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W <br />LAWRENCE JONES CUSTER GRASMICK LLP <br />ATTORNEYS AT LAW <br />5245 RONALD REAGAN BLVD., SUITE 1 <br />JOHNSTOWN, COLORADO 80534 (ikm <br />TELEPHONE: 970- 622 -8181 <br />TELECOPI ER: 970 -660 -4412 <br />W W W.LICGLA W.COM <br />KIMna LICGLAW.COM <br />KIM R. LAWRENCE • P. ANDREW JONES • KELLY J. CUSTER • BRADLEY C. GRASMICK • DAVID P. JONES - ALYSON K. SCOTT <br />April 30, 2012 RECEIVED <br />Mr. Peter S. Hays r <br />Environmental Protection Specialist APR 3 0 2012 <br />Division of Reclamation, Mining and Safety <br />Division of Reclamation. <br />1313 Sherman St., Room 215 <br />Mining &Safety <br />Denver, CO 80203 <br />Re: Loloff Construction Inc., Loloff Mine, Permit No. M- 1985 -112 <br />-'Exposed Water Compliance Process <br />Mr. Hays: <br />The Division has identified four approaches for owners /operators to address the <br />mitigation of depletions from exposed groundwater, 1) backfilling 2) plan for <br />augmentation, 3) slurry wall or clay liner, and 4) approval from the Division of <br />Water Resources. <br />The Division's February 2, 2012 letter addressed the slurry wall or clay liner <br />option proposing a financial warranty in the amount of $1,443,700 payable over <br />three years. This not a cost effective or affordable option to address exposed <br />water compliance for Loloff Construction (Loloff). I note the Division states it will <br />work with operators on an individual basis to implement a plan to address <br />mitigation of depletions. <br />The Permit for the Loloff Mine was approved in 1985. Loloff gave a Performance <br />Warranty and a Certificate of Deposit for $58,200 in 2006. Loloff has <br />investigated the cost of slurry wall construction and opportunities to use the <br />reclaimed and lined pit for water storage once mining is complete. There is no <br />interest from water providers at the present time in using the pit for water <br />storage. The cost to install a slurry wall is substantial and beyond the means of <br />Loloff. <br />Currently the mine is and has been in compliance with requirements of the <br />Division of Water Resources based on the annual filing of a Substitute Water <br />Supply Plan (SWSP) pursuant to §37 -90- 137(11) C.R.S. Well Permit No. 74793 -F <br />was issued for the pit. The majority of the water supplies used in the SWSP are <br />