_GENERAL DOCUMENTS - C1981017 (249)

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FROM :NRTURRL RESOURCES SEC. 303 866 366E 1996,12-13 14:36 #712 P.06/07 Cheryl A. Linden December- 13, 1995 Page 3 The answer is that the loan authorization did not assume the prior receipt of the proceeds from the land exchanges. The whole point was to free reclamation funding from the timing of property sales. Accordingly, the loan from Sanwa would be "up toh $2 million. If the land exchanges aloeed prior to drawing the Sanwa loan up to the full $2 million amount, it would riot be necessary to draw the loan to the full amount. At this point, MCR is proceeding with a smaller loan which will ba used to complete Bankruptcy Plan distributions to Class 9 general unsecured creditors. This loan is occurring in accordance with Section 6.7 of the Bankruptcy Plan, which permits funds to be advanced to MCR or the Creditora' Trust to make any distvibution provided under the Plan. The lender is then aubrogated to the position of the Class I creditors to the extent of funds advanced (thus, all that occurs is a substitution of'a new lender for the Class 9 Claims that have been satisfied, and there is n4 prejudice to other classes of creditors) . ,Allegad Pollution of the Mine site your letter states that Othere is reason to believe that (the facilities area] may be polluted with volatile organic compounds, " and that the M; must determine the extent of r0quiied remediation of that area prior to considering any plan to develop that area. MCR believes that the mine site is not polluted with volatile organic compounds, at least not in a degree that would prevent prompt remediation and development of the property. if the DMG has any information regarding alleged pollution of the site, I would ask that such information be provided to MCR. In the meantime, MCR is engaging an environmental specialist to assist in evaluating any environmental hazards at. the mine site. Credit for Pre-Cc►afirmation Reclamation Work Your letter notes that the Creditors' Trust has requested that the DMG agree on the credits to be given for reclamation work performed prior to confirmation of the Bankruptcy Plan. You respond by stating that it is difficult to dome to an agreement on this issue due to pending litigation between the DMG and Pitkin Iron Corporation concerning Pitkin's administrative claim in the bankruptcy case, which mostly concerns the cost of pre-confirmation reclamation work. MCR recognizes that any agreement regarding credita for pre-Confirmation reclamation activity is tied to the pending administrative claim of Pitkin iron Corporation and the DMG's 'd dK)E53f 18 tWIM Wd8P:21 S6, ti 03d