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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 />R <br />C O L O <br />O <br />Denver, Colorado 80203 D <br />I <br />N <br />Phone: (303) 866-3567 RECLAMATION <br />FAX: (303) 832-8106 MINING <br /> <br /> SAFETY <br />4 January 2011 <br />Bill Ritter, Jr. <br />Mr. Joe Kraig Governor <br />President Mike King <br />Pioneer Sand Company, Inc. Executive Director <br />P.O. Box 7650 Loretta E. Pineda <br />Colorado Springs, CO 80933-7650 Director <br />Re: Leyden Pit, Permit No. M-1983-139; Notice of Financial Warranty Increase SI-1 <br />Dear Mr. Kraig: <br />As a result of the inspection conducted on 24 February 2010 and a recalculation of the Financial Warranty, the <br />Division of Reclamation, Mining & Safety (Division) has increased the Financial Warranty for the Leyden Pit <br />mine to $577,335 in accordance with Rule 4.2.1 of the Mineral Rules and Regulations of the Colorado Mined <br />Land Reclamation Board for the Extraction of Construction Materials. This is an increase of $527,335 over the <br />currently held Financial Warranty of $50,000. The worksheets supporting the Financial Warranty increase <br />calculations are enclosed. <br />The amendment of the current Financial Warranty, or submittal of a new Financial Warranty reflecting the <br />increase, must be submitted to the Division within 60 days from the date of this letter, which will be 02 March <br />2011. If you wish to submit a different type of Financial Warranty, please contact Mary Rodriguez at 303-866- <br />3567 x8138 or Alysha Hernandez at 303-866-3567 x8125 so that the applicable form can be sent to you. <br />If you have any questions, you may call me at (303) 866-3567 x8108 or Tony Waldron at x8150. Questions <br />pertaining to the financial warranty should be directed to Ms. Rodriguez or Ms. Hernandez. <br />Sincerely, <br />David Bird <br />Division of Reclamation, Mining and Safety <br />cc: Tony Waldron - DRMS <br />Mary Rodriguez - DRMS <br />Alysha Hernandez - DRMS <br />Certified Mail Receipt: 7008 3230 0002 7253 4396 <br />Office of Office of <br />Mined Land Reclamation Denver - Grand )unction - Durango Active and Inactive Mines