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Mr. William Blatchley August 3, 2006 Page 2 covered period. You have assumed the ice covered period to extend from November 6 through April 4. However, for the purpose of this SWSP, the Applicant shall replace the net evaporation depletions from the exposed ground water surface area that may occur during the assumed ice covered period (November 6 through April 4) for any time that the pit is not completely covered by ice. Computation of the net evaporation during any time that the pit is not completely covered by ice shall be determined as the pro-rata amount of the monthly gross evaporation rate distribution amount identified in the State Engineer's General Guidelines for Substitute Supply Plans for Sand and Gravel Pits, subtracting the pro-rata amount of the effective precipitation for that period. The mining operation is located less than 100 feet from Twin Creek. As a result, depletions to Twin Creek are assumed to be instantaneous. The proposed source of replacement for depletions created by this operation is a multi- yearwater lease agreement with Mountain Mutual Reservoir Company ("MMRC"). According to this contract, the three year agreement for release of up to 3.0 acre-feet of replacement water has been executed and becomes effective on the date of the SWSP approval. This agreement must take into account all conditions set forth in this approval letter and all transit losses associated with the delivery of the replacement water to the point of depletion. A monthly breakdown of the annual depletions made up of 1.11 acre-feet of net evaporative loss (using an assumed ice covered period of November 6 through April 4), 1 acre-foot of water lost with the mined product (which represents 20,000 cubic yards of aggregate) and anticipated replacement requirements for this operation (without accounting for transit losses) can be found on the attached Table I. As required by Section 8 of Senate Bill 89-120, this SWSP has been provided to an outside consultant for review. The consultant has recommended approval of the SWSP by way of a draft of this letter. Based upon statutory requirements and the recommendations of the consultant, I hereby approve the proposed SWSP in accordance with Section §37-90-137(11), C.R.S., subject to the following conditions: 1. This plan is approved with the effective date of May 1, 2006 and shall be valid through April 30, 2008. If this SWSP will not be made absolute by a water court action by the SWSP's expiration date, a renewal request must be submitted to this office with the statutory fee (currently $257) no later than March 16, 2008. 2. A well permit must be issued for the gravel pit in accordance with C.R.S. § 37-90-137(2) and (11) for the exposure and use of groundwater. A gravel pit well permit application (receipt no. 3007193) was submitted to this office on August 2, 2006 and is under review at this time. Until a gravel pit well permit is issued, consumptive use and exposure of additional groundwater on this site is prohibited. The provisions of C.R.S. § 37-90-137(2) prohibit the issuance of a permit for a well to be located within 600 feet of any existing well, unless the State Engineer finds that circumstances so warrant after a hearing held in accordance with the procedural rules in 2 CCR 402-5. This hearing may be waived if you are able to obtain statements from the owners of all wells within 600 feet, verifying that they have no objection to your use of the proposed well. Should a new well permit be denied for reasons of 600 foot spacing, or any other legitimate reason, approval of this substitute supply plan will be cancelled. 3. The total surface area of the groundwater exposed after January 1, 1981 at the Clare Pit must not exceed 2.8 acres during the approval period of this SWSP and the maximum