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Mr. Fred Blumberg Page 2 <br />June 4, 2012 <br />plan approved herein. <br />In accordance with the letter dated April 30, 2010 (copy attached) from the Colorado <br />Division of Reclamation, Mining, and Safety ( "DRMS "), all sand and gravel mining operators <br />must comply with the requirements of the Colorado Reclamation Act and the Mineral Rules and <br />Regulations for the protection of water resources. The April 30, 2010 letter from DRMS requires <br />that you provide information to DRMS to demonstrate you can replace long term injurious stream <br />depletions that result from mining related exposure of ground water. The DRMS letter identifies <br />four approaches to satisfy this requirement. If the information you are providing to DRMS is <br />included under the approaches numbered 1 — 3, a copy of that information needs to also be <br />provided to this office (the Division of Water Resources). <br />If the information you are providing to DRMS is pursuant to approach no. 4, you will need <br />to provide additional documentation to this office that specifies what water rights or other <br />permanent water source will be dedicated to the SWSP to assure that all permanent depletions <br />from either an unforeseen abandonment of the site by the Applicant or as a result of long term <br />ground water exposure after completion of mining and reclamation will be replaced so as to <br />prevent injury to other water rights. <br />Depletions <br />Depletions from the Portland Plant consist of evaporative losses and operational losses <br />due to dust control and water removed within the mined product. No groundwater in addition to <br />the 2.37 acres of free water surface area (2.1 acres from North Pit Pond, 0.19 acre from East Pit <br />Pond, and 0.08 acre from Glory Hole Sump) are expected to be exposed during this plan period. <br />You have calculated the evaporative losses from the gross evaporation for the area, <br />which you state to be 50.95 inches, and taking the effective precipitation credit as 70% of actual <br />precipitation. You have calculated the net evaporative loss to be 7.94 acre feet for this plan year <br />(see attached Table 1). <br />Operational losses include dust suppression and water removed in the mined product, <br />which is quantified in Table 2 (attached). Water removed in the mined product was calculated <br />using a value of 2% water content by weight, as the mined product is being removed from below <br />the water table, but in a dewatered state. You have calculated those losses based on the <br />previous year's accounted operational values, and have estimated the depletion associated with <br />pumping for dust suppression to be 15.76 acre -feet and the depletion associated with water <br />removed from the mined product to be 16.3 acre -feet. The total depletion for the plan period, as <br />shown in the attached Table 2, is estimated to 40 acre -feet. A proposed accounting sheet for <br />depletions during this plan period are presented in the attached Table 3. <br />Replacements <br />The total augmentation requirement, which consists of 40 acre -feet, will be replaced to <br />the Arkansas River from a lease with Pueblo Board of Water Works (PBWW) for 40 acre -feet <br />over this plan period. Information corresponding to the lease of surplus water from PBWW, <br />including a proposed delivery schedule, is included as an attachment to this approval letter. <br />Conditions of Approval <br />