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Permit Renewal No. 7 Review Process <br />On October 7, 2010 the Division notified MCM that mining and reclamation permit C-80-004 for <br />the McClane Canyon Mine would expire on July 6, 2011. The Division requested pursuant to Rule <br />2.08.5, that a renewal application be received in the Division office on or before January 7, 2011. <br />MCM's application for Successive Renewal No. 7 (RN-07) of Permit C-80-004 was received by <br />the Division on December 3, 2010. The application included a renewed certificate of insurance, in <br />addition to the required application form and proposed newspaper public notice. The application <br />was deemed complete on December 13, 2010, and notices were provided to various local, state, <br />and federal agencies on that date. <br />The Office of the State Engineer Division of Water Resources (SEO) was the only agency that <br />responded to the notification. In a letter dated January 11, 2011 the SEO identified several <br />concerns with the proposed project as summarized below. <br />• If the stream system at this location becomes over appropriated, the storage and use of <br />any surface or ground water would be subject to administration. <br />• If any of the sediment ponds expose groundwater, the pond must be backfilled <br />immediately until a well permit issued pursuant to CRS 37-90-137(2), allowing the <br />exposure of groundwater in a pit is obtained from the State Engineer. <br />• The SEO has no records of permits for the existing monitoring wells on site. As stated in <br />the SEO's letter, if these wells were completed without a valid monitoring hole notice or <br />well permit the applicant needs to take immediate action to plug or permit the wells. <br />• Last, the SEO notes that the applicant states that portions of the site may affect current <br />surface water diversions. If at any point the applicant's operations will affect surface <br />diversions they should consult with the local water commissioner to assure no injury to <br />water rights occur. <br />In a letter dated April 25, 2011 J.E. Stover & Associates, Inc. on behalf of MCM adequately <br />responded and addressed all of the SEO's concerns as follows. <br />• MCM recognizes that if the stream system at the mine becomes over appropriated, the <br />storage and use of any surface or groundwater would be subject to administration. <br />• If a sediment pond exposes groundwater it will be backfilled immediately and redesigned <br />so no groundwater is exposed. <br />• MCM intends to apply for permits for the existing monitoring wells on site. As described <br />below MCM submitted Permit Revision No. 2 within the same timeframe as the renewal <br />application and with PR-2 they are proposing substantial changes to the mining and <br />reclamation plan including modifications to their groundwater monitoring program. As <br />5