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impacted by the mining induced drawdowns. Drawdown depletion rates were then estimated at <br />the different surface water right locations and replacement rates were determined for each. <br />Calculations were performed to estimate industrial uses of surface water and evaporative losses <br />from the sediment ponds receiving runoff from the mining areas. An augmentation plan was then <br />developed for augmenting these surface water losses during each month of the irrigation period <br />and storing water during the winter months, (see Table 12 in Appendix 2.05.6(3) -lb, WRS, LLC <br />Report on Water Augmentation Plan). <br />Calculations were performed for Tuttle, Coal Creek Canyon and the San Miguel River to <br />determine if mine discharges would diminish receiving water quality to the extent that surface <br />water rights would be injured. Table 2.05.6(3)-2 (presented in a succeeding discussion in this <br />section) shows the results of the calculations which were conducted by weight averaging TDS <br />content (by flow in cfs) of the mine discharges and the receiving waters. Presently, there are no <br />surface water rights (or users) of the irrigation runoff water primarily because there is no <br />practical way to divert the water in the stream bottoms by means of gravity flow to upland <br />tillable areas in either Tuttle Draw or Coal Creek Canyon. The effect on the quality of San <br />Miguel varies from about 5% TDS during low flow (irrigation season) to 0.4% TDS during <br />periods of high flow (non -irrigation season). This was determined not to be a significant impact <br />and no mitigation is required. <br />Alternative Water Supplies NHN owns absolute direct flow and storage rights which it will use <br />in conjunction with operations in the New Horizon North mining area ("NHN Mine"). In <br />addition, Western Fuels filed an application with the District Court, Water Division No. 4 to <br />confirm its appropriation of conditional water rights for the NHN Mine and a final decree was <br />signed on August 6, 2013 for Case No. l OCW208. A copy of this final decree is included in <br />Appendix 2.05.6(3) -lc. NHN will make these conditional water rights absolute once mining <br />activities begin and it can divert or store water and put that water to beneficial use. Pursuant to <br />those decrees, NHN has the right to use water in priority under Colorado water law. NHN's <br />professional consulting water engineer has determined that the drainage basins in which NHN <br />will operate its NHN Mine are not over -appropriated, meaning that NHN will be largely able to <br />operate its water rights in priority vis a vis other water users. <br />In addition, in drought periods when water may not be available for use under NHN's existing <br />decree, Colorado water law permits NHN to use its water out -of -priority so long as it mitigates <br />injury to senior water users. The mitigation of injury to other water users caused by out -of - <br />priority depletions is called a plan for augmentation. Typically, a plan for augmentation replaces <br />out -of -priority depletions to the stream with an alternative source of water. A plan for <br />augmentation was also approved by District Court, Water Division No. 4 in the final decree for <br />Case No. l OCW208. <br />Section 2.05.6(3) Page 8 April 2016 (PR -01) <br />