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Paul Flack <br />September 1, 2011 Page 2 of 3 <br />operating the exchange of water from Trinidad Reservoir up to the point of diversion. If no <br />exchange potential exists, NEM would be injuring existing water rights by pumping from the <br />Purgatoire River and the exchange will not be allowed to occur. <br />2. NEM shall inform Trinidad that it has authorized District 19 Water Commissioner to direct <br />the release of NEM's leased water to replace depletions concurrently with out of priority <br />diversions. <br />3. NEM must provide a copy of a fully executed lease agreement with Trinidad, including <br />receipt of payment, to this office prior to the initial diversion. NEM must also provide <br />evidence of payment for each additional quantity leased in the form of a receipt identifying <br />the Tier level and amount of water leased while operating under the terms of this approval. <br />4. NEM shall install and maintain a measuring device for diversions from the Purgatoire River <br />that is acceptable to the Division Engineer. Reporting of daily diversions must be provided to <br />the Water Commissioner on a weekly basis during the non - irrigation season (October 15 <br />through April 15) and on a daily basis during the irrigation season. Reporting procedures are <br />subject to approval and modification by the Water Commissioner and Division Engineer. <br />5. Prior to storing water in the on -site pond, a measurement method for determining stored <br />content must be installed, such as a vertical staff gage or other method approved by the <br />Division Engineer. The staff gage shall correlate to an area capacity table in increments of <br />hundredths for the pond. <br />6. Mine discharge water must not be stored in the on -site pond that contains the other <br />fully consumable water. Use of the discharge water may only be approved pursuant to <br />a substitute water supply plan (SWSP) or court approved augmentation plan with an <br />accompanying well permit and engineering report. <br />7. Water leased from the City of Trinidad's account /storage in the Trinidad Project may not <br />be used outside of the PRWCD boundary, per the Trinidad Project's Operating Principles. <br />Therefore, any future lease of Trinidad's water by New Elk Mine beyond March 31, 2012 <br />must be approved pursuant to a SWSP or court approved augmentation plan. <br />8. This plan may be revoked or modified at any time should it be determined that injury to <br />other vested water rights has or will occur as a result of the operation of this plan. <br />Should this approval expire without renewal or be revoked, all diversions of water must <br />cease immediately. <br />9. This approval shall not create any presumptions, shift the burden of proof, or serve as a <br />defense in a pending water court case or any other legal action that may be initiated <br />concerning this operation. This decision shall not bind the Division or State Engineer to act <br />in a similar manner in any other applications involving other plans or in any proposed <br />requests pertaining to this matter. <br />Should you have any questions, please contact the Division 2 Augmentation Coordinator, Justin <br />Zeisler, (719- 542 -3368 or Justin.Zeisler©state.co.us) if you have questions or comments. <br />