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3607 County Rd. 65 <br />Rangely, CO 81648 <br />(970)675 -4300 <br />fax (970)675 -4399 <br />DESERADO MINE <br />BLUE MOUNTAIN ENERGY <br />April 10, 2012 <br />Mr. Zach Trujillo <br />Division of Reclamation, Mining and Safety <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />RE: Sediment Pond Inspection Report for 4th Quarter 2011. <br />County Road 65 Subsidence Monitoring Report <br />Blue Mountain Energy, Inc., Deserado Mine (Permit C- 1981 -018). <br />Dear Zach: <br />Enclosed is the Sediment Pond Inspection Report for the 1st quarter 2012 for the <br />Deserado Mine. The only discharge that occurred during the quarter was from the Raw <br />Water Lagoon. All ponds performed as designed. <br />COUNTY ROAD 65 SUBSIDENCE REPORT <br />Longwall mining under County Road 65 last occurred at the very end of the 3rd quarter <br />2010. No subsidence effects were observed in this road during the quarter. Longwall <br />mining did not occur under County Road 65 during this quarter. <br />If you have any questions, please call me at (970)675 -4322. <br />Sincerely, <br />Scott Wanstedt <br />Environmental Engineer <br />enc.: <br />