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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 />July 7, 2011 <br />Mr. Christopher L. Varra <br />Varra Companies, Inc. <br />8120 Gage Street <br />Frederick, CO 80516 <br />Re: File No. M- 2010 -049, Western Sugar Reclamation Land Development Project, 112c Decision Letter - <br />Conditions, Financial and Performance Warranty Request - Construction Material Operation <br />Dear Mr. Varra: <br />On July 7, 2011, the Division of Reclamation, Mining and Safety approved your 112c mining permit application. The <br />conditions to the approval are noted below: <br />Committment No. Description <br />1. <br />Stipulation No. Description <br />STATE OF COLORADO <br />COLORADO <br />D I V I S I O N O F <br />RECLAMATION <br />MINING <br />— &— <br />SAFETY <br />John W Hickenlooper <br />Govemor <br />Mike King <br />Executive Director <br />Loretta E Pineda <br />Director <br />Varra Companies, Inc. shall request in writing to the Division of Reclamation, Mining and <br />Safety (DRMS) that the financial warranty be increased prior to opening additional phase(s). An <br />increase of the financial warranty shall be requested, and provided with the letter to the DRMS, <br />by Varra Companies, Inc. to its bonding/surety provider prior to opening and mining additional <br />phase(s). The increased financial warranty and updated bond forms shall also be provided to the <br />DRMS from Varra Companies, Inc. bonding surety provider. The DRMS will process the <br />request to increase the financial warranty under a Surety Increase (SI) revision. <br />Prior to affecting land in Tract C and Tract D, Varra Companies, Inc. shall submit and obtain <br />approval of a Technical Revision addressing a flood analysis and flood control plan for the <br />Western Sugar Reclamation Land Development Project. <br />The amount of financial warranty set by the Division for this operation is $127,210.00. You must submit a financial <br />warranty in this amount and a performance warranty in order for us to issue a permit. In the event you have requested a <br />financial warranty form, we have enclosed it in this letter. If you have not, please select a type of financial warranty from <br />Rule 4.3. Then contact us so that we can provide you with the appropriate warranty form. We have enclosed a <br />performance warranty form with this letter for your use. <br />Office of <br />Mined Land Reclamation <br />Office of <br />Denver • Grand Junction • Durango Active and Inactive Mines <br />