1998-02-20_REVISION - M1977248

• Permit No: M1977248
• IBM Index Class Name: Revision
• Doc Date: 2/20/1998
• Doc Name: Financial Warranty Increase
• From: DMG
• To: DMG
• Type & Sequence: SI1
• Media Type: D
• Archive: No

` OFFICE
•
` DIVISION OF MINERALS AND GEOLOGY
Department of Natural Resource
1313 Sherman SL, Room 215
Denver, Colorado 80203
Phone: 13031 8h8-356~
FA%: [phone]
STATE
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MEMO S~- ~
DATE: February 20, 1998
TO: Barb Chiappone
FROM: Tom Gillis ~pG
RE: Financial R'arranty increase f r C-JD-S Mine. Vermit Tlo. Nf-77-248
Roy Rome.
Govcmor
lams $, lachhe.C
Eai¢v[ive Dirermr
Michael 8. Lung
Division Director
As you know, we have been working on resolving an inadequate financial warranty issue for the
above referenced operation. The matter is scheduled for the February 25-26 boazd meeting for
consideration of enforcement action against the current permittee, Blake Mining Co., for failure to
increase the bond from the existing amount of $2,650.00 to a recalculated amount of $21,865.00.
~ During this last summer & fall, Telluride Mining Co. attempted to succeed to the permit, but the
SO was denied after they were not able to come up with the bond money. In recent weeks, a new
operator, Gold Eagle Mining, Inc., has initiated the S.O. process with DMG and in addition has
completed obtaining the DOE lease for the site and has also posted a $47,000.00 Irrevocable
Letter of Credit with the DOE. The DOE has acknowledged to DMG in writing that Gold Eagle
Mining, Inc. is the current valid DOE lease holder, and that the DOE financial warranty has been
accepted. The DOE has also indicated that the DOE bond covers reclamation activities, and that
the DOE lease agreement requires that the leaseholder comply with all applicable statutes and
regulations, including those required by the DMG. Additional information has been provided to
the DMG indicating that the entire permit azea for M-77-248 is within the DOE ]ease area.
As a result of the information & verifications provided to the DMG by the DOE and the operator,
it appeazs that we can now accept the use of the $47,000.00 DOE Financial Warranty in lieu of a
$21,865.00 DMG Financial Warranty (except for the 5100,00 cash bond minimum required by
DMG).
Please let me know how the Succession of Operator process is going, and whether we can have
everything wrapped up prior to the February 25-26 Boazd Meeting. If we can get the S.O.
finalized and obtain a $100.00 cash bond from Gold Eagle Mining, Inc., I can withdraw the
~ agenda item from the February Board agenda.
If you need any additional information please dive me a call. We should be able to release the
$2,650.00 CD to Dorothy Blake of Blake Mining Co. Once we approve the S.O.
/tdg
m248mem1_tdg