The Mined Land Reclamation Board voted Dec. 17 to forfeit the financial warranty tied to the Loblolly Pit permit (M2013066) and to revoke the permit after finding the operator failed to replace an expiring bond.

DRMS attorney Chris Gerardi told the board the operator’s financial warranty was subject to forfeiture after Community Banks of Colorado notified the division that the letter of credit would expire Dec. 31. The division issued a reason‑to‑believe letter in October and a board hearing followed; the board previously found the operator in violation for failing to maintain the financial warranty. Gerardi said the operator did not submit a replacement warranty and the Dec. 11 letter of credit submitted to the division did not meet the required form and language.

The board majority adopted staff recommendations to issue findings of fact and conclusions of law, to order the effective financial warrantor to immediately deliver the amounts owed under the warranty pursuant to statute, and to revoke permit M2013066. Legal counsel advised that revocation is the statutory step required to trigger forfeiture and protect the state’s interest, and that permitting an operator to continue mining without a bond would expose the state to liability.

An engineer speaking for Arbalee/Arbelise Sand and Stone asked whether ongoing reclamation work related to flood repairs could proceed under state supervision and documented extensive efforts with local bank staff to correct the paperwork. The operator representative said company agents and local branch staff had tried to resolve the issue but that higher‑level bank offices did not adopt the state’s required form. “We were unable to find anyone who could guarantee that they would provide a new financial warranty by today,” the operator’s engineer said, adding that the company appreciated the division’s assistance.

Board members discussed options including calling the bond immediately to protect the public interest, and the board voted to follow the division’s statutory process. The motion included discussion of waiving the $3,400 civil penalty that had been assessed (34 days at $100/day) if the operator complies with corrective actions; that suspension or waiver is contingent on meeting the board’s order and providing the correct warranty paperwork.

The board did not accept proposals to allow continued mining without a valid bond, with legal staff advising that execution of activities on an unbonded, revoked permit would leave the state exposed to unrecoverable liability. The board adopted the forfeiture and revocation order and directed staff to serve notice on the financial warrantor.

The action is effective immediately and the board’s order instructs the warrantor to deliver funds pursuant to CRS provisions cited in the hearing record. Next procedural steps include enforcement of the warrant and, if the operator cures the deficiency before the bond is drawn, the operator may petition for reconsideration and, in some cases, seek reinstatement under board procedures.