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s <br />• s w <br />0 <br />February 11, 2011 DRAFT Climax - Eagle Park Reservoir Co. Agreement <br />1. Eagle Park Reservoir Project Purchase and Sale Agreement. Climax and the <br />Reservoir Company entered into a Purchase and Sale Agreement for the Eagle Park <br />Reservoir Project dated June 17, 1998, recorded at Reception No. 666203 of the Eagle <br />County records (the "Purchase and Sale Agreement'). Paragraph 15 of the Purchase and Sale <br />Agreement contains a number of covenants of Climax to prevent the water quality <br />contamination of Eagle Park Reservoir and protect the quantity of water available for storage <br />in the reservoir. The Parties agree that the relevant terms of the Purchase and Sale <br />Agreement including, without limitation, the terms of Paragraph 15, remain in full force and <br />effect and are not modified by this Agreement. <br />2. Quality of ground water tributary to Eagle Park Reservoir. Climax's <br />reclamation permit amendment anticipates, over time, that Climax will raise the No. 3 Dam <br />on the Tenmile Tailings Storage Facility (TSF) by approximately 28 feet, where it will <br />approach the current crest of No. 2 dam on Robinson Pond (a/k/a Robinson TSF). Under <br />current conditions, the ground water seepage from the Tenmile TSF and Robinson Pond <br />• flows to a seepage collection system and evacuates away from Eagle River drainage. <br />However, the Reservoir Company, the District and the Authority expressed concern that <br />raising the dam could cause a change in flow direction of the ground water, potentially <br />allowing seepage from Tenmile TSF to enter the Eagle River drainage and affect water <br />quality in Eagle Park Reservoir. Climax will continue to monitor ground water and surface <br />water quality above Eagle Park Reservoir between the Eagle Park Reservoir and Robinson <br />Pond/Tenmile TSF. Climax will promptly share all such ground and surface water quality <br />data with the Reservoir Company, the District and the Authority. Should this monitoring <br />reveal ground water seepage from Robinson Pond/Tenmile TSF into the Eagle River <br />drainage that is not controlled or collected in the existing systems and that would <br />detrimentally affect water quality in the Eagle Park Reservoir, Climax will act to prevent the <br />contamination of Eagle Park Reservoir water pursuant to its obligations under Paragraph 15 <br />of the Purchase and Sale Agreement and this Agreement. Climax's monitoring program is <br />subject to the review and approval of the Reservoir Company, the District and the Authority. <br />3. Potential impacts from additional storage of process water in Robinson Lake. <br />(a) Robinson Lake is a process water storage reservoir above Eagle Park Reservoir. The <br />AM-06 application anticipates future increase in water stored in Robinson Lake consistent <br />with the constructed reservoir capacity. This storage increase is being accomplished through <br />the removal of sediments within Robinson Lake, with no increase to the height of the dam. <br />During the completion of the Eagle Park Reservoir reclamation work in 1997, a cutoff wall <br />was installed between Robinson Lake and the Eagle Park Reservoir. The Robinson Lake <br />• Seepage Pump System, as described in the Purchase and Sale Agreement at paragraphs 2(b) <br />and 9(d), is also currently in place at the toe of the Robinson Dam at the cutoff wall. The <br />Robinson Lake Seepage Pump System consists of a seepage collection system, pump station