2018-08-30_HYDROLOGY - M2017032 (2)

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Mr. Paul Bruss, P.E. August 30, 2018 Page 2 of 6 Deep Cut has obtained a separate DRMS permit (M-2017-032) and plans to continue mining in the northern portion of the 22 West Parcel. As shown on Figure 1, attached, the southern portion of the 22 West Parcel was released from the Rocky Ford East Pit DRMS permit no. M-1977-560 pursuant to a June 2, 2016 letter from DRMS, which included 17.4 acres of ground water that was exposed prior to 1981. The remaining pond area in the northern portion of the 22 West Parcel (aka the 22 West Pit) is 11.3 acres and this ground water was all exposed after 1980. Deep Cut is assuming responsibility for the remaining augmentation obligations associated with the 22 West Pit. These obligations include depletions resulting from water removed with the mined material, dust control, and evaporation from the post -1980 portion of Ponds 1 and 2 (see Figure 2). The obligations previously incurred by Valco are incorporated into this SWSP and are given in Table 2 (attached). 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 the operator provide information to DRMS to demonstrate the replacement of long term injurious stream depletions that result from mining related exposure of groundwater. In accordance with said letter, the Applicant has dedicated the following water rights for long-term replacement of evaporative depletions resulting from exposure of 15 acres of ground water by letter dated August 30, 2018, attached. Water Right Shares Estimated Yield Total Yield (af/yr) (af/yr/share) Rocky Ford Ditch 2 12.86 25.72 Company Catlin Canal Company 15 1.54 23.10 Twin Lakes Reservoir and Canal Company 17.45 0.70 12.22 F_—Total - - 61.04 DEPLETIONS Deep Cut is commencing active mining at the 22 West Pit location which was previously scheduled for remediation. The previously incurred lagged depletions were calculated by re-establishing the centroid for Ponds 1 and 2 and lagging the depletions using the same methodology from previous Rocky Ford Pit SWSPs. The depletions calculated in this manner total 27.13 acre-feet. Depletions as a result of evaporation and mining activities during this plan year are given in Table 1 (attached). Dust control is fully consumptive and has been estimated to be 1.0