2019-05-09_PERMIT FILE - M2018051 (3)

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Peter Hays May 9, 2019 Page 3 under Colorado law. It owns the Bijou Canal, and also has decreed water rights (both direct flow and storage) for irrigation and other uses, including recharge. Physical Impacts to Bijou's Water Rights and Operations The mining permit application for the Lost Creek Mine project, as originally submitted, provides that no groundwater is expected to be encountered during mining and that BMS will "minimize disturbances to the prevailing hydraulic balance of the surface land and surrounding area." Bijou understands this statement to mean that BMS intends to address impacts to the prevailing hydrologic balance of the affected land and of the surrounding area, including the quality and quantity of water on the surface and in the groundwater aquifer. Bijou agrees the Lost Creek Mine project and any reclamation must not impact surface flows, intercept groundwater, or otherwise impact the alluvial hydrology. However, it does not believe that sufficient data collection and analysis have been done to date by BMS to establish pre-mining baseline aquifer water levels or hydrology in the proposed mining area. Without that data and analysis, Bijou and the Division of Reclamation, Mining and Safety ("DRMS") cannot fully evaluate the proposed mining project and reclamation plan and whether the mining and reclamation can and will be done in a manner that prevents injury to Bijou's water rights, water service operations, and other property interests. This item is of utmost importance to Bijou. Any exposure of tributary groundwater and/or changes to the hydrologic balance in the area to the south and west of Empire Reservoir could result in physical impacts on Empire Reservoir (changes in the seepage rate, need to divert and store additional water, etc.) or on the Empire Inlet Canal (additional seepage) that could result in a reduction in the amount of water available to the District for use by District landowners, increased operations costs to the District and its landowners, and potential impacts on other water users who divert from the South Platte River (if the District is required to make additional diversions). Such impacts would be injurious to Bijou (and others). Bijou is not clear what level of technical evaluation of the aquifer has been completed by BMS to date. However, whatever data was reviewed is likely not representative of aquifer conditions and groundwater elevation levels over a period during which Empire Reservoir is filled to capacity and then used for irrigation through an entire irrigation season. Prior to any mining or reclamation being approved or completed,