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Mr. Jared Dains 4 .5 Applegate Group, Inc. 1499 West 120 Avenue, Suite 200 Denver, CO 80234 -2728 DEPARTMENT OF NATURAL RESOURCES DIVISION OF WATER RESOURCES March 30, 2012 Re: SerFer Substitute Water_Su Iv Plan (WDID No. 0302534) SerFer Pit, DRMS File No.+9 -2008 -006 (WDID No. 0303028) Section 24, T6N, R68W of the 6 P.M. Water Division 1, Water District 3 Approval Period: April 1, 2012 through March 31, 2013 Contact Phone Number for Mr. Dains: 303 - 452 -6611 RECEIVED AR 3 0 2012 Mike King Executive Director Division of Reclamation, Mining & Safety John W. Hickenlooper Governor Dick Wolfe, P.E. Director /State Engineer Dear Mr. Dains: This letter is in response to your letter dated February 14, 2012 on behalf of Connell Resources, Inc. (Applicant) requesting renewal of the above referenced substitute water supply plan (SWSP) for the SerFer Pit to cover depletions caused by gravel mining operations in accordance with § 37 -90- 137(11), C.R.S. The required renewal fee of $257 has been submitted (receipt no. 3654079). The most recent SWSP renewal was approved on October 11, 2011 and expires on March 31, 2012. Plan Operations This plan seeks to replace depletions resulting from the mining at the SerFer Pit. The depletions that result from the proposed dry- mining operation include evaporation, dust control, and water lost in mined product. The Applicant has constructed dewatering trenches to allow for dry- mining and to reduce the evaporative losses associated with the operation. The water is pumped to settling ponds before being discharged to the Cache la Poudre River. SerFer Pit mining operations began in January 2011 and was expected to last approximately 4 years. Due to unfavorable economic conditions a precise end date is unknown. Once reclamation is complete, a lined reservoir will be created and will have a total surface area of approximately 20 acres. The proposed replacement source is excess credits resulting from a recharge project at the Timnath- Connell Pit. In accordance with the letter dated April 30, 2010 from the Colorado Division of Reclamation, Mining, and Safety ( "DRMS "), all sand and gravel mining operators must comply with the requirements of the Colorado Reclamation Act and the Mineral Rules and Regulations for the protection of water resources. The April 30, 2010 letter from DRMS required that you provide information to DRMS to demonstrate you can replace long term injurious stream depletions that result from mining related exposure of ground water. A response to the DRMS letter documenting compliance has not been received. Your reclamation plan includes lining the site and in 2008 you obtained a bond for $328,445 through DRMS to cover your reclamation plan. Future SWSP renewals may limit the annual amount of ground water to be appropriated to not exceed the Office of the State Engineer •• (/ �✓ 1313 Sherman Street, Suite 818 • Denver, CO 80203 • Phone: 303 - 866 -3581 • Fax: 303 - 866 -3589 www.water.state.co.us