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DESERADO MINE <br />BLUE MOUNTAIN ENERGY <br />3607 County Road 65 <br />Rangely, CO 81648 <br />(970)675 -4300 <br />fax(970)675 -4399 <br />May 31, 2013 <br />Mr. Zach Trujillo <br />Division of Reclamation, Mining and Safety <br />1313 Sherman Street, Room 215 <br />Denver, CO 80203 <br />RE: Permit Revision #8 — Permit Area Expansion <br />Deserado Mine — Permit No. C- 1981 -018 <br />Dear Zach: <br />RECEIVED <br />JUN 0 3 2013 <br />DMSION OF RECL4Wnpl l <br />MININGAND &AFETy <br />The following provides additional information and comments addressing issues identified in your May <br />7, 2013 letter regarding Permit Revision 8. <br />1. As noted, BME will forward you a copy of the Federal Coal Lease COC -74813 once awarded. <br />Our bid was accepted as the high bid. We expect to have a finalized lease by mid June. <br />2. Map 147 does not provide the "official" mine permit boundary. To prevent confusion should <br />several versions of the boundary occur within BME's permit Map 147 references Map 1 for the current <br />permit boundary. We intend to update Map 147 next month as part of a Minor Revision to add <br />additional nitrogen injection and degas boreholes. The updated mine permit boundary and mine plan <br />will be included at this time. As before, a note referring to Map 1 for the official permit boundary will <br />be included. <br />3. As defined by Rule 1.04(110) Renewable Resource Lands include areas for the recharge of <br />aquifers, areas for agricultural or silvicultural production of food and fiber, and pastureland. There are <br />no identified aquifers within the area or any from outside the area that recharge from the expansion <br />area. The only agricultural use is for sheep grazing. The expansion area sees winter and spring sheep <br />use from the same sheep allotments as for the existing mine area. Subsidence from the Deserado Mine <br />will not adversely impact this use. Provisions addressing such impacts, if they were to occur, are <br />found in Section III.A.71. <br />4. We expect minimal impacts from subsidence at the refuse areas due to the depth of overburden. <br />Refuse Area 5A would receive the greatest impacts and should still be active at the time of subsidence. <br />A monitoring and maintenance commitment has been added to Section III.A.71 addressing potential <br />subsidence impacts. These refuse areas already receive frequent inspection, maintenance, and <br />reporting to address these types of issues. <br />5. Damage from subsidence to Red Wash Reservoir #2 is not expected to be extensive. This <br />reservoir has remained essentially dry with minor amounts of water present only during spring runoff <br />and after exceptional runoff events. As mining gets deeper the resulting impact from subsidence <br />