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5. Place of Delivery and Choice of Water Source. The Place of Delivery will be the <br /> location where water is released from any of Pueblo Water's sources, including but not limited to <br /> stored water at Clear Creek Reservoir,Turquoise Reservoir, Twin Lakes Reservoir;or from <br /> direct flow transmountain water rights;with the sources of such water to be at the option of <br /> Pueblo Water, but such sources do not include Fryingpan-Arkansas Project Water. At the option <br /> of Pueblo Water, such sources may be changed from time to time to suit the operational <br /> convenience of Pueblo Water. Lessee bears responsibility for any exchanges necessary to get the <br /> leased water from the Place of Delivery to Lessee's place of use. <br /> 6. Approval to Utilize Water. Lessee will use the water to be delivered pursuant to the <br /> terms of this Agreement for replacement of depletions resulting from its gold mining operations <br /> in Lake County, Colorado. Lessee will be responsible for compliance with all applicable laws <br /> and regulations. If Lessee requires approvals from administrative or judicial authorities to use the <br /> water to be delivered under this Agreement,then Pueblo Water will cooperate with Lessee to <br /> provide information regarding Pueblo Water's water rights that may be needed to obtain <br /> approval of Lessee's water use. However,all costs of any such approvals will be borne by <br /> Lessee. Lessee will not file an application with any administrative or judicial authorities that <br /> includes a change to any of Pueblo Water's water rights without the express written consent of <br /> Pueblo Water,which consent is in the sole discretion of Pueblo Water. <br /> 7. Rate of Delivery. Pueblo Water will not be required to deliver water at a rate higher than <br /> 25 c.f.s., but may do so in its discretion. Pueblo Water will upon written request deliver at rates <br /> lower than 5 c.f.s. subject,however, to the following: <br /> 7.1. Any such lower rate of delivery is subject to the approval of the Division Engineer, <br /> Water Division No.2; <br /> 7.2. Any such delivery from Pueblo Water's supplies at Pueblo,Turquoise,Twin Lakes <br /> or other reservoir not controlled by Pueblo Water is subject to the approval of the agency <br /> which operates or controls discharges from said reservoir; <br /> 7.3. Pueblo Water is not required to make any physical alteration of any outlet gates or <br /> outlet measuring devices or incur any additional cost for the purpose of making such low <br /> rate deliveries. <br /> 8. Transportation and Evaporation Losses. The quantity of water to be delivered <br /> hereunder will be measured at the Place of Delivery. Lessee will bear all transportation and <br /> evaporation losses from the Place of Delivery to Lessee's place of use. Pueblo Water will, in its <br /> sole discretion,deliver water from the location closest to the Lessee's place of use when <br /> reasonably possible in order to minimize transit losses. <br /> 9. Notice of Delivery. Pueblo Water agrees in accordance with the terms of this <br /> Agreement, to make available for delivery up to the quantities of water stated in paragraph 2 <br /> during the term of the Agreement at the request of Lessee. Lessee must notify Pueblo Water's <br /> Water Resources Division by email or phone at least two business days in advance of when any <br /> requested delivery of water needs to be released. Such notice will include the desired rate of <br /> Page 2 of 7 <br />