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remain unknown. Hence, the inferences and allegations in the report are speculative <br /> and unsubstantiated. <br /> OSM contacted three Colorado agencies (the Division of Minerals and Geology, <br /> Division of Wildlife, and Department of Health) to determine whether there have been <br /> any other studies of the Crystal River that might provide empirical measures of the <br /> extent and effect of previous discharges from the mine. These agencies reported that <br /> past and current investigations have produced results that are inconclusive at best. <br /> OSM and the Colorado Division of Minerals and Geology are currently evaluating <br /> whether additional studies would be worthwhile in view of the lack of recent mining <br /> activity and the State's revocation of the permit in an undated order issued pursuant to <br /> an August, 1992, proceeding. <br /> Inadequacy of Performance Bond <br /> Your letter notes that the State accepted what appears to be an inadequate security for <br /> the reclamation bond. Both OSM and the State agree that the current value of the real <br /> property previously accepted as collateral bond appears to be far less than its <br /> appraised value at the time of posting. Regrettably, since the permittee is now in <br /> bankruptcy, this situation cannot be corrected. Regardless of the advisability of the <br /> State's original acceptance of the property in question, Colorado cannot now obtain <br /> additional bond from the permittee. Nor could OSM obtain additional bond under the <br /> Federal takeover you request. <br /> Colorado has taken appropriate action to protect the State's interests during the <br /> bankruptcy proceedings and secure its claim to the bond. In addition, on September <br /> 17, 1993, the State filed suit in Pitkin County District Court requesting that the court <br /> order the principals and -agents of Mid-Continent Resources to either perform the <br /> required reclamation or furnish the State with the funds needed to do so. Should the <br /> State effort fail, or if the State fails to amend its suit to reflect the increased costs of <br /> the pending revisions to the reclamation plan, OSM will evaluate the merits of filing <br /> independent action in Federal court against these individuals. <br /> Failure to Forfeit Bond <br /> You state that, despite Mid-Continent's failure to adhere to the reclamation schedule <br /> set forth in the 1991 settlement agreement, Colorado has failed to forfeit the bond. <br /> On September 22, 1993, shortly after your letter was mailed, the State forfeited the <br /> bond. Therefore, regardless of the timeliness question, this issue no longer exists. <br /> OSM will continue to monitor Colorado's efforts to collect the collateral, an action <br /> complicated by the bankruptcy proceedings. <br /> 3 <br />