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STATE OF COLORADO <br />DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />C O L O RA D O <br />D I V I S I O N o f <br />Denver, Colorado 80203 <br />RECLAMATION <br />Phone: (303) 866 -3567 <br />M IN I NIN G <br />N <br />FAX: (303) 832 -8106 <br />SAFETY <br />May 15, 2013 <br />John W. Hickenlooper <br />Governor <br />Scott Wanstedt <br />Blue Mountain Energy <br />Mike King <br />3607 County Rd. 65 <br />Executive Director <br />Rangely, CO 81648 <br />Loretta E. Pineda <br />Director <br />RE: Deserado Mine, Permit C- 1981 -018 <br />2012 Annual Hydrology Reports <br />Dear Mr. Wanstedt <br />The Division has completed its review of the 2012 Annual Hydrology Report (AHR) received on <br />February 1, 2013. The Division finds the 2012 Annual Hydrology Report is in compliance of the <br />following Rules: <br />Rule 4.05.13(4)(a) — The data compiled in the 2012 AHR is kept and maintained at the Deserado Mine <br />office. <br />Rule 4.05.13(4)(b) — The 2012 AHR presents the hydrologic data and analysis resulting from the <br />Deserado Mine for the period of October 1, 2011 through September 30, 2012. <br />Rule 4.05. 13 (4)(1), (ii), (iii) — The 2012 MR identifies the water quality data obtained during the 2012 <br />water year (October 1, through September 30). This includes data from each monitoring site. The AHR <br />included interpretation of the data and related impacts of the hydrologic balance. <br />The following is a review as per the predicted probably hydrologic consequences based on the baseline <br />predictions in the Deserado Mine permit. Predictions appear to be accurate and meet the operator's <br />obligations. <br />1. PHC: The impact of mining on the quantity of water in the White River will be minimal. <br />The water withdrawal rate from the lagoon at the White River during the 2012 reporting year was <br />estimated at 119,281,000 gallons or 366 acre -feet. This compares with an expected withdrawal <br />rate of 552 acre -feet per year at full production. <br />2. PHC: Groundwater inflow into the mine will be very low. <br />Mining in the B -Seam encountered only small flows of water and the mine is essentially dry. <br />Typical inflows are in order of 20 to 40 gpm with occasional short term increases when localized <br />perched water tables are encountered. The inflows include water resulting from leaks, water line <br />brakes, and other similar contributions as well as that originating from inflows from geologic <br />formations. <br />PHC: The construction of surface facilities associated with the mine will result in temporary <br />increase in the suspended solids concentration of the adjacent and receiving stream. <br />Office of Office of <br />Mined Land Reclamation Denver • Grand Junction • Durango Active and Inactive Mines <br />