2014-05-19_GENERAL DOCUMENTS - C1981014 (2)

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K2T LLC South Central Land & Mining LLC 19 May 2014 Page 3 flooding, water levels, and if water is found, water quality. The responses of EFCI are set out in italics following each "Item" which are presented in this letter for ease of reference. Item 1: Well water quality. Quoted from Tena Gallagher's email to the Division on July 25, 2012, "Southfield Mine has been mined by Energy Fuels since 1985. Originally Dorchester Coal drilled Wells 10, 16, 18, and 23 into different coal seams. At the 2003 Bond release hearing before the Colorado Division of Mining, Geology and Safety, the property owners expressed concern about the water quality not meeting quality standards and lack of wells from which to take samples. The wells tested high in iron, manganese, and sulfites. Well 10 was mined through. Well 16 was dry starting in 2002, but later was tested in 2004 and 2005 and has been dry since then. Only Well 23 at 157 feet has been consistently tested. When Well 23 was tested in 2008, EF was sited for confusion regarding sampling constituents. EF was asked "to ensure that all future sampling is in exact accordance with the approved plan". Also the 2009 Annual Ilydrology plan was not filed by the due date and EF was cited." Response: The Division has recently had occasion to restate the situation with regard to water quality standards applicable to the Southfield Mine: "Given this discussion and review of the applicable regulations we can determine with certainty that water in Southfield's flooded mine workings, as well as water in coal or low permeability rock interbedded with coal down gradient of the flooded mine workings, does not need to meet water quality standards as indicated in the citizens complaint presented by the Vento family. " See Interoffice Memorandum, dated June 3, 2013, from Mike Boulay to Dan Hernandez With regard to the referenced water quality parameters, the Division has concluded that: "Based on analysis results there does not appear to be any significant decrease in coal seam groundwater quality resulting from the Southfield Mining operation as compared to coal seam groundwater quality prior to the Southfield Mine operation. " See Interoffice Memorandum, dated June 3, 2013, from Mike Boulay to Dan Hernandez It is correct that Well 10 was lost due to caving. The monitor wells are sampled twice a year as required by the applicable permit provisions and if water is detected, it is sampled and analyzed. The "confusion " on sampling was related to an incorrect form that the analytical lab used for a sample analysis in 2008. I do note believe any citations were issued related to the sampling.