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FC*XOD�' <br />November 23, 2016 <br />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 />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 3rd 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 />31d Quarter Discharge Monitoring Report (DMR). The report was received on October 27, 2016, during an <br />inspection of the Deserado Mine. The Division finds the report to be in compliance with the following <br />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) and the <br />Sewage Treatment Plant (Outfall 045-A) during the 3rd quarter of 2016. The samples collected <br />from 045-A were below the maximum allowable values or within acceptable value ranges. SDH - <br />3/5 exceeded the acute WET standards during the 3rd quarter of 2016. The Division received <br />copy of the official 120 day final report for the WET PTI/TIE testing. Information in the update <br />stated the last test was concluded on March 7, 2016. The tests concluded that the source of the <br />toxicity is most likely due to elevated concentrations of chloride. The Deserado Mine will <br />continue to follow Part I.A.2.d of the CO -0038024 NPDES Permit to address these exceedances. <br />3rd Quarter testing continues to yield results that are toxic in 100% effluent. Please keep the <br />Division informed of any decisions made by or discussions with CDPHE about the exceedances <br />at SDH -3/5. <br />- Rule 4.05.13(2)(iii) - Discharge Monitoring Reports are received on a quarterly basis and filed <br />with the Division within 90 days of the sample collection. <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 />