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STATE OF COLORADO <br />DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3567 <br />FAX: (303) 832-8106 <br />November 2, 2010 <br />Mr. Scott Wanstedt <br />Environmental Engineer <br />Blue Mountain Energy, Inc. <br />3607 CR 65 <br />Rangely, CO 81648 <br />RE: Deserado Mine, C1981-018, Third Quarter 2010 Subsidence Monitoring Report <br />Dear Mr. Wanstedt: <br />COLORADO <br />D IV IS I ON OF <br />RECLAMATION <br />MINING <br />SAFETY <br />Blue Mountain Energy's (BME) submitted a Third Quarter 2010 Subsidence Monitoring Report for the <br />Deserado Mine, on November 1, 2010. Longwall panel 11 undermined Rio Blanco County Road No. 65 and <br />the end of the third quarter. BME reported that only very superficial cracking was observed in the road <br />surface. No damage to the road or any other structures were observed. The Division's inspection conducted <br />on October 21, 2010, confirmed this minor cracking observed in the road surface. No corrective actions were <br />necessary. <br />This report fulfill the permit commitment in section III.A.7.h. Thank you for your prompt submittal of the <br />report. <br />Sincerely, <br />Protection Specialist II <br />C:/jhb/C81018/Reports/subsidence/3rd Q 2010.doc <br />Office of Office of <br />Minprl 1 and RPrlamarinn Denver • Grand function • Duraneo Active and Inactive Mines