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C S M B <br />HUDSON'S BAY CENTRE <br />1 600 STOUT STREET, SUITE 1 700 <br />DENVER, COLORADO 80202 <br />MAIN LINE: 303.893.1815 <br />FACSIMILE: 303.893.1829 <br />June 8, 2012 <br />BY EMAIL <br />David Berry <br />Director, Coal Regulatory Program <br />Colorado Division of Reclamation, Mining and Safety <br />1313 Sherman St. Room 215 <br />Denver, Colorado 80203 <br />Re: Correspondence from Jim R. Guire II dated May 16, 2012 <br />Dear Mr. Berry: <br />CARVER SCHWARZ MCNAB & BAILEY, LLC <br />CHRISTOPHER M. KAMPER <br />CKAMPER @CKSMB.COM <br />This will respond to the complaint you received by email from Mr. Guire. He is a <br />principal of 4/7, LLC, a Colorado limited liability company which has recently acquired a parcel <br />of land (the "Property" as further defined below) in Montrose County within the current permit <br />area of Western Fuels — Colorado, LLC ( "Western Fuels- Colorado" or "WFC "). In the <br />complaint, consisting of an email and several attachments, Mr. Guire expresses the view that the <br />Mining Lease under which Western Fuels- Colorado claims a right of entry to the property is no <br />longer valid. In support of his claims, he attaches copies of the original 1956 Mining Lease <br />(between San Miguel Power Association, as Lessor, and Edna Coal Company, as Lessee) and <br />several addenda, amendments, releases, and other documents pertaining to that lease. He does <br />not provide any argument in support of his interpretation of those documents, but instead <br />provides a 1 -page document with the language that he considers relevant highlighted, <br />accompanied by limited discussion in his email. <br />Western Fuels- Colorado's response to this complaint is that it fails to present a valid <br />construction of the Mining Lease, and the claim that the Mining Lease has expired is absurd and <br />legally frivolous. It is inaccurate as an interpretation of the plain language of the relevant <br />documents and is completely at odds with the unbroken conduct of the parties extending from <br />the present day back to 1956, during which (with the exception of Mr. Guire's complaint) the <br />Lessee has engaged in continuous mining activity on and near the Property without complaint or <br />dispute by Lessor. Over the course of that time, the Lessee has paid the Lessor more than <br />$746,000 in royalties — most of which after April 30, 1993, the date Guire identifies as the <br />expiration date of the Mining Lease — all of which were accepted by Lessor. <br />{00103813.1 } <br />