2015-03-30_GENERAL DOCUMENTS - M1999006

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1) And later — a critical understanding..., The Operator has complied with the Colorado Division of Water Resources (DWR) requirement for long -term augmentation for exposed groundwater by committing shares to the DWR. The approved post- mining land use is general agriculture with three unlined ponds. i. The only operations offered by the OMLR as precedent to their desired action were attempting to comply with water augmentation limitations imposed by evaporative loss considerations under Colorado water law. ii. The operations involved were sacrificing commercially viable product to accomplish compliance with water law and maintain compliance with their OMLR permits. iii. Many of these operations are presently at risk, as Colorado water law and OMLR actions have likely subverted the economic vitality of these operations. iv. Varra Companies, Inc. does not require the sacrifice of its valuable product to maintain compliance with Colorado water law. 2. Other Considerations: Please note well the following: 34 -32 -102. Legislative declaration (1) It is declared to be the policy of this state that the extraction of minerals and the reclamation of land affected by such extraction are both necessary and proper activities. It is further declared to be the policy of this state that both such activities should be and are compatible. It is the intent of the general assembly by the enactment of this article to foster and encourage the development of an economically sound and stable mining and minerals industry and to encourage the orderly development of the state's natural resources, while requiring those persons involved in mining operations to reclaim land affected by such operations so that the affected land may be put to a use beneficial to the people of this state. It is the further intent of the general assembly by the enactment of this article to conserve natural resources, to aid in the protection of wildlife and aquatic resources, to establish agricultural, recreational, residential, and industrial sites, and to protect tuui promote the health, safety, and general welfare of the people of this state. (2) The general assembly further declares that it is the intent of this article to require the development of a mined land reclamation regulatory program in which the economic costs of reclamation measures utilized bear a reasonable relationship to the environmental benefits derived from such measures. The mined land reclamation board or the office, when considering the requirements of reclamation measures. shall evaluate the benefits expected to result from the use of such measures. It is also the intent of the general assembly that consideration be given to the economic reasonableness of the action of the mined land reclamation board or the office. In considering economic reasonableness, the financial condition of an operator shall not be a factor. Continued... next page... Varra Companies, Inc. correspondence of 30 March 2015 to the Colorado Office of Mined Land Reclamation in 14 reply to the OMLR Inspection Report of 28 August 2014 — Kurtz Project — M -1999 -006