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GCC <br />GCC Energy, LLC <br />Telephone: 970.385.4528 6473 County Road 120 <br />Energy "Safety as a Value" Facsimile: 970.385.4638 Hesperus, CO 81326 <br />July 14, 2015 <br />State of Colorado <br />Division of Reclamation, Mining 8v Safety <br />691 CR 233, Suite A-2 <br />Durango, CO 81301 <br />Attention: Robin Reilley, Environmental Protection Specialist <br />Re: 2nd Quarter 2015 Surface Subsidence Inspections <br />2nd Quarter 2015 Huntington Ditch Inspections <br />Ms. Reilley: <br />A complete inspection for effects of subsidence was conducted on April 21, 2015 by <br />Marcia Talvitie of CDRMS, Christine Belka and Tom Medlin of OSMRE, Dan <br />Huntington, surface landowner and Tom Bird of GCC Energy. Tom Crawford <br />accompanied the group for the areas where mining had occurred beneath Crawford <br />Ranch property. Following are excerpts from Ms. Talvitie's report of that inspection: <br />Mining at King I was concluded in 2008. Most of the surface overlying the underground <br />workings is owned by either Huntington Ranches or the Crawford family. The <br />landowners monitor their own properties on a regular basis, and will notify the operator <br />if any potential new areas of subsidence are identified. <br />Dan Huntington met us at the King II office, and drove us to the areas of his property <br />that overlie King I. Portions are irrigated by the Huntington Lateral that comes off the <br />Hay Gulch Irrigation Ditch. Mr. Huntington explained that there are 15 or 16 <br />shareholders on the ditch, and that he is the majority shareholder. Shares fall with three <br />different priorities, with three different classes. Class A shares are dated 1898; Class B <br />are 1915; and Class C have a date of 1965. <br />The Huntington Lateral is generally an open channel. Over the decades, the ditch has <br />become somewhat incised into the land surface. One segment of the ditch was lined by <br />GCC, perhaps 20 years ago, as a preventative measure to protect the ditch from any <br />subsidence -related impacts. The lining is still in good condition. Mr. Huntington said a <br />ditch loss study was conducted as part of the process of developing the decree by which <br />a portion of his shares are leased to GCC. The study showed that losses were negligible. <br />Part of the Huntington Lateral is directed into a pressurized PVC pipeline. A pond <br />constructed at the intake allows continuous flow in the line (Photo 12). The pipeline is <br />15" in diameter at the upstream end, and is then reduced to 12" and 10" further down <br />