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Lamar Light and Power <br />100 North Second <br />Lamar, CO 81052 <br />February 16, 2009 <br />Re: Agreement for Compensation for Damage to Structures within 200 feet of mining <br />activities, and Agreement to Allow Relocation of Overhead Power Line <br />To Whom It May Concern: <br />GP Ranches, LLC has applied to Prowers County (County) for a Special Use Permit, and <br />to the State of Colorado's Division of Reclamation, Mining, and Safety (DRMS) for a <br />Reclamation Permit to allow sand and gravel mining on property within 200 feet of <br />structures adjacent to the property. The Colorado Mined Land Reclamation Act provides <br />protection for your structures located within 200 feet of the mining activities. <br />DRMS Permit approval requires a notarized agreement between the applicant and owners <br />of structures within 200 feet of the mining activities, providing compensation for any <br />damage to the structure; or preparation of an engineering evaluation acceptable to the <br />DRMS, demonstrating that such structure(s) shall not be damaged by the mining activities <br />if an agreement cannot be reached. <br />GP Ranches, LLC has had an engineering evaluation performed to determine acceptable <br />setbacks from their proposed mining permit boundary and mining limit to structures <br />adjacent to the mining. The proposed mining slopes and setbacks were analyzed using the <br />XSTABL v5.105a computer program. XSTABL was designed to analyze the slope stability <br />of earth embankments subjected to several critical situations that may occur during the life <br />of the embankment. The procedure searches for circular shear failures and automatically <br />searches for the lowest safety factor. 2,000 separate failure surfaces were analyzed for <br />each case. The required minimum safety factors are based on the current standards used <br />by the Colorado State Engineer's Office (SEO) for high hazard embankment dams, and <br />industry accepted standards for the evaluation of embankments during construction. The <br />safety factors attained using the setbacks shown on the Mining Plan are greater than the <br />required safety factors specified by the SEO for an earth embankment during construction, <br />and an earth embankment subjected to earthquake loading, based on the United States <br />Geological Survey earthquake peak acceleration factors for the area. This evaluation <br />indicated that damage to structures adjacent to the mining should not occur, even during <br />earthquake conditions, which are very unlikely to be present. <br />With this letter, GP Ranches, LLC requests your authorization to conduct mining and <br />GP Ranches, LLC 7991 Shaffer Parkway, Suite 200, Littleton, CO 80127 (303) 3bV-*1uu