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• • <br />p4,, F,wT OFEW <br />C P . ~' f„C <br />U.S. Department of Energy <br />t ~ GrandJunclionOffice <br />~i~~,-~ 2597 B 3/4 Road <br />Grand Junction, CO 81503 <br />EEB 17 598 <br />RECEIVED <br />Mr. Tom Gillis <br />Colorado Department of\~atural Resources F[ ~ :~ <br />Division of Ainerals and Geolo~v <br />484 Turner Drive Division of Minera158Geology <br />Building F, Suite 101 <br />Durango; CO 81301 <br />III IIIIIIIIIIIII III <br />999 <br />PUBLfr P_~~ GC3PY <br />PILE: M-~3-3~-2 <br />SITE: FGC;sor, Mane; <br />Received <br /> <br />D'Jr3n0~ PiEl;i G:rL'4 <br />Divlsicn GI f::L9f2`m a Gco!oc~y <br />Subject: T~tety Leaseholder for DOE Lease Tracts C-JD-~; C-SR-13, and C-SR-I i <br />Dear Air. Gillis: <br />This is in response to your letters to Ms. Dorothy Blake and Mr. Joe Baldwin, dated <br />February 5, 1998, concerning Colorado Division of Minerals at~d Geology (DMG) Permits <br />I\'o. M-77-248 (C-JD-d Mine) and i\Q-78-342 (Ellison Mine; C-SR-13), respectively. <br />Please be advised that all rights, title, and interest in the subject ]ease tracts, on which the hvo <br />referenced permits are located, have been recently assigned from Telluride Mining Company, <br />Inc., to Gold Eagle Mining, htc. (GEMI). This assi~mnent ryas approved by the U.S. Department <br />of Enersy (DOE) on February 6, 1998. These assigmnents also transfen~ed all reclamation <br />liabilities associated tvitlt the three lease tracts to GEMI. GEA4T, as part of the assigtunent, <br />provided DOE with an in•evocable letter of credit for 580,000 (aggregate sum) to cover the <br />reclamation liabilities that exist on the three lease tracts (547,000 for C-,iD-S, 522,000 for <br />C-SR-] 3, and 511,000 for C-SR-15). <br />DOE requires a single surety (perfottnance bond; letter of credit, etc.) per ]ease tract. This surety <br />is all encompassing and covers the reclamation of all envirotmtental disturbances existing on the <br />lease tract as a result of the leaseholder's (or prior ]easeholder`s) mining and exploration <br />activities. Each ]ease agreement specifies the amowrt of surety required for that particular ]ease <br />tract. This amount can increase to cover new or expanded operations. or decrease as operations <br />cease and sites are reclaimed. Each lease agreement also requires the leaseholder to comply with <br />all applicable statutes a~td regulations, including those required by Colorado DMG. <br />The i~7evocable letter of credit provided by GEMI will be held by DOE until it is either replaced <br />with another surety of equal value; or the reclamation activities covered by the surety are <br />performed to the satisfaction of all applicable federal and state agencies. <br />On the basis of the aforementioned lease assigmnents and DOE~s receipt of GEl`41's iiTevocab]e <br />letter of credit. DOE is in the process of releasing all precious leaseholders and other entities <br />