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%'Y 1 -S ~ _. III III III III IIII III STATE OF COLORADO DIVISION OF MINERALS AND GEOLOGY ncp, rtmrm of Nalu ral Rc~ourcec I~~~~~ I } I } tihcrman SI , Roum ? I S ncnvcr, Colorado RO_'ll i I'I~unr 14U JI OLfi-15L7 I n\:1}041 R)2~H1 OL DEPARTMENT OF NATURAL DATE: November 6, 1995 RESOURCES Roy Romer Gorernor TO: Steve Brown lames lu<hhead ~.er~~~~e om•cm~ FROM: Christine Johnsto n,l~haol u. lrnp u~,~~~~~n n r~~ ~,~, RE: O.C. 1f2 Coal Mine; Permit No. C-80-002 The Division will soon be in a situation in which we forfeit the bond or return money back for reclamation completed at the O.C. ~2 Coal Mine. The mine is located in Gunnison County, about 17 miles to the north of the town of Gunnison. It was an underground mine with approximately 3.2 acres of disturbance and is operated by Mr. Bob Weaver. Reclamation of the site was supposed to completed by November 1, 1995, but was not completed. we will proceed with issuing a NOV, but our next actions will be dependant on the operator. Mr. Weaver expressed to me a few weeks ago that he would like us to forfeit the bond. We have identified an alternate option, which would extend the completion of reclamation to the spring of 1996 (see attached). Mr. Weaver has not made a final decision. My question for you is in regards to the bond instrument. Previously, the Division was holding a Letter of Credit (LC) for $36,000.00. On October 28, 1992, the First National Bank of Gunnison notified the Division that they were not going to extend the LC past the maturity date. The operator did not submit a replacement bond, so on December 29, 1992, we drew on the LC and now hold a cash bond for $36,000.00. I have enclosed this correspondence for your review. Given this situation, do we have a relationship with the bank that would require or allow us to offer them the opportunity to reclaim the site and avoid forfeiture (Rule 3.04.2(5))? In addition, if we do forfeit the bond and complete reclamation and there is money left over, do we return that money to the bank or to Mr. Weaver? Also, if Mr. weaver were to reclaim the site and he receives bond release, do we return that money to the bank or to Mr. Weaver? I presume that Mr. Weaver had to post some sort of collateral to receive the LC. That collateral may have became invalid, and the bank decided not to extend the LC. To answer the question of who receives the money in the event of bond forfeiture or bond release, we need to determine if Mr. Weaver's debt is still outstanding with