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2015 Annual Hydrology Report Energy Fuels Coal, Inc. - Southfield Mine <br />Loadout Area <br />In the Loadout Area, groundwater occurs primarily in alluvial/colluvial deposits in and adjacent to <br />the Oak Creek flood plain. Due to limited surface and groundwater flows and recharge and the <br />character of the alluvial/colluvial deposits, these deposits do not appear to store or transmit <br />significant quantities of water, as indicated by the lack of sub -irrigation. A 2003 evaluation at the <br />site, performed by the Fremont County Soil Conservation Service, concluded that no AVF areas <br />exist within the Loadout permit boundary. <br />Because the alluvial/colluvial deposits associated with Oak Creek do not represent a significant <br />groundwater source or aquifer, no groundwater monitoring was ever required at the Loadout site or <br />immediate vicinity. <br />3.2 Monitoring Well Inspections <br />The condition of monitor wells is ascertained at the time each well is monitored. Typically the <br />wells have been found in good condition, although EFCI did replace several well caps in 2001/2002 <br />to assure ongoing access control and to prevent contamination from entering the wells. Monitor <br />wells MW -16, MW23, and MW -65 were performing as designed for obtaining representative water <br />samples through the period of this report. <br />The physical condition of monitoring well MW -NW changed in 2012 due to a failure in the lower <br />section of well casing as described above. EFCI asserts that MW -NW remained functional for <br />monitoring groundwater and collecting water samples as is stated in the DRMS Inspection Report <br />dated April 17, 2012. No other physical changes in the well's condition were observed during the <br />reporting period until the date of sealing. <br />3.3 Water Rights Impacts <br />During 2014, EFCI reached an agreement with the landowner to replace the Corley Company <br />Well (Permit No. 119459). Although it is not proven, this structure may have been adversely <br />impacted by subsidence as a result of mining operations. A replacement well was <br />successfully completed for the landowner by EFCI on December 15, 2014. <br />Page 6 <br />