2012-09-07_HYDROLOGY - M1985112

• Permit No: M1985112
• IBM Index Class Name: HYDROLOGY
• Doc Date: 9/7/2012
• Doc Name: DIVISION RESPONSE
• From: DRMS
• To: LOLOFF CONSTRUCTION
• Email Name: PSH
• Media Type: D
• Archive: No

DIVISION OF RECLAMATION, MINING AND SAFETY
Department of Natural Resources
1313 Sherman St., Room 215
Denver, Colorado 80203
Phone: [phone]
FAX: [phone]
September 7, 2012
Mr. Don Loloff
Loloff Construction, Inc.
P.O. Box 518
Kersey, CO 80644
Re: Loloff Construction, Inc., Loloff Mine, Permit No. M- 1985 -112
Exposed Groundwater Compliance Process - Division Response and Sept. 6 Meeting
Dear Mr. Loloff:
Mined Land Reclamation
STATE OF COLORADO
COLORADO
DIVISION O F
RECLAMATION
MINING
SAFETY
John Hickenlooper
Governor
Mike King
Executive Director
Loretta Pineda
Director
On April 30, 2012, the Division of Reclamation, Mining and Safety (Division) received a letter in
response to the Division's exposed groundwater compliance process letter dated February 2, 2012
from Mr. Kim R. Lawrence of Lawrence Jones Custer Grasmick LLP attorney for Loloff Construction,
Inc. (Loloff).
The letter states the Division's proposed financial warranty to install a slurry wall to address the
exposed groundwater compliance requirement for Loloff Pit in the amount of $1,443,700 is
beyond the means of Loloff. The letter further states Loloff has investigated opportunities to use
the reclaimed and Tined pit for water storage by water providers; however there is no interest at
present time.
As an alternative to the slurry wall approach to gain compliance, the letter requests Loloff should
have the opportunity to use an augmentation plan to mitigate depletions. The letter states the
cost of purchasing replacement water for an augmentation plan is Tess expensive than the cost to
install a slurry wall. The cost of water was estimated to be $650,000 by Applegate Group, Inc.
(Applegate) in 2011 for 34 acres of exposed water surface at the end of mining.
The Division agrees the augmentation plan approach to address the mitigation of depletions from
exposed groundwater is the most effective solution. The letter proposes to establish an Individual
Reclamation Fund as described by Rules 4.3.8 and 4.11. The purpose of the fund would be to
purchase replacement water until sufficient water rights are available for the final augmentation
plan to be decreed. The establishment of an Individual Reclamation Fund to purchase water rights
is not a viable option to the Division, due to the amount of time required to purchase water rights.
On September 6, 2012, the Division, the Loloff's and their representatives met to discuss the
situation and determine possible alternatives to achieve compliance for the Loloff Pit. During the
meeting, the Division agreed to withdraw the requirement of bonding for the installation of a
slurry wall, since it does not appear to be a viable option for the site. The Division proposed a plan
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