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STATE OF COLORADO DIVISION OF RECLAMATION, MINING AND SAFETY Department of Natural Resources 7313 Sherman St., Room 215 Denver, Colorado 80203 Phone: (303)8663567 FAX: (303) 832-8106 April 16, 2007 Mr. Greg Gerganoff Alpine Rock Co, 14802 West 441° Ave. Golden, CO 80403 / v RE: Swan River Resource; Permit No. M-1993-035 Alpine Rock Company; Legal Right of Entry Deaz Mr. Gerganoff, COLORADO DIVISION OF RECLAMATION MINING - &- SAFETY Bill Ritter, 7r. Governor Harris D. Sherman Executive Direttor Ronald W. Cattany Division Director Natural Resource Trustee The Division of Reclamation, Mining and Safety (Division) received your letter on October 31, 2006 regazding the outstanding issues noted by the Division during the August 2, 200 }77spection, The Division will respond to the letter in the order presented in your letter. ,,// 1. Legal Right of Entry; The Alpine Rock Company (ARC) 112 permit application submitted to the Division in 1993 contains a lease agreement between French Gulch Mines Ino. & B&B Mines, Inc. and ARC granting permission to enter and mine on site. The lease was granted for a period of 5 years, and included the right to enter into negotiations for a new Lease Agreement. It was noted during the Division's inspection of the Swan River site that Everist Materials, LLC ("Everisf~ was mining within the permit boundaries of the Swan River site. Upon further review of both permit files, it appears that Everist holds an overlapping mining permit in Sections 24 and 25, Township 6 South, Range 77W (lmown as the Mascot Placer, Permit No. M-1998-052), The total acreage of the Everist Mascot Placer is 89 acres (within the 352 acres pemutted by ARC). With two overlapping permits the question becomes which entity has the legal right to enter to mine and reclaim the site. From the correspondence in the files, it appears that the current property owner for a portion of the site is Rock Island Land Co. and Everist has the right to mine and reclaim on the 89 acres noted in the permit. It also appears that French Gulch Mines, Inc. & B&B Mines, Inc. aze no longer the property owners of the site (as noted in the original lease agreement with Alpine Rock), and thus the lease noted in the Alpine Rock file is no longer valid. With the lease in question, the Division requested ARC to provide documentation of their legal right to enter the site to conduct mining and reclamation operations. From the correspondence provided by ARC on October 31, 2006, it is acknowledged that the property was transferred from B & B Mining to Summit County and the Town of Breckenridge. Section 34-32.5-112(1)(c)(II), (III) and (I~, C.R.S and Rule 6.4,14 of the Construction Material Rules and Regulations require an applicant to provide the source of the applicant's legal right to enter and initiate a mining operation on the affected land in regazd to all owners of record. In addition, the Performance Warranty signed by ARC on 9/29/1993 states that ARC has the lawful authority to enter upon the Affected Lands to conduct mining operations, including, but not limited to, reclamation. Under case law, the Division and MLRB do not have the authority to adjudicate property rights. However, the Division must give meaning to and implement the language of the Construction Materials Act. As to permit applications, the Division has implemented the legal right of entry provision by requiring a permit application to show cleaz a legal right of entry or the Division may deny the permit application. The Division's position gives meaning to the statutory and regulatory requirement regarding legal right to enter without entering the adjudication of property rights. If there is a dispute or ambiguity as to an applicant's legal right to enter, the applicant must resolve it in court Office of Office of Mined Land Reclamation Denver • Grand Junction Durango Active and Inactive Mines