Mine; DRMS Permit No. M-1977-300; Notice of a Reason to Believe a <br />Violation Exists at the Schwartzwalder Mine <br />Dear Mr. Whicker: <br />On 11 August 2010, the Mined Land Reclamation Board (Board) issued a Finding of Fact, Conclusion <br />of Law, and Order (Board Order), a copy of which is attached, for the Enforcement Hearing conducted <br />on 12 July 2010. The Board Order contained four Corrective Actions, numbers 2 and 3 of which were <br />to be implemented by 31 August 2010. To this date, Cotter Corporation has failed to comply with <br />Corrective Actions Number 2 and 3 of the Board Order. Additionally, the Board ordered Cotter to pay a <br />fine of $55,000 with all but $2,500 suspended if Cotter complied with the Corrective Actions. To this <br />date, Cotter has not paid the fine due. <br />The Operator has failed to comply with a Board Order. The Division of Reclamation, Mining, and <br />Safety believes that this is a violation of: <br />• § 34-32-124 C.R.S. for Failure to comply with the conditions of an order, permit, or <br />regulation. <br />In addition, the Division believes that it is a violation of the Minerals Rules and Regulations of the <br />Colorado Mined Land Reclamation Board for Hard Rock, Metal and Designated Mining Operations for: <br />• Failure to comply with Rule 3.3.2 - Operating with a permit or exploring with a notice of <br />intent - failure to comply. <br />Therefore, we have reason to believe that a violation exists to DRMS File Number M-1977-300 and to <br />the Law, and have scheduled this matter to appear before the Mined Land Reclamation Board. <br />An Enforcement Hearing will be held during the 17-18 November 2010 Board Meeting for <br />consideration of a possible violation. The hearing will be held in Room 318 of 1313 Sherman Street, <br />Denver, Colorado, beginning at 9:00 a.m. on 17 November 2010 or as soon thereafter as the matter can <br />be considered. At that hearing you will have the opportunity to be represented and heard. It will be <br />reiterated that there is reason to believe that you are in violation of the provisions noted above. <br />Office of Office of <br />Mined Land Reclamation Denver • Grand )unction • Durango Active and Inactive Mines