2011-02-15_REVISION - C1980004 (2)

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Corey Heaps McClane Canyon Mining, LLC February 15, 2011 Page 3 8. Table 2.1 -3 Surface Drilling Results needs to be updated with all pertinent drillhole information for the McClane Canyon Mine. For example, there are drill holes shown on Figure 2.1 -3 Cameo Seam Outcrop & Drillhole Index Map that are not in Table 2.1 -3. 9. Figure 2.5 -1, Surface Geology needs to be updated with additional required information for the permit expansion area. In accordance with 2.04.6 (3)(a)(ii) please provide a geologic map with geologic cross sections of the proposed permit are, including coal crop lines and the strike and dip of the coal to be mined. The geologic cross sections (Figures 2.5 -2 through 2.5 -6) also need to be revised to include the permit expansion area. The cross sections should be referenced to the geologic map and the cross sections lines need to be shown on the geologic map. Rule 2.04.7 Hydrology Description 10. Please refer to the enclosed comment letter from the Division of Water Resources, Office of the State Engineer (SEO) dated December 10, 2010 (see Attachment 4). The SEO has identified several concerns with the proposed project as summarized below. • If the stream system at this location becomes overappropriated, the storage and use of any surface or ground water would be subject to administration. • If any of the sediment ponds expose groundwater, the pond must be backfilled immediately until a well permit issued pursuant to CRS 37- 90- 137(2), allowing the exposure of groundwater in a pit is obtained from the State Engineer. • The SEO has no records of permits for the existing monitoring wells on site. As stated in the SEO's letter, if these wells were completed without a valid monitoring hole notice or well permit the applicant needs to take immediate action to plug or permit the wells. • Last, the SEO notes that the applicant states that portions of the site may affect current surface water diversions. If at any point the applicant's operations will affect surface diversions they should consult with the local water commissioner to assure no injury to water rights occur. Please address each of these concerns and provide a response and amended application materials, if appropriate. 11. There is no description of water quality for the alluvial wells. In accordance with Rule 2.04.7(1) please add a description of seasonal water quantity and quality for the alluvial groundwater monitoring wells. 12. An additional down gradient monitoring well and a point of compliance well(s) may be required. Well GW-9 was installed as a result of the TR -16 review because the Division required a monitoring point below the disturbance area associated with the refuse pile proposed for TR -16. The new CMWP location proposed with PR -2 will extend fiuther to the southwest beyond the