2013-12-03_INSPECTION - M1977151

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PERMIT #: M -1977 -151 INSPECTOR'S INITIALS: PSH INSPECTION DATE: November 15, 2013 OBSERVATIONS The Greeley Pit was inspected by Peter Hays with the Division of Reclamation, Mining and Safety (Division /DRMS) as part of the Division's monitoring inspection program. The site was previously inspected by the Division on March 16, 2010. Mrs. Sharon Hiner with R M Hiner Construction Co. Inc. was present during the inspection. The site is permitted for 170 acres with a post- mining land use of recreation. The site consists of 3 phases. All mining activity is currently contained within Phases 1 and 2. Three unlined lakes are located in Phases 1 and 2 in the southeast portion of the site. The 21.2 acre lake and the 5 acre lake were combined into one lake in 2013 to create a better lake for water skiing. The 21.2 acre and the 40 acre lakes are used for water skiing while the site is mined. The remaining 5.7 acre lake is located the southeast corner of the site. A forth lake is planned for the northwest portion of the property in Phase 3. Phase 3 has not been disturbed by mining activity to date. The 5.7 acre lake, the 21.2 acre lake and 13.3 acres of the 40 acre lake are considered pre -law disturbances. The Operator is not required to replace the evaporative depletions for the exposed groundwater in these lakes. The final reclamation plan for the site is to create four unlined lakes totaling 95 acres. A total of 54.8 acres of exposed groundwater will need to comply with the Division of Water Resources (DWR) requirement to provide long term augmentation for exposed groundwater. Currently, 32.1 acres of exposed groundwater require long term augmentation (72.3 acres of exposed groundwater minus the 40.2 acres of pre -law exposure). In accordance with the Division's letter dated April 30, 2010, the Operator was required to demonstrate they could replace the long term injurious stream depletions resulting from the exposure of groundwater due to the mining operation. The Operator selected the fourth approach to comply with the letter, which was to dedicate water rights to the DWR to account for the exposed groundwater. The Operator has dedicated 3.0 shares of replacement water to date. The 3.0 shares are not sufficient to provide long term augmentation water for the current 32.1 acres of non pre -law exposed groundwater or the planned final 54.8 acres of non pre -law exposed groundwater. The Operator has demonstrated the intention to comply with the Division's April 30, 2010 letter by purchasing and dedicating 2.5 shares of augmentation water since the letter was mailed to the Operator. However, an estimated 6.0 additional share are required to account for the current exposed groundwater. The Division will not issue a possible violation for failure to comply with the letter and the requirements of CRS 34-32.5 - 116(4)(h), Rule 3.1.6(1)(a) and 6.4.5(2)(c) at this time. To avoid a future possible violation, the Operator must continue to purchase and dedicate water shares to account for the long -term groundwater exposure at the site. If the Operator is not able to purchase the required water shares, the Division will calculate the required financial warranty to backfill the exposed groundwater areas not covered by the dedicated water shares. The site was inactive during the inspection. A backhoe was observed at the site and stockpiled material was observed in the southeast section of the site west of the 5.7 acre lake. The site was not affected by the recent flood event in the area. The Operator stated the Cache la Poudre River got within a foot of overtopping the rivers banks, but the floodwaters did not enter the site. Page 2 of 6