2013-06-03_GENERAL DOCUMENTS - C1981014

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Dan Hernandez Page 10 June 3, 2013 Notice of Violation CV- 2013 -002, issued to Energy Fuels Coal, Inc on January 28, 2013 for the permittee's failure to ensure that the well continues to function as designed. Likewise, MW -16 is very limited in its usefulness as a monitoring well. The well has silted -up to approximately 110 feet below ground surface leaving 4 feet of perforated casing above the current depth. Since the well screen is 30 feet in length the coal seam is no longer monitored. It now monitors only a very small portion of the Vermejo above the coal. MW -16 has been dry beginning in December 2001 until June 2004 and has remained dry from 2006 -2011. MW -23 and MW -65 are the only viable wells remaining in the monitoring plan. MW -23 is up- gradient from the mine workings and is completed in the Red Arrow Coal Seam. MW -65 is completed in the Jack O'Lantem Coal Seam and is down gradient from all Southfield Mine workings. The ongoing monitoring program was initiated in 1981. Evaluation of groundwater quality is based upon chemical analyses of groundwater samples from the monitoring wells described above. Chemical parameter were selected for analyses using DRMS's guidance document Guidelines for the Collection of Baseline Water Quality and Overburden Geochemistry Data. The baseline conditions as described in the PAP were compared to recent available data from the Annual Hydrology Reports. These data were tabulated for each of the three monitoring wells in current monitoring plan for which data is available for. Indicator parameters including TDS, Mn, and Fe were selected for comparison because they are important parameters and they are required by Rule 2.04.7 for baseline characterization. A summary table one for each well (MW- 16, MW -23, and MW -65) is included in Appendix D. The data do not show any significant trends between the baseline information and recent samples. Likewise there is no discernible trend between up- gradient and down - gradient monitoring points. All three wells for which baseline data was collected showed exceedances of the iron and manganese standards in the baseline samples (Regulation No. 41 The Basic Standards for Ground Water, Table 2 — Domestic Water Supply). Samples from MW -23 and MW -65 exceeded the manganese standard in more recent samples from these wells on several occasions. However, the manganese exceedances in these wells is on the same order of magnitude as the baseline samples so no discernible trend is identifiable. As stated in the PAP, groundwater within the mine area has a neutral pH and relatively high levels of sodium, sulfate, and iron. 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. Surface Water Considerations The mine and adjacent areas are drained by the Magpie, Newlin and Second Alkali Creek drainage. Newlin Creek is considered a perennial stream from its headwaters to the point of diversion for the City of Florence municipal water supply upstream of the mine area. With diversion of essentially the entire surface base flow of Newlin Creek, flows down gradient of the diversion are ephemeral as are flows for Magpie and Second Alkali Creeks. Due to either limited drainage areas or upstream diversion, the ephemeral drainages typically flow only in response to runoff from spring snowmelt and major thunderstorm events Except for sporadic flow occurrences, the ephemeral stream channels are typically dry throughout much of the year When flow does occur a significant portion of surface flow is lost to the groundwater system