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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 />January 17, 2019 <br />Jason Tuttle <br />Blue Mountain Energy, Inc. <br />3607 County Rd. 65 <br />Rangely, CO 81648 <br />RE: Deserado Mine, Permit No. C-1981-018 <br />41h Quarter 2018 Sediment Pond Inspection Report and 41h Quarter 2018 <br />County Road 65 Subsidence Monitoring Report <br />Dear Jason, <br />The Division of Reclamation, Mining and Safety (the Division) has reviewed the <br />Sediment Pond Inspection Report and the County Road 65 Subsidence Monitoring <br />Report for the 4th Quarter of 2018. The reports were received on January 16, 2019. The <br />Division finds the reports to be in compliance with the following Rules: <br />3rd Quarter 2018 Sediment Pond Inspection Re ort <br />4.05.9(17) — All Impoundments are inspected quarterly, by a qualified person designated <br />by the operator, for the appearance of structural weakness and other hazardous <br />conditions. The reports are retained at the Deserado Mine Office, and copies of the <br />reports are submitted to the Division on a quarterly basis. <br />4.05.9(15)(a) — Burrows on the embankments of the RP -2/3 Pond and the RP -5 Pond <br />were filled in. The discharge channel from the SDH -3M pond to the SDH -3L pond has <br />been eroded. The water being pumped into the SDH -3L pond is directly from a pipe and <br />the channel from SDH -3M is no longer used. The SDH -3L pond on its own is sufficient <br />to treat the water. The spillway of the Last Chance Pond had maintenance preformed on <br />it during the 4th quarter. <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 <br />report. <br />4.05.9(15)(d) — The existing storage capacity of the impoundments was documented in <br />the report. <br />4.05.9(15)(e) — The 4th quarter report did not list any other aspects of the structure <br />affecting stability, or requiring maintenance. <br />1313 Sherman Street, Room 215, Denver, CO 80203 P 303.866.3567 F 303.832.8106 httos://mininst.state.co.us <br />Jared 5. Polis, Governor I Dan Gibbs, Executive Director l Virginia Brannon, Director <br />