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(c) Water Resources: The proposed area of operations lies to the East of the San Juan River on an elevated terrace approximately 10 [0 14 feet above the current surFace of the river. Onsite test pits excavated to the basement Mancos Shale [o average depths of 12 feet intercepted some minimal p3oundwater seepage on the top of the shale emanating from the hillside slope to the west. Lateral groundwater seepage was also observed in pits located close to the river. These test pits were excavated in 1999-2000. Current water levels are lower due to extended drought conditions and seepage is expected to be much less than previously observed. A settlement pond/sump is planned to be installed in the south end of the pit excavation in order to control and contain intercepted groundwater or seepage that may be encountered during mining activities. These waters will be allowed to settle prior to controlled release back into the river. The entire approximate 5 acres of planned pit area will be reclaimed as a developed water resource area (pond) with an inlet and outlet ditch and headgate structures similaz to ones currently in use at other pond locations on the Mask Ranch, The location of these existing ponds and the proposed pond may be found on the Exhibit A -Map 5. (d) Wildlife information: Mr. Chris Kloster, a representative with The Colorado Division of Wildlife, Durango, CO office, verified that no critical or important wildlife habitats or wildlife species will be affected by the proposed operation. A secondary future use of the site after mining and reclamation operations have been completed is for improved wildlife habitat. Wildlife such as deer, coyotes, rabbits and other rodents and vazious waterfowl would utilize the reclaimed area. The shoreline of the "pond" will be irregular and a small island will be constructed as a nesting location for waterfowl. The pond will also create a potential spawning azea for the San Juan fishery. A copy of the permit application form, with an attached location map, has been forwarded to the Durango DOW office at the request of Mr. Kloster.