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07/21/03 15:46 FAX 970 325 7333 THh[&M <br />Mr. Carl B. Mount <br />July 21, 2003 <br />Page 4" of 10 <br />See WestWater Associates, Inc., Preliminary Opinion, June 20, 2003, <br />attached hereto as Exhibit B. <br />It is also important to note that the DMG Preliminary Adequacy Report <br />("PAR") cites the fact that DMG inspector, G. Russ Means has commented <br />in similar fashion, indicating a concern that this mine will expose <br />groundwater, intermittently through the year. <br />Finally, the application fails to demonstrate that the operation has been <br />designed so that any potential disturbance to hydrologic balance and water <br />quality has been minimized. Subparagraphs (1) (a) and (b) set forth two <br />startirig points for consideration of this criterion. Neither of these standard <br />objectives, has been met. <br />(a) The applicant has failed to comply with applicable Colorado water <br />Maws and regulations governing injury to existing water rights. The <br />project as described will change the diversion and use of water <br />and will store significant amounts of water on site, for various <br />uses. The applicant has, #o date, failed to apply for necessary <br />' change of use, point of diversion and storage rights as called for <br />by the project description. My clients have generated an informed <br />preliminary opinion that these applications will adversely affect <br />senior vested water rights belonging to individuals and entities <br />other than the applicant. The applicant has failed to address this <br />injury in any manner. <br />(b) 'The applicant has failed to demonstrate that compliance with <br />•applicable federal and Colorado water quality laws, regulations and <br />standards can and will be achieved as the project is currently <br />designed. The application currently mischaracterizes this operation <br />as a 'dry mine'. Under that scenario, the project claims to be a <br />'zero discharge' operation. As discussed above, there is <br />substantial likelihood, if not predictability, that this mine will <br />encounter and expose ground water at least 6 - 9 months of the <br />year. That probability significantly alters the opportunity for <br />surface and groundwater contamination and pollution arising from <br />;this mining operation. <br />~ 005 <br />