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information received from the Office of Surface Mining Applicant Violator System, <br />operations owned or controlled by Blue Mountain Energy Inc. do not own or control any <br />operations which are currently in violation of any law, rule, or regulation of the United <br />States, or any State law, rule, or regulation, or any provision of the Surface Mining Control <br />and Reclamation Act or the Colorado Surface Coal Mining Reclamation Act. <br />(2.07.6(2)(g)(i)). The Division completed AVS compliance checks on 28 March 2011 and <br />29 June 2011 and both checks reported no violations with a recommendation of "Issue ". <br />8. Blue Mountain Energy Inc. does not control and has not controlled mining operations with a <br />demonstrated pattern of willful violations of the Act of such nature, duration, and with such <br />resulting irreparable damage to the environment as to indicate intent not to comply with the <br />provisions of the Act. (2.07.6(2)(h)). <br />9. The Division finds that surface coal mining and reclamation operations to be performed <br />under this permit will not be inconsistent with other such operations anticipated to be <br />performed in areas adjacent to the permit area. (2.07.6(2)(i)). <br />10. At the time of issuance of this proposed decision for PR -07, the Division holds a reclamation <br />performance bond for the Deserado Mine in the amount of $5,686,294.00, in the form of <br />Corporate Surety Bond issued by Travelers Casualty and Surety Company. <br />During the RN -05 review, the Division examined the bond document and updated the <br />estimated cost of reclamation for the worst -case disturbance that will occur during the 2009- <br />2014 permit term. Since no additional surface disturbance was proposed with PR -07, the <br />Division did not reevaluate the reclamation cost estimate. The Division's estimate does not <br />reflect any bond release for reclamation work completed by the operator (2.07.6(2)(k)). The <br />cost estimate with supporting documentation is set forth in the Division's "Permit Renewal <br />05 Cost Update" for the Deserado Mine, dated February, 6 2009. <br />11. The Division has made a negative determination for the presence of prime farmland within <br />the permit area. The decision was based on a pre- application investigation of the soils found <br />within the proposed permit area. Pursuant to 2.04.12(2) criteria, the applicant has provided <br />information which demonstrates that lands within the permit area, which could be used as <br />cropland, are not irrigated or naturally sub - irrigated, have no dependable water supply of <br />adequate quality, and receive less than 14 inches of annual precipitation. Therefore, the <br />Division hereby renders a negative determination for the presence of prime farmland within <br />the permit area. (2.07.6(2)(k)). <br />12. Based on information provided in the application, the Division has determined that an <br />alluvial valley floor (AVF) exists within the permit or adjacent area. The alluvial valley <br />floor is adjacent to the White River. A surface water lagoon and associated access roads and <br />water line facilities have been constructed on an undeveloped portion of the alluvial valley <br />floor that is not significant to farming, near the confluence of Scullion Gulch and the White <br />River. Alluvial water level and quality is monitored in this vicinity. Kenney Reservoir, <br />which is to the southwest of the mine site and beyond the permit area, has inundated a <br />significant portion of the AVF within the permit area. The Division finds that the proposed <br />surface coal mining operation will not affect the AVF. <br />Permit Revision 07 <br />Deserado Mine <br />C- 1981 -018 26 29 June 2011 <br />