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Peabody Sage Creek Mining, LLC October 17, 2016 Jared Ebert Colorado Division of Reclamation, Mining, & Safety 1313 Sherman St., Room 215 Denver, CO 80203 RE: Peabody Sage Creek Mining, LLC. DRMS Permit No. C-2009-087 Technical Revision No. 9 (TR9), Adequacy Review No. 1 PSCM Response Dear Mr. Ebert: PSCM has reviewed your Adequacy Review dated August 22, 2016. PSCM has addressed the items of interest in this letter. Please review the following information addressing these items: Item 1. The Probable Hydrologic Consequences (PHC) discussion of the PSCM permit application is predicated upon active underground mining. Underground mining was suspended in the fall of 2012. Only 65,000 tons (0.059 %) were mined out of a total permitted reserve of 110,000,000 tons. Mining is not expected to be resumed for approximately eight years, maybe longer. As stated on page 2.05-98 (Vol. 1A) of the PHC: "As mining proceeds, ground water inflows will result in a temporary localized reduction in the potentiometric surface in the adjoining bedrock units. While a localized cone of depression will develop during mining operations, the mine workings will fill with water after operations cease and water levels in the mined area will reach equilibrium with those in the surrounding units. " Due to the time frame since mining was suspended, and the relatively small amount of coal that has been removed, such water level equilibrium has likely occurred. This is demonstrated on the water level hydrographs for two of the bedrock wells proposed to be retained for monitoring, as discussed in the next item, which indicate very little change. Furthermore, on page 2.04-103 (Vol. 1), a discussion of a groundwater point of compliance is presented. There it states: "The proposed point of compliance (POC) is well SGAL70, completed in the Grassy Creek alluvium approximately 1000 feet downstream of the permit boundary. This well has been monitored for water levels and water quality since 1988 and provides a long period of historical record against which to compare newly -acquired data. This well was approved by the CDRMS as a POC well for the Seneca II mine in March 2009 under TR -47. In TR -47, bedrock POC wells were not deemed necessary due to low hydraulic conductivities and well yields, and because attenuation and dilution should assist in limiting water quality impacts on bedrock units from mining activities to close downgradient proximities. Since the same bedrock units that were determined in TR -47 by CDRMS to not require POC's will be affected by mining activities at the PSCM, SCCC does not propose to establish POC's for these units. " Bedrock well hydraulic conductivities are presented on Table 2.04.7-2 (page 2.04-48, Vol. 1) of the permit application. The water level and quality monitoring frequencies at the POC Well SGAL70 will not be changed in this technical revision. Due to the length of time since mining stopped, the length of time when mining is likely to be Peabothr Sea.., G oek .Hine 29515 Routt County Road 27 1 Oak Creek, CO 80467 1 970-870-2700