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*DESERADO MINE <br />BLUE MOUNTAIN ENERGY <br />3607 County Rd. 65 <br />Rangely, CO 81648 <br />(970)675 -4300 <br />fax(970)675 -4399 <br />July 23, 2014 <br />Mr. Zach Trujillo <br />Division of Reclamation, Mining and Safety <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />RE: Permit Renewal #6 Mining Permit No. C -1981 -018. <br />Blue Mountain Energy, Inc. — Deserado Mine. <br />Dear Zach: <br />The following is in response to your letter of July 21, 2014 addressing the adequacy review for <br />Permit Renewal No. 6 (RN -6). Items 1 through 7 have been adequately resolved. <br />Item 8 addresses discrepancies in calculated affected and disturbed acreages. We are in <br />agreement with your assessment of the `disturbed' acreage of 471.79 acres. My prior accounting <br />missed including the acreage increase from TR -69. <br />I reevaluated the `affected' acreage and am revising the proposed affected acreage to 8205.33 <br />acres. While there were several refinements the main reason for the increase was the <br />reorientation of the small group of panels in the D -seam that are planned near the end of the <br />mining. This evaluation also identified Red Wash Reservoir No. 3 as an impoundment that will <br />be subsided in the future. This is a small impoundment that rarely holds water and will likely be <br />minimally impacted due to the depth of cover in this area. Page III -9, Section III.A.7.a has been <br />updated to address this change in the permit. <br />We reviewed the revised reclamation cost estimate of $5,621,987.38 and find it acceptable. <br />If you have any questions please contact me at 970 - 675 -4322. <br />Scott Wanstedt <br />Environmental Engineer <br />cc: Jeff Dubbert <br />Paul Daggett BLM <br />Alan Boehms OSMRE <br />enc.: <br />