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a?( A? <br />Winston and Judy Nyquist <br />7991 Shaffer Parkway, Suite 200 <br />Littleton, CO 80127 <br />February 16, 2009 <br />Re: Agreement for Compensation for Damage to Structures within 200 feet of mining <br />activities <br />Mr. & Mrs. Nyquist: <br />GP Ranches, LLC has applied to Prowers County (County) for a Special Use Permit, <br />and 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 <br />owners of structures within 200 feet of the mining activities, providing compensation for <br />any damage to the structure; or preparation of an engineering evaluation acceptable to <br />the DRMS, demonstrating that such structure(s) shall not be damaged by the mining <br />activities if an agreement cannot be reached. <br />GP Ranches, LLC has had an engineering evaluation performed to determine <br />acceptable setbacks from their proposed mining permit boundary and mining limit to <br />structures adjacent to the mining. The proposed mining slopes and setbacks were <br />analyzed using the XSTABL v5.105a computer program. XSTABL was designed to <br />analyze the slope stability of earth embankments subjected to several critical situations <br />that may occur during the life of the embankment. The procedure searches for circular <br />shear failures and automatically searches for the lowest safety factor. 2,000 separate <br />failure surfaces were analyzed for each case. The required minimum safety factors are <br />based on the current standards used by the Colorado State Engineer's Office (SEO) for <br />high hazard embankment dams, and industry accepted standards for the evaluation of <br />embankments during construction. The safety factors attained using the setbacks <br />shown on the Mining Plan are greater than the required safety factors specified by the <br />SEO for an earth embankment during construction, and an earth embankment <br />subjected to earthquake loading, based on the United States Geological Survey <br />earthquake peak acceleration factors for the area. This evaluation indicated that <br />damage to structures adjacent to the mining should not occur, even during earthquake <br />conditions, which are very unlikely to be present. <br />With this letter, GP Ranches, LLC requests your authorization to conduct mining and <br />reclamation activities within 200 feet of your structure(s). In return for this authorization, <br />GP Ranches, LLC agrees to provide fair compensation for any damage to your <br />structure(s) resulting from its mining and reclamation activities. Your notarized signature <br />GP Ranches, LLC 7991 Shaffer Parkway, Suite 200, Littleton, CO 80127 (303) 369-5100