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• Mr. William C. York-Feirn 3 <br />that same day in the Denver law office of Mr. Rodney Knutson, I informed Mrs. Gwen Fraser <br />and her attorney, Mr. James S. Munn, that the Gold Hill Mill was without a legal, approved <br />source of water. When Mrs. Fraser met me at the Gold Hill Mill on October 26, 1990, I <br />again explained the water situation to her, and stressed the need to complete the installation of <br />the two water pumps in order to secure a legal source of water for milling purposes. During <br />November and December, 1990, Mr. John R. Henderson of the Boulder law firm of Vranesh <br />and Raisch and I engaged in lengthy negotiations with Gwen Fraser and her brother Wayne <br />Tatman. They were represented in these negotiations by Mr. Swede Johnson of the Boulder <br />law firm of Chrisman Bynum and Johnson. Inasmuch as Mr. Henderson's law firm has made a <br />specialty of water law, and since Vranesh and Raisch had been retained to secure the Gold Hill <br />Mill's water rights in the Left Hand Creek Ditch Company, we repeatedly emphasized the <br />necessity for Colina Oro Molina, Inc. (COM, Inc.) to use the proper water in milling <br />operations. You will find in the Milling Contract under Section 7 Access to Tailings Pond and <br />Certain Water Rights that it was agreed that "COM, Inc. shall diligently comply with any and <br />all legal or permit requirements for the use of the water storage rights, water rights and the <br />tailings pond." It was also mutually agreed that "the parties have discussed and considered the <br />requirements of Colorado law with regard to the use of water for mining and milling purposes, <br />and for the disposal of tailings in accordance with applicable laws and regulations." <br />Sometime in May or June, 1991, Mr. Tatman installed a submersible water pump <br />behind the Hazel A mine's bulkhead, and began pumping water to the Gold Hill Mill via the <br />existing 2 inch Cash-Wynona mine pipeline. In early November, 1991, COM, Inc. began full <br />scale milling operations with ore trucked in from the Bueno mine near Jamestown. The water <br />used in these milling operations was obtained by using the Cash mine water that had been <br />pumped into the tailings pond once it had been refilled after the October 25, 1991, discharge. <br />Mill tailings water was apparently recycled from the pond to the Hazel A mine via the <br />decantation line and then pumped back up to the mill. Because COM, Inc.'s employees did <br />not make sure that the decantation line's stand pipes were in place before they began filling the <br />pond with mill tailings, the decant line has become blocked with tailings and made unusable. <br />It needs to be cleared and restored to its original purpose. <br />A sump pump was installed by COM, Inc. in the tailings pond when the decantation <br />line became blocked with mill tailings. The use of a pump in the tailings pond to recycle <br />water for milling purposes has probably resulted in mill tailings being pumped underground <br />and deposited in the Hazel A mine. This matter needs to be investigated, and any tailings <br />found in the Hazel A mine must be removed and placed in the pond. <br />Mr. Tatman evidently used recycled mill tailings pond water to operate the Gold Hill <br />Mil] until the flotation reagents became too concentrated for effective milling purposes. In the <br />