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•GCC <br />July 10, 2012 <br />State of Colorado <br />Department of Natural Resources <br />691 CR 233, Suite A -2 <br />Durango, CO 81301 <br />Attention: Marcia Talvitie <br />Re: King I Mine C- 1981 -035 <br />NOV- 2012 -003 <br />Dear Ms. Talvitie: <br />"Safety as a Value" <br />Telephone: 970.385.4528 <br />Facsimile: 970.385.4638 <br />GCC Energy, LLC <br />6473 County Road 120 <br />Hesperus, CO 81326 <br />On April 11, 2012, a modification notice was issued by CDRMS to extend the time for <br />abatement of NOV CV- 2012 -003 to July 10, 2012. Attached to the application for that <br />extension, GCC Energy proposed an approximate timeline outlining the steps <br />necessary to abate the NOV. As listed in that timeline, the following actions have been <br />taken or are currently in progress. <br />1) Trautner Geotech has performed field work consisting of six boreholes <br />penetrating the coal mine waste (CMW) to test for density, ground water, etc. <br />2) CDS Environmental Services (CDS) collected samples of the surface of the CMW, <br />as well as samples from various depths of each of the bore holes drilled by <br />Trautner Geotech. Water was encountered in Borehole #1. CDS purged the <br />hole of water and rechecked for water on subsequent days. A water sample was <br />sent to a laboratory for analysis. <br />3) CDS has prepared a final report detailing their findings. Please find that report <br />attached to this correspondence. <br />4) Trautner Geotech has completed most of the proposed tests on the material <br />gathered from the boreholes. It has been determined that several areas of the <br />CMW as deposited do not meet 90 Proctor compaction as required by the <br />Division. Trautner expects to have a final report prepared on or about July 20, <br />2012 as proposed in the aforementioned timetable. However, the results of one <br />final analysis which is underway may take up to an additional week to complete. <br />If this turns out to be the case, their final report should be completed by July <br />27, 2012. <br />5) Given the inadequate compaction revealed by the boreholes, plans are underway <br />