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06128/2007 15:27 9702475104 DMG DURANGO OFFICE PAGE 04108 <br />1 <br />JUN 2 8 2001 <br />Division of Reclamation. <br />Mining and Safety <br />- 3 - <br />The Board may present drafts upon the Bank for payment under the Letter of Credit if the Board determines <br />that reclamation which ought to have been perforroed by the Operator, or its successors or assigns, re - airs <br />unperformed. No other condition precedent need. be fulfilled to entitle the Board to receive the amounts of such for drafts. However, if, upon completion of such reclamation <br />excess ?hal?behpxomptly refunded to the eOp loon <br />shall be less than the amount received from th <br />If or to the extent that the Bank shall cancel its Letter of Credit and such assurance shall not concuffently be <br />reduced to a cash deposit as substitute assurance, rd equal to amount of the Letter of Credit which has <br />assurance, in. form and substance approved by the Boa t <br />been. so canceled and not reduced to a cash deposit. <br />With the prior consent of the Board, which consent shall not be unreasonably withheld, the Oper*or may <br />from time to time change the Bank whose Letter of Credit is held by the State as assurance or alter for its <br />assurance of financial responsibility held by the State for the faithful perform?c?Y t <br />obligations hereunder; provided that at all times theme shall be in. existence and delivered to the Board such. <br />assurance or other evidence of financial responsibility as shall be required by applicable laws and t'egulations of <br />the State of Colorado and as shall be, in form and substance, approved by the Board, or the Division. <br />The obligation of the Operator shall continue until the Board has released this Financial Warranty or has <br />ordered it forfeited in. accordance with'applicable provisions of the Act. It is understood that periods of years <br />may necessarily be required before determination can be made that reclamation of the Affected Lands has been <br />satisfactorily completed. It is also recognized that, as reclamation is accomplished, the amount of this Financial <br />Warranty may be reduced with the approval of the Board so that it reflects the then current estimated cost of the <br />remaining reclamation of the Affected Lands. No revision, extension, or renewal of the permit or of the time <br />allowed to complete reclamation shall diminish the Operator's obligation under this 'Financial Warranty. <br />In any single year during the life or the permit, the amount of the Financial Warranty shall not exceed the <br />estimated cost of fully reclaiming all lands to be affected. in said year, plus all lands affected in previous permit <br />years and not yet fully reclaimed. Reclamation costs shall be computed with reference to current reclamation <br />costs. <br />The amount of this Financial War my is based upon estimates as to the cost o frecl amation, and does not <br />operate to liquidate, limit, enlarge or restrict the Operator's obligations to complete the reclamation, even though <br />the actual costs thereof may substantially exceed the amount of this Financial Warranty. <br />This Financial Warranty shall be subject to forfeiture whenever the Board determines that anyone or more of <br />the following circumstances exist: <br />l_ A Cease and Desist Order entered pursuant to Section. 3432-1.24 of the Act has been <br />violated, and the corrective action proposed in such Order has not been completed, although ample time to have <br />done so has elapsed; or