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May 11, 2016 <br />Mr. Luke Danielson <br />Law Offices of Luke Danielson, PC <br />219 N. Iowa St. <br />Gunnison, CO 81230 <br />Re: Permit C-1981-035, Water and Waste Issues Related to GCC Energy's King Mine Project. <br />Dear Mr. Danielson, <br />I am providing this letter at your request to summarize my current concerns with respect to GCC Energy, <br />Inc's (GCC) King I and King 11 Mine's coal mine waste disposal practices. GCC waste disposal practices are <br />the subject of the long-running Technical Revision 20, which was initiated by a waste disposal practice <br />violation issued by the Division of Reclamation, Mining and Safety on April 5, 2012 (CV2012003). <br />GCC is currently stockpiling mining waste rock from the King 11 Mine in a repository near the King I Mine <br />portal. The waste rock is exposed to the effects of natural precipitation and weathering which raises <br />concerns about the possible leaching of metals, cations, and anions into surface waters or alluvial <br />groundwater in the form of acid mine drainage, neutral mine drainage or saline drainage. The <br />placement, compaction, and characterization of the waste rock and its leaching potential are the subject <br />of Technical Revision No. 20, which is still in the process of being resolved more than four years after its <br />filing was required by the Colorado State Division of Reclamation, Mining and Safety (DRMS). <br />In the course of my investigation, I have reviewed the following documents: <br />• GCC!s recent hydrology report entitled King I crud King// Cool Mine Area Hydrologic Study, which <br />was prepared by Resource Hydrology Services, Inc. (RHS) dated January 31, 2016 (RHS, 2016); <br />• The February 8, 2016 article from the Durango Herald newspaper reporting on GCC Energy's <br />Toxics Release inventory (TRI) and my own search of the Toxic Release Inventory website to <br />confirm this article; <br />• GCC Technical Revision 20 (TR20) file in its entirety. TR20 is a technical revision to Colorado <br />State DRMS Coal Mine Permit C-1981-035; <br />• Sections of Permit C-1981-035 regarding coal mine waste characterization, handling, disposal <br />and monitoring. <br />Letter dated December 19, 2015 from R. Fischer, P.E. to Cynthia Roebuck, Southwest Colorado <br />Advocates, Inc. regarding Water Issues Related to GCC Energy's King 11 Mine Project. <br />• Coal Violation File CV2012003 (Violation issued to GCC by the ORMS); <br />Chapter 4 —Defining the Problem —Chorocterization and Chapter 5 -Prediction from <br />Internotional NetworkJor Acid Prevention, Revised, May, 2016 Global Acid -Rock -Drainage Guide <br />