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STATE OF COLORADO <br />DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3567 <br />FAX: (303) 832-8106 <br />November 11, 2008 <br />COLORADO <br />D I V I S 10 N OF <br />RECLAMATION <br />MINING <br />SAFETY <br />Bill Ritter, Jr. <br />Governor <br />Harris D. Sherman <br />Mr. Darwin Derr Executive Director <br />Broken Arrow Investments, LLC Ronald W. Cattany <br />699 N. First Avenue Division Director <br />Greeley, CO 80631 Natural Resource Trustee <br />Re: File No. M-2008-017, Derr Pit, 112c Decision Letter - Conditions, Financial and Performance Warranty <br />Request - Construction Material Operation <br />Dear Mr. Derr: <br />On November 10, 2008, the Division of Reclamation, Mining and Safety approved your 112c mining permit application. <br />The conditions to the approval are noted below: <br />Stipulation No. Description <br />1 • Broken Arrow Investments, LLC shall request in writing to the DRMS that the financial warranty be increased <br />prior to opening an additional phase(s). An increase of the financial warranty shall be requested, and provided <br />with the letter to the DRMS by Broken Arrow Investments, LLC to its bonding/surety provider prior to opening <br />and mining an additional phase(s). The increased financial warranty and updated bond forms shall also be <br />provided to the DRMS from Broken Arrow Investments, LLC's bonding/surety provider. <br />The amount of financial warranty set by the Division for this operation is $49,132.00. You must submit a financial <br />warranty in this amount and a performance warranty in order for us to issue a permit. In the event you have requested a <br />financial warranty form, we have enclosed it in this letter. If you have not, please select a type of financial warranty from <br />Rule 4.3. Then contact us so that we can provide you with the appropriate warranty form. We have enclosed a <br />performance warranty form with this letter for your use. <br />PLEASE NOTE THAT MINING OPERATIONS MAY NOT COMMENCE UNTIL A PERMIT HAS BEEN <br />ISSUED BY THE DIVISION AFTER RECEIPT OF YOUR FINANCIAL WARRANTY AND PERFORMANCE <br />WARRANTY. A PERMIT WILL NOT BE ISSUED UNTIL WE VERIFY THE ADEQUACY OF BOTH YOUR <br />FINANCIAL WARRANTY AND PERFORMANCE WARRANTY. <br />If you have any questions, please contact me at (303) 866-3567, x8116. <br />Si'nJce?reely, <br />J , <br />Michael A. Cu gham <br />Environmental Protection Specialist <br />Enclosures <br />cc: Tony Waldron, DRMS <br />Office of Office of <br />Mined Land Reclamation Denver • Grand Junction • Durango Active and Inactive Mines