2017-03-22_HYDROLOGY - M2001005

• Permit No: M2001005
• IBM Index Class Name: Hydrology
• Doc Date: 3/22/2017
• Doc Name: Substitute Water Supply Plan
• From: DNR Water Resources
• To: DRMS
• Email Name: TC1
• Media Type: D
• Archive: No

Mr. Paul Bruss March 22, 2017
Page 6 of 7
after reclamation, replacement of lagged depletions from mining and dewatering shall
continue until there is no longer an effect on stream flow. Any subsequent request for a
renewal/additional SWSP for this site must include information regarding the estimated
date mining will be completed and the Applicant’s plans for filing an application with the
water court for a plan for augmentation.

12. In accordance with the letter dated April 30, 2010 from the Colorado Division of
Reclamation, Mining, and Safety (“DRMS”), all sand and gravel mining operators must
comply with the requirements of the Colorado Reclamation Act and the Mineral Rules
and Regulations for the protection of water resources. The April 30, 2010 letter from
DRMS requires that you provide information to DRMS to demonstrate you can replace
long term injurious stream depletions that result from mining related exposure of
ground water. The DRMS letter identifies four approaches to satisfy this requirement.

In accordance with approach nos. 1 and 3, a bond for $115,000 has been obtained through
DRMS. It is our understanding that this may be used for backfilling of the sediment pond and
water basin, but is not adequate for backfilling of the Phase 2 mining pit. Therefore, in
accordance with approach no. 4, you have indicated that the mineral lease between the
Applicant and the landowner provides for the Applicant’s use of the Lester-Attebery water
rights in connection with the mining operation. You have indicated that the Applicant
intends to fully utilize the Lester-Attebery Ditch rights as the sole replacement supply for a
long-term augmentation plan for the Grisenti Pit. For the purposes of this SWSP, the lease
agreement will be accepted for the dedication of the subject water rights; however, if the
State Engineer determines that a different dedication process is necessary to assure proper
dedication of water rights, additional information, may be required prior to future SWSP
approvals.

13. The replacement water that is the subject of this SWSP cannot be sold, leased or otherwise
legally encumbered during the term of this SWSP. As a condition of subsequent renewals of
this SWSP, the replacement water must be appurtenant to this site until a plan for
augmentation is obtained. All replacement water must be concurrent with depletions in
quantity, timing, and location.

14. The State Engineer may revoke this SWSP or add additional restrictions to its operation if at
any time the State Engineer determines that injury to other vested water rights has or will
occur as a result of this SWSP. Should this SWSP expire without renewal or be revoked prior
to adjudication of a permanent plan for augmentation, all use of ground water must cease
immediately.

15. In accordance with amendments to C.R.S. § 25-8-202(7) and "Senate Bill 89-181 Rules and
Regulations" adopted on February 4, 1992, the state engineer shall determine whether or
not the substitute supply is of a quality to meet requirements of use to senior appropriators.
As such, water quality data or analysis may be requested at any time to determine if the
water quality is appropriate for downstream water users.

16. The decision of the State Engineer shall have no precedential or evidentiary force, shall not
create any presumptions, shift the burden of proof, or serve as a defense in any water court
case or any other legal action that may be initiated concerning the SWSP. This decision shall
not bind the State Engineer to act in a similar manner in any other applications involving
other plans or in any proposed renewal of this plan, and shall not imply concurrence with