_GENERAL DOCUMENTS - C1981017 (139)

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operations at the Mid-Continent site. However, it is inaccurate to make the blanket assumption that reclamation is not being conducted at the site. The first steps in the reclamation process are progressing at the mine. Structural demolition is being conducted, with the approval of the United States Bankruptcy court, as a first step in the reclamation progression. This is a vital first step because the ability of the permittee to perform the remaining reclamation obligations is directly dependent upon the infusion of cash to the bankrupt estate. The capital which will be utilized by the company will be provided by sales from the salvage operations. As each mine entry is cleared of materials and backfilled, reclamation of the entry area and the associated road will be completed. Although this process may be slow, reclamation is, in fact progressing as contemporaneously as practicable. The practicability of achieving site reclamation must also be viewed in terms of the realities of the United States Bankruptcy code. In a very tangible way, the assets of the operator have been frozen by the bankruptcy court. The operator cannot expend monies for any purpose, including reclamation, without the consent of the court. Although the State has been successful in ensuring that some money from equipment sales was utilized for maintenance and limited reclamation work, the bulk of reclamation work at the site, excepting structural demolition and equipment salvage is currently precluded by court order by virtue of the fact that the permittee is disallowed from expending monies until the bankruptcy proceeding is concluded. As you are aware, the State of Colorado has been continuously involved in the bankruptcy proceeding. The Court is currently developing a liquidation plan which will address funding of the reclamation plan for this mine. The State attorney's have been active in trying to secure funds so that reclamation of the entire site may be comprehensively addressed. Issue four of the TDN also is one of contemporaneous reclamation. Issue four cites a failure to reclaim portions of an old stream crossing on the NO. 5 mine road. For the reasons stated above, it has not been practicable to contemporaneously reclaim this disturbance to date. However, pending the outcome of the final bankruptcy order, DMG has been informed by Mid-Continent that the Number 5 Mine area will be reclaimed this season. Reclamation of the stream crossing will be accomplished in conjunction with reclamation of the pad areas as the reclamation project proceeds down the road away from the entry area.