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COLORADO <br />Division of Reclamation, <br />Mining and Safety <br />Department of Natural Resources <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />August 24, 2016 <br />Scott Wanstedt <br />Blue Mountain Energy, Inc. <br />3607 County Rd. 65 <br />Rangely, CO 81648 <br />RE: Deserado Mine, Permit C-1981-018 <br />2016 2nd Quarter Discharge Monitoring Report <br />Dear Scott, <br />The Colorado Division of Reclamation, Mining and Safety (the Division) has finished its review of the 2016 <br />2nd Quarter Discharge Monitoring Report (DMR). The report was received on August 2, 2016. The Division <br />finds the report to be in compliance with the following Rules: <br />Rule 4.05.13(2)(i) - Samples are measured accurately and record the quality and quantity of the <br />water discharged from the permit area. <br />Rule 4.05.13(2)(ii) - Discharges occurred from SDH -3/5 (Outfall 026-A/026-W/MN-26), the <br />Facilities Area Pond DP -1 (Outfall 001 /MN -01) and the Sewage Treatment Plant (Outfall 045-A) <br />during the 2nd quarter of 2016. The samples collected from 001-A and 045-A were below the <br />maximum allowable values or within acceptable value ranges. SDH -3/5 exceeded the acute <br />WET standards during the 2nd quarter of 2016. The Division received copy of the official 120 <br />day final report for the WET PTI/TIE testing. Information in the update stated the last test was <br />concluded on March 7, 2016. The tests continued to exhibit toxicity to Daphnia magna and <br />Fathead minnow. The tests concluded that the source of the toxicity is most likely due to <br />elevated concentrations of chloride. Beginning on February 11, 2016, WET tests were conducted <br />using a mixture of 1:1 effluent to White River water. The tests showed that the LD50 for <br />Daphnia magna was at 61% effluent. Another test conducted with Fathead minnow at a 1:1 ratio <br />resulted in a 100% survival rate. The Deserado Mine will continue to follow Part I.A.2.d of the <br />CO -0038024 NPDES Permit to address these exceedances. 2nd Quarter testing continues to yield <br />results that are toxic in 100% effluent. Please keep the Division informed of any decisions <br />made by or discussions with CDPHE about the exceedances at SDH -3/5. <br />1313 Sherman Street, Room 215, Denver, CO 80203 P 303.866.3567 F 303.832.8106 http://mining.state.co.us <br />John W. Hickenlooper, Governor I Robert W. Randall, Executive Director I Virginia Brannon, Director <br />