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Bowie Resources, LLC April 15, 2011 <br />Bowie No. 2 Mine <br />2010 Annual Hydrology Report <br />inspected quarterly for field parameters with full suite laboratory parameters required on <br />springs with flows greater than five (5) gallons per minute. During the construction <br />phase of the mine, four (4) springs (S-6, S-7, S-9 and S-15) were eliminated by road <br />and portal bench construction activities. The 2010 field and laboratory analysis is <br />consistent with baseline data provided in the permit application. There has been a <br />trend in many of the springs that shows the conductivity increases as the flow <br />decreases. This trend is most likely caused by the increased time the water is in <br />contact with the alluvium because of the lower flows. <br />Surface Water Monitoring Stations: STREAMS AND DITCHES <br />Thirty seven surface water monitoring stations including the North Fork of the <br />Gunnison, Terror Creek, Hubbard Creek, Freeman Gulch, the Deer Trail Ditch, <br />Stephens Draw, the Fire Mountain Canal and Gulches A through D are monitored <br />quarterly for field parameters and semi-annually for full suite analysis. The results of <br />the 2010 field and laboratory studies are consistent with baseline information supplied <br />in the permit application. <br />The USGS, with right of way permission from the USDA-Forest Service, has installed <br />continuous monitoring stations on both Hubbard and Terror Creeks. Similar stations <br />are installed near each creek's confluence with the North Fork of the Gunnison River. <br />These stations have been calibrated by the USGS's hydrology department and now <br />provide accurate readings for the Annual Hydrology Reports. <br />Surface Water Monitoring Stations: SMALL AREA EXEMPTIONS <br />The locations of the small area exemptions are presented on Map 20. The Applicant <br />will monitor the flow from the small area exemptions to assure compliance with <br />4.05.2(3). The Applicant will use its best efforts to obtain samples. The samples will be <br />analyzed for pH, conductivity and total settleable solids. Samples will be in compliance <br />if they contain settleable solid levels of 0.5 ml/I or less and the pH is greater than 6.5 <br />and less than 9.0. No small area exemption sampling was performed during the year. <br />Coal Member of Mesaverde <br />Fourteen drill holes were monitored during the 2010 sampling season. These holes <br />were monitored quarterly for field parameters and semi-annually for full suite laboratory <br />analysis. Data collected and evaluated is consistent with the baseline information <br />provided in the permit application. The mine construction work during 1997 required <br />the elimination of four monitored drill holes. These holes are DH 42, DH 52, DH 54 and <br />DH 55 and were located near the mine portals. Drill Holes DH-13 and DH-34b were <br />eliminated by mining. Drill hole DH-34c was damaged by ground movement. DH-16 is <br />blocked at 60-feet so no monitoring can be performed. Drill Holes DH-57, 57a and <br />DH-58, 58a were added in conjunction with the Terror Creek Coal Exploration Plan, <br />5