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VI March 19, 2014 RECEIVED MAR 2h 2'914 DIVISION OF RE L AV4T!0N MINING AND SAr E j Y Mr. Peter Hays Environmental Protection Specialist State of Colorado Division of Reclamation, Mining, & Safety 1313 Sherman Street — Room 215 Denver, CO 80203 u RE. Loloff Construction, Inc. — Loloff Pit — Technical Revision No. 1 Request, File No. M- 1985 -112, Bond Calculations and Proposed Plan for Acquiring Water Rights Dear Mr. Hays, Loloff Construction, Inc. has received the Division's most recent comments /questions regarding the bonding calculations and water rights. We have completed draft bond calculations based on a phased mining approach for a slurry wall liner. Phase 1 is covered by the existing water rights Mr. Loloff currently owns. Phase 1 consists of 5.8 acres of exposed water surface which is already covered by the 1 share of New Cache (6.64 acre -feet per New Cache share) and 1 share of Greeley Irrigation Company (10.31 acre -feet per GIC share). Phase 2 covers the remaining 15.4 acres by bonding for a slung wall around the area (Please see the attached calculation for the costs associated with the slurry wall liner). Phase 3 covers the entire pit and would be added if additional area were to be exposed and mined. The Phase 2 bonding is what we would propose be bonded for initially. We understand that by going to a slurry wall lined pit for the reclaimed condition that it is likely an amendment will need to be completed for the permit and want to discuss this option with you. The second option that Loloff Construction, Inc. is proposing is to purchase additional water rights to cover the existing exposed area which we are calling Phase 1 and Phase 2. Phase 1 consists of 5.8 acres of exposed water surface which is already covered by Mr. Loloff's existing water rights. Phase 2 is the remaining 15.4 acres of exposed water surface that would require an additional 45 acre -ft (2.92 acre -ft per acre of exposed water surface). Loloff Construction, Inc. is proposing to have the additional water rights necessary to cover Phase 2 purchased within 120 days, and the remaining water rights necessary to cover Phase 3 in 12 months. Please feel free to contact me with any questions or comments. We would like to meet with you again to discuss the proposed bonding calculations and plan for acquiring water rights at your convenience. Sincerely, - i J.C. York, P.E. J &T Consulting„ Inc. cc: Mr. Don Loloff, Loloff Construction, Inc. 4r, 305 Denver Avenue — Suite D • Fort Lupton CO 80621 • Ph: 303 - 857 -6222 • Fax: 303 - 857 -6224 fC L