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ATCOLORADO <br />Division of Reclamation, <br />Mining and Safety <br />Department of Natural Resources <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />November 20, 2018 <br />Scott Wanstedt <br />Blue Mountain Energy, Inc. <br />3607 County Rd. 65 <br />Rangely, CO 81648 <br />RE: Deserado Mine, Permit No. C-1981-018 <br />2017 Annual Hydrology Report <br />Dear Mr. Wanstedt, <br />The Division received the 2017 Annual Hydrology Report (AHR) on January 31, 2018. <br />Thank you for your timely submittal. The Division finds the 2017 AHR is in compliance <br />with the following Rules: <br />Rule 4.05.13(4)(a) - The data collected for the 2017 AHR is kept and maintained at the <br />Deserado Mine Office. <br />Rule 4.05.13(4)(b) - The 2017 AHR is compiled from the analysis of hydrologic data <br />collected from the monitoring period of October 1, 2016 to September 30, 2017. <br />Rule 4.05.13(c)(i), (ii), (iii) - The 2017 AHR was submitted to the Division by the <br />determined date on which the permittee and the Division agreed to. The report included <br />an interpretation of the collected data and identified mining related impacts to the <br />hydrologic balance. <br />The 2017 data supports the predictions of the Probable Hydrologic Consequences (PHC) <br />of the Deserado Mine permit. The following is a review of the 2017 data as per the PHC: <br />The impact on the quantity of water to the White River was minimal, only <br />98,013,894 gallons or 301 acre-feet was withdrawn from the White River in the <br />2017 water year. This is less than the projected 552 acre-feet per year. <br />Groundwater inflow is usually 20 to 40 gallons per minute (gpm), occasional <br />increased inflows occur when a localized perched water table is encountered. <br />Other inflows to the mine are the result of water from leaks and water line brakes. <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 />