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SURFACE WATER MONITORING There are eight (8) surtace monitoring points within Bear Coal's permitted area. Pond 004, Outfall 001, Upstream North Fork (U/S NFG), Downstream North Fork (D/S NFG), Spring G26A, G-26B, G-26C and CR- 12. Location of Pond 004 and NFG's can be found on map "Figure 11"located in Appendix A and spring locations on map "Geology/Hydrology" also located in Appendix A. The French Drains were not monitored during the year because they were removed during the 1997 reclamation project. The results of groundwater data collected during 2004 and pertinent water quality parameters are found below. North Fork of the Gunnison River The North Fork of the Gunnison River (USGS Station 09132500) is to be monitored during June and December for field parameters and laboratory analysis for conductivity, total dissolved solids, total suspended solids, iron and Manganese. Actual stream flows are obtained from the web (http://nwis-colo.cr.usgs.gov) or by contacting the Department of Water Resources, Colorado River Talk at 303-831-7135. Results of the monitoring follows: Field Analysis 8/24/2004 Field Analysis 12/13/04 U/S NFG D/S NFG U(S NFG D/S NFG pH - su 8.9 8.8 pH - su 8.6 8.5 Temp °C 19.4 20.0 Temp °C 0.2 0.3 Cond umhos/cm 190 210 Cond umhos/cm 170 200 Flow -cfs 243 Flow -cfs 77 on 12/28/04 Laboratory Analysis 8/26/2004 Laboratory Analysis 12/15/2004 Cond umhos/cm Cond umhos/cm 186 218 TSS - mg/I TSS - mg/I 0 0 TDS - mg/I 140 150 TDS - mg/I 130 150 Iron - mg/I 0.43 0.43 Iron - mg/I 0.19 0.20 Manganese mg/I 0.023 0.024 Manganese mg/I 0.006 0.011 Iron and Manganese are both analyzed for total recoverable. In reviewing field as well as laboratory analysis, the Bear No. 3 Mine had no significant deleterious effect on the North Fork of the Gunnison River during the 2004 reporting period. -3-