Coal mining operations in northwestern Colorado commonly are located in areas that have minimal available water-resource information. Drainage-basin models can be a method for extending water-resource information to include periods for which there are no records or to transfer the information to areas that have no streamflow-gaging stations. To evaluate the magnitude and variability of the components of the water balance in the small drainage basins monitored, and to provide some method for transfer of hydrologic data, the U.S. Geological Survey 's Precipitation-Runoff Modeling System was used for small drainage basins in the southern Yampa River basin to simulate daily mean streamflow using daily precipitation and air-temperature data. The study area was divided into three hydrologic regions, and in each of these regions, three drainage basins were monitored. Two of the drainage basins in each region were used to calibrate the Precipitation-Runoff Modeling System. The model was not calibrated for the third drainage basin in each region; instead, parameter values were transferred from the model that was calibrated for the two drainage basins. For all of the drainage basins except one, period of record used for calibration and verification included water years 1976-81. Simulated annual volumes of streamflow for drainage basins used in calibration compared well with observed values; individual hydrographs indicated timing differences between the observed and simulated daily mean streamflow. Observed and simulated annual average streamflows compared well for the periods of record, but values of simulated high and low streamflows were different than observed values. Similar results were obtained when calibrated model parameter values were transferred to drainage basins that were uncalibrated. (USGS)