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DNR <br />CO �% <br />November 28, 2016 <br />Scott Wanstedt <br />COLORADO <br />Division of Reclamation, <br />Mining and Safety <br />7epa� m7-ana •o' Natural Resources <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />Blue Mountain Energy, Inc. <br />3607 County Rd. 65 <br />Rangely, CO 81648 <br />RE: Deserado Mine, Permit No. C-1981-018 <br />3rd Quarter 2016 Sediment Pond Inspection Report and 3rd Quarter 2016 County Road 65 <br />Subsidence Monitoring Report <br />Dear Scott, <br />The Division of Reclamation, Mining and Safety (the Division) has reviewed the Sediment Pond Inspection <br />Report and the County Road 65 Subsidence Monitoring Report for the 3rd Quarter of 2016. The reports <br />were received on October 27, 2016, during an inspection of the Deserado Mine. The Division finds the <br />reports to be in compliance with the following Rules: <br />3rd Quarter 2016 Sediment Pond Inspection Report <br />4.05.9(17) - All Impoundments are inspected quarterly, by a qualified person designated by the operator, <br />for the appearance of structural weakness and other hazardous conditions. The reports are retained with <br />Scott Wanstedt at the Deserado Mine Office, and copies of the reports are submitted to the Division on a <br />quarterly basis. <br />4.05.9(15)(a) - Burrows on the embankments of the Rail Loop Sump (RRS) were listed as filled in. A small <br />vertical We on the top of the embankment of DP -1 had been repaired and was noted in previous 2016 <br />quarterly reports. Seepage was noted at the SDH -3M and SDH -3U ponds, the cause of the seepage is being <br />evaluated. <br />4.05.9(15)(b) - The existing required monitoring procedures were met. <br />4.05.9(15)(c) - The amount of water impounded in the ponds was documented in the report. <br />4.05.9(15)(d) - The existing storage capacity of the impoundments was documented in the report. <br />4.05.9(15)(e) - The 3rd quarter report did not list any other aspects of the structure affecting stability, or <br />requiring maintenance. <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 />