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3 <br />September 14, 2010 <br />Page 2 <br />"The company retains the right, with the permission of the LEASOR to <br />further amend the permits, conditioned upon submission by the company <br />to an approval by the DRMS of an amended reclamation plan and the <br />posting by the company of the financial warranty necessary to obtain <br />approval of the amended reclamation plan for the DRMS permit. Such <br />permission for amendment of the permits shall not be unreasonably <br />withheld by the Leasor." <br />Clearly this contemplates some notice to the landowner and the recent subterfuge to <br />attempt to amend the permit by a "Technical Revision" is not in conformance with ¶5 of the <br />Amended and Restated Lease of September 10, 2008 nor the Division's Regulations. <br />Your recent correspondence also indicates the hope that the surety bond will be reduced. <br />In my experience, if you are serious regarding leaving the exposed surface ponds, then the bond <br />surely will be recalculated, but will include the cost of permanent replacement augmentation <br />water. It is my calculation that such amendment would result in an increase in the required bond <br />in the amount of at least $1,530,000 (30.6 surface acres x. 2.5 acre-feet per surface acre x. <br />$20,000 per acre-foot). If Lafarge was serious about filing for a permanent plan of augmentation <br />for the ponds at this location, then the Division's regulations require such a court filing to have <br />been made three years prior to the conclusion of mining. Further, it's been my experience that a <br />contested augmentation case cannot be heard by the Water Judge in Water Division No. 1 prior <br />to 2012 even if a case was ready to set today. <br />As indicated in prior correspondence, we believe that the Amended Lease which is about <br />to expire clearly contemplated a clean inert landfill operation which would eliminate the need for <br />the time and expense associated with a Water Court approved permanent augmentation plan. We <br />recognize that Lafarge had some discretion in this regard, but it also was required to exercise its <br />"best efforts," which it has not done. While your present intention might have been only for fill <br />material to be generated by a nearby Lafarge operation, the lease that you drafted was much <br />broader. The Denver Water Board operations in the immediate vicinity will generate clean fill at <br />no cost to Lafarge and my clients are more than happy to assist in that regard. <br />My clients are not interested in assuming Lafarge's Reclamation Obligations as a <br />Successor Operator nor are they interested in deeding Fulton Ditch shares that are not necessary <br />under the current approved Reclamation Plan. We also are not interested in extending the <br />current mining lease which expires on September 9, 2010, but will not resist any legitimate <br />reclamation activities by Lafarge that are consistent with its approved Reclamation Plan. Access <br />is not going to be a problem as long as Lafarge continues to fill the ponds that were created by <br />mining activity in accordance with the approved Reclamation Plan.