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TRE Environmental Strategies, LLC <br />100 Racquette D !ve, Unit t= Fort Coli, s, Colo;aju ROKA; <br />T 970 416 0916 F 97C 49Q 2',,63 <br />May 20, 2016 <br />Scott Wanstedt <br />Blue Mountain Energy, Inc. <br />Deserado Mine <br />3607 CR 65 <br />Rangely, Colorado 81648 <br />Subject: Results of Preliminary Toxicity Investigation (PTI) <br />Dear Scott: <br />This document is a preliminary toxicity investigation (PTI) which reviews existing data to explore the <br />cause of recent whole effluent toxicity (WET) observed with effluent from Blue Mountain Energy. <br />BACKGROUND <br />Acute whole effluent toxicity (WET) tests conducted for the Blue Mountain Energy by TRE <br />Environmental Strategies, LLC (TRE) from the very end of third quarter 2015 through first quarter <br />2016 have indicated toxicity to Daphnia magna and Pimephales promelas. The general water quality <br />characteristics of the effluent suggest the possibility that the toxicity may be due to the ionic <br />composition of the effluent, high total dissolved solids (TDS) and chloride in particular. Table 1 <br />summarizes WET test results and select chemistry data for Blue Mountain Energy effluent tested at <br />TRE between September 2015 and March 2016. <br />Table 1. Summary of WET Results and Select Chemical Parameters <br />Study <br /># <br />Test <br />Start <br />Date <br />Species <br />% Survival at <br />Test Termination <br />48 ar 96 h <br />60% 100% <br />Eff. Eff. <br />Ending <br />LC60 <br />(% Eff) <br />Pass (P) <br />or Fail <br />(F) <br />Effluent Characteristics <br />_ <br />Hard. <br />m /L °(mg/L <br />Alk. Cond. <br />a (PS/cm) <br />Cl' <br />-(Mg/Il) <br />09/30/15 <br />N/A 0 <br /><100 <br />F <br />340 <br />1,440 <br />17,150 <br />NM <br />012° <br />Pm N/A 25 <100 F <br />013 <br />10/27/15 <br />Dm <br />N/A 0 <br /><100 <br />F <br />300 <br />1,370 <br />15,580 <br />NM <br />014 <br />11/11/15 <br />Dm <br />N/A 0 <br /><100 <br />F <br />326 <br />1,420 <br />15,580 <br />5,770° <br />015 <br />12(16!15 <br />Dm <br />N/A 0 <br /><100 <br />F <br />290 <br />1,490 <br />15,290 <br />16,290 <br />4,360c <br />016 <br />P N/A 5 <100 F <br />017 <br />02/11/16 <br />Dm <br />70 0 <br />60.95 <br />F <br />332 <br />1,450 <br />15,490 <br />NM <br />018 <br />03/03/16 <br />PP <br />100 0 <br />70.71 <br />F <br />388 <br />1,500 <br />15,440 <br />4,700 <br />019 <br />4/20/16 <br />Dm <br />100 0 <br />70.71 <br />F <br />296 <br />1,460 <br />14,970 <br />5,600 <br />02Q <br />P 100 10 73.49 F <br />a Total hardness and total alkalinity expressed as mg/L as uaUU3 <br />b Test was not for compliance <br />° The sample analyzed for chloride was collected the day before the WET sample was collected; analyzed by MidContinent, <br />automated ferricyanide method 4504 -CI E. <br />d Chloride measured by ALS (Ft. Collins) on same sample used in WET testing, using ion chromatography (EPA 300.0) <br />Note: In the species column, Dm is Daphnia magna and Pp is Pimephales promelas. NM = not measured <br />