Exhibit_2_Mineral_Point_Ditch_Summary_and_Background.pdf

Description of Proposed Burrows Gulch Water Right Acquisition

Name: Mineral Point Ditch, Ditch No. 74

Location:

Upper Animas Watershed, Burrows Gulch, Mineral Point Area;

NMPM, T. 43 N., R. 7 W., sec. 36, NW¼;

37.56’43”N, 107.35’25”

Amount: 11 cfs

Water Right Case Number (Appropriation Priority No.): 1965-74

Decreed Uses: Stock water, domestic, fish culture, and irrigation purposes

Place of Water Use: Uncompahgre River valley between Ouray and Ridgway, 140 acres of agricultural/residential land (see Mineral Point Map)

Map of project location:

River miles from ditch to Silverton:

Party selling the water right:

Ronald Gibbs 2258 Willow Wood Road Grand Junction, Colorado 81507 970-242-5482

Urgent factors driving the acquisition: This water right has been for sale for an unknown period of time. The owner, when contacted in the fall of 2019, indicated that he would soon get more serious about selling. The Ouray valley land (see Mineral Point Map) which would benefit from the decreed water uses is listed for sale with a real estate agent and is advertised on a billboard at the side of Highway 550, 5 miles north of Ouray, as “land with water rights”. This water right has not been used in over 20 years and possibly rarely, if ever, since its creation according to the local Water Commissioner. Fall of 2019 was the first season it has been exercised/diverted likely since inception. It is likely that Burrows Gulch, from which this water is taken, will lose use of this water when sold to someone else in the Uncompahgre Watershed.

Burrows Gulch, which lies entirely above timberline, is characterized by lush wetlands and fens that depend upon abundant groundwater and surface water connections. These fens and wetlands provide filtering for both natural and man-caused heavy metal loading that occur in this basin.

The large spans of wetlands in this basin are likely to be adversely, maybe critically, impacted by the removal of this water. This water is taken via a controversial transbasinal ditch from the Animas Watershed to the Uncompahgre River via Mineral Creek, and ultimately from the San Juan River Watershed to the Colorado River Watershed. It is likely that characteristics that make this gulch especially unique will be dramatically altered by the removal of this water from the immediate basin if this water right is purchased for use in the Uncompahgre Valley. It also seems likely that it is only a matter of time before a purchase inevitably occurs.

Resource benefits from acquiring the water right: BLM’s acquisition of this water right would benefit Burrows Gulch by maintaining current water for wetland health, by improving the successful implementation of remediation actions taken within the Gulch, and by reaping the benefits of dilution of heavy metals within and downstream of Burrows Gulch, especially during snowmelt and rain events, all of which will ultimately help achieve the end goal of Bonita Peak Mining District (BPMD). Positive water diversion and drainage will be an important component of any CERCLA actions the BLM undertakes in Burrows Gulch. Having control of the water right will ensure that BLM can research and present the most beneficial cleanup alternatives to the public for their review and comment, and not be constrained by existing water rights and the location of the transbasinal ditch. AML actions at the Redcloud Mine, one of the 48 BPMD Superfund sites, will be heavily affected and far more effective if the transbasinal ditch could be reclaimed, retraining ground and surface waters to their more original course. Reclaiming the ditch would be BLM’s first course of action following an acquisition of this water right. By ensuring this water stays in the basin, adjacent landowners that also own BPMD sites within the Gulch would also be more effective in their remedies, which in turn would benefit downstream BLM lands and the watershed as a whole. Wetland and fens (on BLM and private) in the immediate basin would be kept in their current remarkable condition which in turn also benefits BLM by retaining their natural ability to filter heavy metals in ground and surface waters alike.

Not being able to reclaim the ditch and route the water back into the wetlands and fens into the basin below the site negatively impacts every possible design and construction scenario the BLM has considered.

So, these water rights are key to how BLM can proceed with the investigation and cleanup of the Burrows Gulch sites within the Bonita Peak Mining District Superfund Site. BLM has been delegated lead agency authority, even at Superfund Sites, for land under BLM jurisdiction, custody, or control, including the Burrows Gulch/Red Cloud Mining Complex which is the headwaters of the Upper Animas. If the lead agency determines that a removal action is appropriate, actions shall, as appropriate, begin as soon as possible to abate, prevent, minimize, stabilize, mitigate, or eliminate the threat to public health or welfare of the United States or the environment (40 CFR 300.415(a)(3)).

In addition to AML cleanup actions, almost all aspects of the resource would benefit: wetland and fens, wildlife, hydrology, recreation, and grazing by preserving and maintaining an outstanding gulch. Downstream users would benefit, including the Tribes; Counties of San Juan and La Plata, Colorado, and San Juan of New Mexico; Cities of Silverton, Durango, and Farmington, including municipal supplies; recreational users and advocates of the Animas including boaters, fisherman (Trout Unlimited); threatened, endangered, and sensitive species such as Southwest Willow Flycatcher, leopard frog, bighorn sheep, breeding riparian obligate migratory birds, and potentially Townsend’s big-eared and Allen’s Big Eared bats, if they are present; imperiled/vulnerable species Carex limosa (mud sedge) and the rare Draba rectifructa.

Special designations benefitted by the acquisition: Bonita Peak Mining District Superfund Site, Silverton Management Area, Silverton Special Recreation Management Area, Alpine Loop Backcountry Byway, Whitehead Gulch WSA, Weminuche Wilderness, Project benefited by the acquisition - list local AML project, plus any downstream projects and benefits- Following are all the current BPMD sites slated for actions in the next 5 to 20 years found in Burrows Gulch: BLM’s Redcloud Mine; 60% private, 40% public owned Ben Butler Mine; privately owned London Mine; privately owned Boston Mine, and privately owned Dewitt Mine. All amounts of dilution possible will directly benefit all AML projects in the Gulch as well as along the banks of the Animas.

Likely partners who would support the acquisition: All agencies involved in BPMD: CDPHE, EPA, DRMS, San Juan NF, as well as San Juan County, La Plata County, Town of Silverton, Town of Durango, BPMD Citizen’s Advisory Group, Trout Unlimited and all adjacent landowners in the basin as well as many downstream.

Likely stakeholder position on the acquisition: This acquisition would guarantee this flow would stay in the Animas River system and would therefore have very wide support in this time of community concern for this river.

Estimated cost of acquisition, based upon best available information (Beck said anything over $200K is extremely unlikely to get emergency funding and would have to go through normal LWCF process): When initially contacted in the fall of 2019, Mr. Gibbs noted that he had declined an offer from Town of Ouray for $100,000. He also stated when contacted in January of 2020 that for $150,000, it can be ours. These contacts would suggest our negotiation space would be somewhere between $100,000 - $150,000.

See pictures below: