2017-12-04_REVISION - M1977300 (3)

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Letter from Denver Water Re: Permit No. M-1977-300 December 4, 2017 Page 2 of 3 channel drinking water reservoir located a few miles downstream of Cotter's Schwartzwalder Mine. Ralston Creek is a source of water for Ralston Reservoir, which Denver Water, as well as the City of Arvada and North Table Mountain Water and Sanitation District, rely on as drinking water supply for their respective customers. To date, Denver Water's Moffat Treatment Plant, which is a conventional potable water treatment facility, has been able to remove uranium concentrations from source water, but not without cost to Denver Water and its ratepayers. Much of the uranium that is removed from the water at the plant, is eventually concentrated in solids, which becomes more costly and difficult to dispose of as uranium concentrations in Ralston Creek increase. In addition, uranium can also manifest itself in treated drinking water. Samples show that uranium concentrations at the Moffat Treatment Plant reached a maximum levels of approximately 2 parts per billion (gg/L) in 2016. This exceeds the EPA's maximum contaminant level goal of zero for uranium but is below the EPA's maximum contaminate level of 30 µg/L. If uranium concentrations in Ralston Creek were to increase above current levels, Denver Water would not be able to remove uranium from its drinking water without costly upgrades, the cost of which would be bome by Denver Water's ratepayers. Denver Water has reviewed the information submitted by Cotter to DRMS with its October 11, 2017 transfer request, and it is unclear whether Colorado Legacy Land is capable of assuming the responsibility for the conditions included under Permit No. M-1977-300. See Hard Rock/Metal Mining Rules, Rule 1.12(2) (providing that a request for transfer shall be given if the Mined Land Reclamation Office "finds that the successor Operator is capable of assuming all responsibility for the conditions included under the original permit....") Colorado Legacy Land ("CLL") was formed as a foreign limited liability company registered in Colorado on or about July 19, 2017, and formed and incorporated in Delaware as recently as July 17, 2017. CLL is apparently jointly owned by Alexco Environmental Group, Inc. ("Alexco") and Legacy Land Stewardship ("LLS"), a Private Benefit Corporation. Given the brief tenure of CLL, there is almost no track record that would allow one to conclude that the company is capable of assuming the responsibility of managing and operating under the permit for Schwartzwalder Mine. It is also unclear why there is a need for Cotter to transfer the Schwartzwalder Mine to a company owned by Alexco when Alexco is already contracting with Cotter to perform treatment work at Schwartzwalder. Before approving the transfer, DRMS should require that Cotter provide the following additional information, at a minimum, to facilitate the evaluation of whether CLL is able to assume responsibility of Permit No. M-1977-300: the future source of operating revenue for CLL;