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Memo to Mike King 2 July 22, 2010 <br />Updated Brief on Prospecting Notice Modifications Prospecting Notice P-2008-043 <br />abandonment of the wells. In the vast majority of pump tests, the produced water is discharged to the surface of <br />the land and/or to waters of the state. Therefore, MD-04 is conventional aquifer pump testing procedure in <br />comparison to the proposals under MD-02 (forced infiltration with evaporation) and MD-03 (underground <br />injection). This is reflected in the State Engineer's Water Well Construction Rules at Rule 14.4, which states, in <br />part: <br />Aquifer testing and/or test pumping of any monitoring and observation hole/well shall not exceed a <br />cumulative total of two hundred (200) hours unless prior written approval for additional testing is <br />obtained from the State Engineer. The well owner or his agent shall be responsible for obtaining permits <br />and complying with all rules and regulations pertaining to the discharge of all fluids produced during the <br />testing. <br />Powertech has obtained a permit COG 603162 from the Water Quality Control Division (WQCD) under the <br />Colorado Discharge Permit System for discharge to Spring Creek. This permit was issued May 19, 2010 and was <br />modified July 19, 2010 to include an effluent limitation for radium. Questions about the WQCD permit can be <br />directed to Steve Gunderson at 303-692-3509 for policy level discussion and to Maura McGovern at 303-692- <br />3392 for technical permitting discussion. <br />Both DRMS and the State Engineer have regulatory authority over pump testing when it is being done under <br />Notices of Intent to Conduct Prospecting or under Mined Land Reclamation Permits. DRMS does not impose <br />well construction or plugging and abandonment requirements for pump test wells any different than what is <br />required by the State Engineer, but does require reclamation and bonding for the drill sites and bonding for well <br />plugging and abandonment. DRMS currently holds $122,400.00 reclamation bond for drilling operations <br />authorized under prospecting notice P-2008-043. As an implementing agency for the ground water standards and <br />classifications of the Water Quality Control Commission, DRMS also requires ground water protection measures <br />if water produced by pump testing will be discharged to ground water, as would be the case under MD-02 and <br />MD-03. As discussed previously, under MD-04 the produced water will be discharged to a surface stream; that <br />discharge is under the regulatory authority of the Water Quality Control Division. <br />DRMS issued authorization to proceed under MD-04 on July 6, 2010. Powertech has not yet commenced <br />activities under MD-04, and DRMS imposed a condition on the authorization for five working days advance <br />notice to DRMS to facilitate the inspection of the MD-04 activities. Such notice has not been provided as of this <br />date. MD-04, for which Powertech has DRMS authorization to proceed, and MD-03, for which DRMS <br />authorization has not yet been granted are separate and distinct alternatives for disposal of water produced by <br />pump testing. Powertech has not withdrawn MD-03, and in discussions with DRMS has stated that they want to <br />maintain both options at this time. <br />enclosure(s) <br />cc: Loretta Pineda, DRMS, via email and w/ enclosures <br />David Berry, DRMS, via email and w/ enclosures <br />Bob Randall, DNR, via email and w/ enclosures <br />Steve Gunderson, WQCD, via email and w/o enclosures <br />Maura McGovern, WQCD, via email and w/o enclosures <br />cAacs files\My Documents 4-19-06 thru\centennial project P2008043 status memo 7-22-2010.docx