2017-08-01_INSPECTION - M2008082

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Eric Scott August 1, 2017 Page 2 reclamation of the Holton Property. The Holton water rights include the Holton Seep Ditch water right decreed in Case W-18, which awarded a priority date of January 1, 1920 for 5.0 cfs (or+9.9 acre feet) "of water from seepage—storm discharge, tributary to the South Platte River . . . ." A copy of this decree is provided in Attachment B. On August 13, 2007 the DRMS approved and issued to RMCC Permit M-2007-008 for the Holton Property (the "Holton MLRB Permit"). RMCC exercised the right to purchase the sand and gravel in place on the Holton Property on December 14, 2007, which included the right to use the Holton water rights as evidenced by the attached Memorandum of Surface Use and Mining Agreement in Attachment C, which was recorded in Weld County on January 11, 2008 at Reception No. 3528507. The Surface Use and Mining Agreement was entered by Holton and RMCC as a condition of RMCC's exercise of the August 2005 option. The recorded Memorandum confirms RMCC has: "the right to utilize so much of any existing water rights appurtenant to or historically used in connection with the Property or which may be otherwise available to Holton to offset any evaporative loss of water from the Property that occurs during the course of mining and processing of Construction Aggregate Materials, and the Coinpanv's related operations, including without limitation dust control, water removed with mined Construction Aggregate Materials, reclamation irrigation and similar operations (including, but not limited to, materials washing operations) . . . . " On March 26, 2009 the DRMS approved and issued RMCC Permit M-2008-082 for the Morton Property (the "Morton MLRB Permit"). The DRMS later approved TR-02 to the Holton MLRB Permit on January 10, 2010, which authorizes RMCC to mine the common boundary between the Holton Property and the Morton Property to maximize sand and gravel recoveries and water storage volumes on the two properties. Finally, on March 6, 2017 the DRMS approved conjoining the Holton MLRB Permit and the Morton MLRB Permit into a single MLRB Permit No. M-2008-082 AMO1 ("Combined MLRB Permit"). Drainage Area on Ruiz/Birminaham/Fort Lupton Property The source of water in the drainage area on the Ruiz/Birmingham/Fort Lupton properties is the water in Holton Seep Ditch. A map showing the general location of the Holton Seep Ditch is provided in Attachment B. The aerial photos set forth in Attachment D show the water in the drainage area fluctuates, thus demonstrating that the "prevailing hydrologic balance" is dynamic, transient and inconstant; in short, the current lack of water in the drainage area appears to be a function of and consistent with prevailing hydrologic balance,particularly during a dry summer such as we are experiencing. o Photo 1 - Holton Seep/drainage area aerial (partially dry) dated May 23, 2006 o Photo 2 - Holton Seep/drainage area aerial (dry) dated June 22, 2004