_GENERAL DOCUMENTS - C1981017 (252)

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d Stephen W. Seifert January 13, 1993 Page 6 which, with interest, total about $255,000. At the tax sales, there were no purchasers for the property. This reflects the reality that tax sale purchasers do not wish to purchase property which is subject to environmental problems. Lacking a purchaser, the property was "stricken off" to Pitkin County, meaning that the county holds the certificate of purchase. This presents an opportunity. Pitkin County is realizing nothing from property which has been' stricken off to it. Moreover, Pitkin County has an interest in seeing that the reclamation of the mine site is carried out. Assuming that Sanwa and the unsecured creditors would agree to the granting of a senior lien to the MLRD to augment its security for reclamation expenses, it might be possible to condition such agreement on the sale of Pitkin County's tax sale certificates to a third party (perhaps Sanwa) at a deep discount. This would permit a portion of the value traded to the MLRD to be absorbed by savings in the payment of real estate taxes which otherwise occupy the senior lien position. Liquidation summary Assuming (i) that Resources realizes 90% of the asking prices indicated by brokers as set forth above, (ii) that a 7% brokerage fee is paid on real property sales, and (iii) that the net from equipment is $2 million, and (iv) that reclamation costs can be held to $1.75 million, a current estimate of liquidation value compares as follows to the liquidation estimates which were set forth in my July 28, 1992 letter to Messrs. Seifert and Wolf: July 28 letter Today Equipment $3-3,500,000 $2,000,000 Mine site 1-1, 800, 000 2,088,000 Carbondale industrial park 5-800,000 936,000 Fabrication shop 3-500, 000 300,000 Coke oven tract 150-200,000 150,000 160 acre tract 100-160, 000 160,000 Unit train loadout site (not included) 300,000