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Ccs <br />A <br />Applegate <br />Group, inc. <br />'March 29, 2011 <br />Mr. Tony Waldron <br />Colorado Division of Reclamation, Mining and Safety <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />RE: Substitute Water Su ply Pl n for Wagner-Kauffman #3 Pit (WDID 0402529) <br />DRMS Permit No. -99-069 <br />Section 17, 20 and 21, T5N, R68W, 6th P.M. <br />Water Division 1, Water District 4, Larimer County <br />Dear Mr. Waldron: <br />This letter is written on behalf of our client, Jake Kauffman & Son, Inc. and their gravel pit listed <br />above, called Wagner-Kauffman Pit #3. We recently received approval for a Substitute Water <br />Supply Plan (SWSP) from the Division of Water Resources (DWR) in their December 9, 2010 <br />letter to us (please see attached). The Division of Water Resources approval letter referenced an <br />April 30, 2010 letter from the Colorado Division of Reclamation, Mining and Safety (DRMS) <br />requesting compliance from all gravel pit operators within both the Colorado Land Reclamation <br />Act for the Extraction of Construction Materials and the Mineral Rules and Regulations of the <br />Colorado Mined Land Reclamation Board for the Extraction of Construction Materials. The <br />DRMS letter outlined 4 different options for gaining compliance within the stated rules and act, <br />and requested every gravel pit operator to select one of these options and provide the DRMS <br />with proof of the selected option. Additionally, the DWR also requested a copy of the letter <br />providing proof of compliance with the DRMS. <br />Therefore, we would like to inform the DRMS that for the Wagner-Kauffman #3 Pit, we have <br />selected Option No. 1: file a financial warranty that will ensure backfilling of the pit to cover the <br />exposed groundwater to a depth of two feet above the static ground water level. The financial <br />warranty for said pit has already been filed with the DRMS for many years. Attached you will <br />find a February 13, 2006 letter from the Colorado Division of Minerals and Geology (DMG) <br />stating approval of the proposed financial warranty revision for the Wagner-Kauffman #3 Pit. In <br />this letter, the estimated cost of reclamation is clearly outlined. We have also included the April <br />18, 2006 letter from the DMG that states acceptance and receipt of the surety bond supplied for <br />Wagner-Kauffman #3 according to the financial warranty plan. The financial warranty for the <br />reclamation of the mining area has been in effect since the mining permit was first issued in <br />1999. Only the most recent revision and approval are included with this letter. <br />1499 W. 120th Avenue, Suite 200 118 W. 6th Street, Suite 100 <br />Denver, CO 80234 Glenwood Springs, CO 81601 <br />303-452-6611 <br />www.applegategroup.com