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the Office of Surface Mining Reclamation and Enforcement (the <br /> "OSM" ) . <br /> The Act provides for regulation of mine sites by the <br /> Colorado Department of Natural Resources, Division of Minerals and <br /> Geology (formerly the Mined Land Reclamation Division; hereinafter <br /> the "Division" ) , reporting to the Colorado Mined Land Reclamation <br /> Board (the "MLRB" ) . <br /> In order to obtain a mine operating permit, a mine <br /> operator is required to submit to the Division a reclamation plan <br /> meeting the requirements of the Act. A mine operator is further <br /> required to provide a performance bond to the Division, in an <br /> amount sufficient to assure the completion of the reclamation plan <br /> if the work had to be performed by the MLRB following forfeiture by <br /> the operator. The bond is to be backed by a surety, except that <br /> the Division shall accept the bond without a separate surety when <br /> the applicant demonstrates to the Division's satisfaction that the <br /> applicant has the financial means to self-bond for reclamation. <br /> In the Debtor's case, the bond was fixed by the Division <br /> in the amount of $3,000,000. The bond is not backed by a surety. <br /> Instead, the Debtor provided proof of financial responsibility in <br /> the form of a deed of trust on a rockdust plant owned by the Debtor <br /> (the "Rockdust Plant" ) . Current estimates of value by both the <br /> Debtor and the Division indicate that the Rockdust Plant has a <br /> liquidation value far below the amount of the Debtor's bond. In <br /> January 1994, the Debtor received an offer to purchase the Rockdust <br /> Plant for $410,000. The Debtor also has received recent <br /> expressions of interest from other prospective purchasers in <br /> purchasing the property at a moderately higher price. Subject to <br /> approval of the MLRB, the Debtor anticipates submitting an offer <br /> for Court approval in February 1994, with a closing to occur in the <br /> Spring of 1994. <br /> Revocation of the Debtor's mining permit. The Act <br /> permits the Division to seek revocation of a mine operating permit <br /> when the Division believes that there is a pattern of violations of <br /> permit conditions. In 1991, the Division alleged a pattern of <br /> violations and sought revocation of the Debtor's permit. Rather <br /> than risk loss of the permit at a time when it was attempting to <br /> sell the Mine, the Debtor entered into a consent order with the <br /> MLRB in May 1991. The consent order required the Debtor to find a <br /> buyer by January 23, 1992 and, in the absence of such buyer, gave <br /> the MLRB the right to proceed with revocation of the Debtor's <br /> mining permit without objection by the Debtor. If no purchaser was <br /> found, the existence of a mining permit would be moot. On the <br /> other hand, if a purchaser was found, a transfer of the permit <br /> would need to be approved by the Division, and issues related to <br /> regulatory compliance then could be negotiated between the Division <br /> and the new operator. <br /> 13 <br />