2006-06-12_REVISION - M1978314 (3)

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MOSES, WITTEMYER, HARRISON AND WOODRUFF, P.C. LAW OFFICES ' 1002 WALNIII'SfREEf, 4JRE 300 DAYIDL HARRKON ~ BOULDER,COLORADp Bp702 CHARLES N. WOOO0.UP- lAMFS R. MONTGOMERY (,g,l.,q,y, TIMOniY 7. BEATON TELEPHONE: (l07)a17~8rB2 VERONICA A. EPERLMG ~ - ~ .iA%: I30lJaq.SlBS; COUNSEL _ ' • RAPHAFI J. MOSES _ _ • ~ ,, , , , , JOHN WITfEMYER RICHARD I. MEHREN' ADCHRESSCORRESPONDENCG TO: OABRffJ. D. CARTER P. O. BOX IdaO BRMN A. X]JVISEN BOULDER, CO S030B.,M0 '. ~ ' March 8, 2005 Paul Gesso Maureen Jacoby Banks and Gesso LLC 720 Kipling Street, Suite 1 ] 7 Lakewood, CO 80215 Re: Water Supply for King Mountain Gravel Operation. Routt County. Colorado Dear Paul and Maureen: You have asked me to address the status of water rights acquired by Angus Investment LLC with the King Mountain gravel mining property and to identify the options for ~ obtaining a water supply for the expanded gravel operation that is the subject of a permit application pending before the State Division of Minerals and Geology (DMG). ~. Angus Investment acquired the King Mountain gravel property and associated water rights in June 2004. The water rights acquired wiW that property include various decreed priorities for diversion from Egeria Creek and various springs tributary to Egeria Creek or Smith Creek with appropriation dates ranging from August 1889 to December 1991. The water rights are described on the bargain and sale deed attached to this letter. The older water rights are adjudicated for irrigation use, while some of the more junior water rights are adjudicated for irrigation, stockwatering, domestic, fireprotection and fish culture, including several small storage waterrights. It is my understanding that a small gravel extraction operation has been operating at the site for a number of yeazs, with water being diverted for dust suppression and, perhaps, some small amount of gravel washing. The water used for those purposes has been diverted from Smith Creek just upstream of its confluence with Egeria Creek with the knowledge of the local water commissioner. Since the water rights acquired with the property are not specifically decreed for industrial or gravel extraction purposes, we must assume that the diversions of such water for those uses took place at times when there was unappropriated water available in the Egeria Creek basin. Under Colorado law, a water user may appropriate and use water from natural streams so long as that water is not needed to satisfy prior appropriators from the stream system. When a prior appropriator needs the water, he/she places a "call" with the State water officials who may curtail diversions from the system under water rights junior to the calling right or those without a decreed priority, as deemed necessary by the State water officials to satisfy the calling right(s). The condition where