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SETTLEMENT AGREEMENT JUSTIFICATION <br />Energy Fuels Coal, Inc. <br />Southfield Mine; C- 1981 -014 <br />Notice of Violation No. CV- 2013 -002 <br />Tom Kaldenbach, Conference Officer <br />Notice of Violation Number CV- 2013 -002 was issued on January 29, 2013 and resulted <br />from failure to ensure that water monitoring well MW -NW continues to function as <br />designed. There were two abatement steps to be completed by April 1, 2013. Abatement <br />step No. 1 was to remove the obstruction from MW -NW or establish a replacement water <br />monitoring well that intercepts the Southfield Mine workings in the Red Arrow or Jack <br />O'Lantern Coal seam. Step No. 2 was to provide evidence to the Division that Energy <br />Fuels Coal Inc. has applied for a monitoring well permit with CDWR in accordance with <br />Rule 2.03.10. <br />On April 11, 2013, an Assessment Conference was held at the Division of Reclamation, <br />Mining and Safety offices located at 1313 Sherman St., Room 215 Denver, Colorado. In <br />attendance were, in addition to the Conference Officer, Ms. Janet Binns and Mr. Dan <br />Hernandez representing the Division of Reclamation, Mining and Safety. Mr. George <br />Patterson (by phone) and Mr. Rich Munson represented Energy Fuels Coal, Inc. <br />Ms. Binns provided background information and detailed the nature of the violation. <br />Mr. Munson and Mr. Patterson described how the MW -NW well had become obstructed, <br />the efforts to remove the obstruction, and the purpose of the well in the monitoring plan. <br />The proposed civil penalty originally determined by the Assessment Officer for CV- <br />2013 -002 was: <br />History $0.00 <br />Seriousness $500.00 <br />Fault $500.00 <br />Number of Days of Penalty Assessed Unstated, but equates to 1 day <br />Good Faith $0 <br />Total proposed penalty $1,000.00 <br />After hearing the testimony and considering the evidence presented, I have come to the <br />following conclusions: <br />History <br />A $0.00 penalty is appropriate for history. <br />Seriousness <br />I believe that a violation did occur and under the seriousness category the level of <br />low /moderate was appropriate. Although it is likely no actual environmental damage <br />