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W 'W RESOURCE <br />`f HYDROGEOLOGIC <br />SERVICES <br />INTRODUCTION <br />The Annual Hydrology Report is completed at the conclusion of each year to compile and interpret <br />hydrologic data related to GCC Energy's King I and II Mine operations. This satisfies a requirement of <br />the Colorado Department of Reclamation, Mining and Safety (CDRMS) Mining Permit C-1981-035. In <br />2016, Technical Revision 26 (TR -26) to Permit C-1981-035 was approved which included expansion of <br />hydrologic monitoring in number of locations, frequency of observations, laboratory analyses performed <br />and field parameters collected. Additionally, to best support these efforts, GCC Energy (GCC) <br />implemented a quality assurance/quality control (QA/QC) program to: <br />• Conduct GCC compliance staff training on water quality sampling for all GCC monitoring locations, <br />equipment and methodologies, with detailed written procedures for each monitoring location <br />provided <br />• Collect all water quality field data with an industry -standard multi -parameter device with electronic <br />data deliverable (EDD) output for all field and calibration data <br />• Collect all water quality field monitoring data on standardized sampling logs specific to surface <br />water, groundwater and spring/seep sampling locations which are scanned and reviewed by third <br />party (RHS) within one week of sampling <br />• Implement industry -standard, 10% random QA/QC lab sample submittals for duplicate and field <br />blank water quality samples <br />• Begin utilizing EDDs produced by the contract environmental analytical laboratory for all data <br />analyses to replace manual data entry <br />• Compile and manage all water quality data in a geo-referenced Microsoft Access database <br />HYDROLOGIC MONITORING <br />HYDROLOGIC MONITORING LOCATIONS <br />Two new hydrologic monitoring locations were added in 2016 and are provided (with justification) in the <br />list below: <br />• Hay Gulch Ditch Upgradient <br />o Added to supplement Hay Gulch Ditch monitoring with a location sufficiently upstream of both <br />King II and King I operations <br />• Seep -1 <br />o Added during the one-year (four quarter) King II spring and seep survey project as it is the only <br />spring/seep that was located during the survey <br />The following hydrologic monitoring locations were continued in 2016: <br />• Hay Gulch Ditch (now referred to as Hay Gulch Ditch Downgradient) <br />• Wiltse Well <br />• Well #1 Upgradient <br />• Well #2 Downgradient <br />Figure 1 shows the 2016 hydrologic monitoring locations and their relation to the King I and II Mines. <br />GCC ENERGY, LLC <br />2016 ANNUAL HYDROLOGY REPORT <br />3 <br />