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STATE OF COLORADO DIVISION OF MINERALS AND GEOLOGY Department of Natural Resources 1313 Sherman St., Room 215 Denver, Colorado 80203 Phone: (303) 866-3567 FAX: (303) 832-8106 SETTLEMENT AGREEMENT JUSTIFICATION Blue Mountain Energy, Inc. Deserado Mine-Permit No: C-1891-018 Notice of Violation No: CV-2002-015 James B. McArdle, Conference Officer c~~`~ DIVISION OF MINERALS GEOLOGY 0.E CLAMATION MINING•SAFETY Bill Owens Governor Greg E. Walther Executive Director Ronald W. Cattany Atting Division Director The Notice of Violation CV-2002-015 was issued on July 10, 2002 for failure to properly water or otherwise manage refuse disposal area working surface to effectively suppress fugitive dust emissions so as to comply with all applicable state and federal air quality statutes and regulations. On September 24, 2002, an Assessment Conference was held at 1313 Sherman Street, Room 814, Denver, Colorado. In attendance, in addition to the Conference Officer, was Mr. Dan Mathews, Ivlr. Jim Stark and Mrs. Sandra Brown representing the Division and Mr. Scott Wanstedt and Mr. Jeff Dubbert representing Blue Mountain Energy. Dan presented testimony and evidence in the form of photographs outlining the details of the violation. Significant dust was observed on the afternoon of July 9, the date of the inspection, generated by heavy equipment operating on refuse area 5-A. On at least three other occasions significant dust was noticed and the operator was cautioned to provide more frequent watering. The operator was notified of the dust problem during the inspection of July 9 and was issued NOV-CV-2002-015. The operator took immediate action to provide dust suppression watering to eliminate the dust problem. Mr. Scott Wanstedt stated that there has been virtually no precipitation at the mine site during the last two months. At the time of the inspection the temperature was over 100 degrees and very windy. Equipment operators try to vary their path in order to avoid creating powder conditions subject to wind erosion. The current activities are affecting approximately 1/3 of the refuse pile. The operator has tried to concentrate dust suppression watering in areas intensively being worked by heavy equipment. The compactor operator was also responsible for operating the water truck. The company has since modified the watering plan and has designated a separate individual whose sole job is to provide dust suppression watering when required. The photos may show more dust than was actually present. The Proposed Civil Penalty originally determined by the Assessment Officer for NOV CV-2002- 015was: History $0.00 Seriousness $750.00