1995-10-03_GENERAL DOCUMENTS - C1981017

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1 Cheryl A. Linden r+' October 3 , 1995 Page 4 to Minerals, who would use the funds to repay Sanwa' s new loan. More precisely, we anticipate that Minerals' right to these distributions would be pledged to Sanwa, and the Creditors' Trust would pay Minerals' distributions directly to Sanwa. I would note that the DMG previously has filed litigation asserting that Minerals should be held liable for the reclamation of MCR' s property. Minerals has denied any liability, and its position has been sustained by the trial court . While Minerals continues to deny any reclamation liability, it now is offering to borrow money to fund the completion of the reclamation project . Sanwa has made it clear that while the new loan should be secured by Minerals' subrogated Plan distributions, Minerals will be required to repay the loan through other means in the event that those distributions do not permit repayment of the loan. I view this as a significant contribution by Minerals to the resolution of the reclamation controversy. Harmonizing Reclamation Plan with Post-Mining Uses Since Sanwa' s new loan will be repaid, at least in part, from sales of MCR' s property to third parties as reclamation is completed, loan approval by Sanwa will require Minerals to demonstrate that the expenditure of the loan proceeds for reclamation and development work will in fact put the property into saleable condition. Accordingly, it is necessary to harmonize the approved Reclamation Plan for the Preparation Plant Tract with the likely post-mining uses of the parcel . This does not require substantial modifications of the Reclamation Plan, and in fact the points which need to be discussed are perhaps better characterized as clarifications than as modifications . We also anticipate that Sanwa' s loan approval will be conditioned on a specific allocation by the DMG of certain funds to the reclamation of the Preparation Plant Tract, with a projected timetable for completion. This would insure that the property subsequently could be sold to third parties . Similarly, it will be necessary to allocate funds from the Class 6 environmental fund to specific environmental tasks, including water quality monitoring under NPDES permits . I am enclosing a memo from Diane Delaney dated September 8 , 1995, discussing in detail the proposed post-mining uses of the properties contained within the permit area covered by the DMG' s Permit C-81-017, and outlining the clarifications to the reclamation plan which would harmonize the plan with the contemplated post-mining uses of the property.