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Mr. Jared Dains Page 6 <br />May 11, 2011 <br />requires that you provide information to DRMS to demonstrate you can replace long term <br />injurious stream depletions that result from mining related exposure of ground water. The <br />DRMS letter identifies four approaches to satisfy this requirement. The 4t" approach <br />requires documentation to identify what water rights or other permanent water source will <br />be dedicated to the SWSP to assure that all permanent depletions from either an <br />unforeseen abandonment of the site by the Applicant or as a result of long term ground <br />water exposure after completion of mining and reclamation will be replaced so as to <br />prevent injury to other water rights <br />In accordance with approach no. 4, you have provided an affidavit dated November <br />23, 2010 that dedicates 5.75 Taylor and Gill Ditch shares water as replacement water solely <br />for this SWSP for as long as there are depletions at this gravel pit site or until such time as <br />another replacement source is obtained. A copy of the affidavit is attached to this letter. <br />For the purposes of this SWSP, this affidavit will be accepted for the dedication of the <br />shares; however, if the State Engineer determines that a different affidavit or dedication <br />process is necessary to assure proper dedication of the shares, additional information may <br />be required prior to future SWSP approvals. <br />Also in accordance with approach nos. 1 and 3, you have indicated that a bond has <br />been obtained for $1,984,000 for the Overland Ponds Site Pit, $117,600 for the Home Office <br />Pit, and $470,124 for the North Taft Hill Expansion Site Pit through DRMS. <br />A monthly breakdown of the stream depletions from the mining operation as well as the <br />replacements made by lagged timing of the historical consumptive use credit is shown in the <br />attached Table 5. <br />I hereby approve this substitute water supply plan, in accordance with Section 37-90- <br />137(11), C.R.S., subject to the following conditions: <br />Conditions of Approval <br />1. This plan is approved with the effective date of November 1, 2010 and shall be valid through <br />December 31, 2011 unless otherwise revoked or modified. If this plan will not be made absolute <br />by a water court action by the plan's expiration date, a renewal request must be submitted to <br />this office with the statutory fee (currently $257 for each mining site) no later than November <br />15, 2011. <br />2. A well permit must be obtained for the current use and exposed surface area of the Home <br />Office Pit site and the Overland Ponds site in accordance with § 37-90-137(2) and (11), C.R.S. <br />in conjunction with this plan. A well permit application for the Overland Ponds site has been <br />submitted (receipt no. 3648916) and this application is pending evaluation. An application for <br />the Home Office site was submitted on June 6, 2010 and this application was returned to the <br />Applicant for 600-foot spacing issues. The provisions of Colorado Revised Statute 37-90- <br />137(2) prohibits the issuance of a permit for a well to be located within 600 feet of any existing <br />well, unless the State Engineer finds that circumstances so warrant after a hearing held in <br />accordance. with the procedural rules in 2CCR402-5. This hearing may be waived if you are <br />able to obtain statements from the owners of all wells within 600 feet, verifying that they have <br />no objection to your use of the proposed well. Should a new well permit be denied for reasons