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2010 ANNUAL HYDROLOGY REPORTS <br />McClane Canyon Mine Permit No. C-1980-004 <br />Munger Canyon Mine Permit No. C-1981-020 <br />This report on the mine inflows, discharges and probable hydrologic <br />consequences is submitted in compliance with the stipulations of the Mining and <br />Reclamation permits for the mines noted above. The stipulations require a report <br />for each permit. Since the mines are in close proximity, the effects are combined. <br />The McClane Canyon mine was in operation during the year and Munger <br />Canyon Mine has been reclaimed. <br />This report shall first discuss the effect of McClane Canyon Mine (MCM) on the <br />hydrologic regime, next discuss the effect of Munger Canyon Mine, and then give <br />an overview of the surface water system and groundwater monitoring. This report <br />shall conclude with a discussion of the cumulative effect of both mines on the <br />hydrology of East Salt Creek. <br />McClane Canyon Mine <br />Mine History and Production: <br />The McClane Canyon Mine began production in 1977. The mine ceased <br />production later that year when a fault was encountered. The mine remained idle <br />until 1980. From 1977 through 1982 the mine produced a total of 184,365 tons of <br />coal. In 1983 the mine was idled and remained under Division approved <br />temporary cessation until November 1988. In December of 1988, 3,995 tons of <br />coal was mined. In 1989; 125,200 tons of coal was produced. Production during <br />1990 totaled 208,945 tons. Production for 1991 totaled 194,000 tons of coal. <br />1992 Production was 7,914 tons. No coal was produced between 1993 and <br />1996. In 1997 production of 49,115 tons was accomplished. The mine was idle <br />during 1998 and 1999. Production began again in February 2000 and has been <br />continuous through December 9, 2010. Production during 2010 was 199,650 <br />tons for the calendar year and 235,870 for the water year. <br />Production from the mine during the year involved finishing the retreat of the 6th <br />south panel and mining the 7th south panel. On December 9th, 2010 the mine <br />was idled, and no production is scheduled for calendar year 2011. In fact, CAM- <br />Colorado, LLC has submitted an application to the state BLM office for a lease <br />suspension. <br />McClane Canyon has been mining and shipping coal via trucks to the Cameo <br />Power Plant since February 2000. The Cameo Power Plant is MCM's only <br />customer. Excel Energy shut down the Cameo Power Plant at the end of 2010. <br />Truck shipments to the Cameo Power Plant have ceased. There are no coal <br />customers in the surrounding area that could be serviced by truck haulage. <br />Therefore, CAM is taking aggressive actions to get the McClane Canyon Mine <br />back into operation. It has purchased land for a unit train loadout and submitted <br />a permit application to the Division of Reclamation, Mining and Safety (DRMS)