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Ms. Kim Frick <br />October 18, 2011 <br />Page 2 <br />The proposed mining reclamation for the Derr Pit is a Tined storage reservoir. <br />In accordance with the letter dated April 30, 2010 (copy attached) from the <br />Colorado Division of Reclamation, Mining, and Safety ( "DRMS "), all sand and gravel <br />mining operators must comply with the requirements of the Colorado Reclamation Act <br />and the Mineral Rules and Regulations for the protection of water resources. The April <br />30, 2010 letter from DRMS requires that you provide information to DRMS to demonstrate <br />you can replace long term injurious stream depletions that result from mining related <br />exposure of ground water. The DRMS letter identifies four approaches to satisfy this <br />requirement. For the Derr Pit, it is our understanding that approach no. 1 or no. 3 will be <br />utilized as evidenced by the Applicant's proposal to obtain a bond in the amount of <br />$1,362,889 prior to the exposure of ground water at the Derr Pit. Prior to the exposure of <br />ground water at this site, the Applicant is required to provide proof to this office (the <br />Division of Water Resources) that such a bond has been obtained and the requirements <br />of the April 30, 2010 letter from DRMS have been satisfied. <br />Depletions <br />This SWSP describes the water uses from October 1, 2010 through December 31, 2012 <br />for this pit. The total consumptive use of ground water at the Derr Pit (including evaporative <br />and operational losses) is estimated to be 11.55 acre -feet. You have provided a monthly <br />breakdown of the annual depletions totaling 2.19 acre -feet of evaporative loss from 0.75 acres <br />of exposed surface area, 2.00 acre -feet of water used and consumed for dust control and 7.36 <br />acre -feet of water lost with the mined product (250,000 tons of aggregate). The average <br />precipitation from the Greeley UNC weather station for the years 1967 to 2009 was used to <br />determine the net consumptive use from evaporation. The average precipitation for this time <br />period is 14.2 inches. No phreatophyte credit has been applied to this SWSP. <br />Since continuous dewatering of the site is proposed throughout the operation, the <br />depletions from the "first fill" as contemplated in the previous SWSP will not occur. <br />A stream depletion model was used to determine the lagged depletions to the Cache La <br />Poudre River. The following parameters were used in the model: harmonic transmissivity (T) = <br />76,056 gallons per day per foot, specific yield (SY) = 0.2, the distance of the exposed ground <br />water to the river X = 2,124 feet, and the location of the parallel impermeable boundary was <br />estimated to be 14,115 feet from the stream. Because this is a new proposed mining operation, <br />no ground water was exposed at this location prior to January 1, 1981. The stream depletion <br />model shows that the Applicant must replace 4.39 acre -feet for the period of October 2010 <br />through December 2011 and 8.54 acre -feet from January 2012 through December 2012. <br />Replacements <br />The source of replacement water to be used for this SWSP is a lease of 57.66 acre -feet <br />of reusable effluent from the City of Greeley ( "Greeley "). A copy of the lease agreement with <br />Greeley for 57.66 acre -feet of fully consumable effluent from Greeley's Wastewater Treatment <br />Plant ( "WWTP ")(WDID 0302312) to be used at the Derr Pit was submitted to this office with the <br />previous SWSP request and is attached to this letter. The lease is currently valid until <br />December 2011. Greeley's WWTP discharge point is located approximately 0.8 miles upstream <br />