Agree. Definitely Montrose. 318 and 340 were both in Montrose until about the end of narrow gauge operations there (I think 340 left first, going to Knott's Berry Farm). 2-8-0's were commonly used from Grand Junction to Montrose for the local freights, though the 1200 series 2-8-2's were used also. I have a real neat aerial photo of the Delta yard (I used to live in Delta) from the late 1940's with a 1200 sitting in the yard.
A piece of trivia. Deep in the Gunnison River canyon between Delta and Grand Junction (and on private land), there is a piece of "rock art" with a likeness of what appears to be a C-16 carved into the rock. No doubt carved by some bored railroader a century or so ago. People tend to forget that the line from Grand Junction to Montrose was originally part of the narrow gauge mainline. In fact, until about 10 years ago, when the UP reorganized their various Subdivisions and re-did mileposts, the mileposts on the Montrose Branch were the original mileages from Denver via Pueblo, Salida, Marshall Pass, Gunnsion and Montrose.