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NOV 29 '96 09:10AM DIV/MINERALS&GEOLOGY P.4/5 <br /> Mr_ Michael S. Mottice- <br /> Mr. Gregg R. Squire <br /> November 21, 1996 <br /> Page - 3 <br /> the DMG for Mid-Continent Resources Quarry reclamation, $2 , 500 in <br /> the form of a Certificate of Deposit payable t4 the DMG for <br /> reclamation of the Marblehead Quarry. considering that the Rock <br /> Dust plant was pledged by Deed of Trust and Surety Agreement to <br /> provide reclamation bonding for the Mid-Continent Quarry, and the <br /> liquidation of this property with proceeds paid to DMG, DMG could <br /> consider allocation of a part of this money to the Mid-continent <br /> Quarry reclamation equal to the amount for which the Limestone <br /> Plant was pledged; that is, the deficiency of $6,213 . <br /> If DMG is unwilling to make this allocation, then the <br /> following approach is suggested: <br /> Amount held by DMG $ 7,000 . 00 <br /> Certificate of Deposit on <br /> Marblehead Quarry, to be <br /> assigned to Mid-Continent <br /> Quarry reclamation on transfer <br /> of Marblehead Quarry to County, 2 , 500 . 00 <br /> Pitkin Iron would pay Mid-Continent <br /> $3, 713 to make up the deficiency, <br /> which Mid-Continent would pledge <br /> by way of a Certificate of <br /> Deposit to the Mid-Continent Quarry <br /> reclamation Account. <br /> Amounts in excess of the $13 , 213 directed by the DMG to <br /> be posted would be made up from an allocation out of the $0 . 75 <br /> per ton royalty to be paid by Pitkin Iron for limestone materials <br /> removed from the Quarry, <br /> In this connection, our investigation indicates that <br /> the usual royalty for gravel in this locality is $0 .50 per ton. <br /> The only comparable royalty I have located charged by BLM on <br /> limestone under similar circumstances was through Pete Lien <br /> Sons of Rapid City, South Dakota, who agreed to a compromise <br /> settlement of $0 .46 per ton. <br />