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DESERADO MINE <br />BLUE MOUNTAIN ENERGY <br />3607 County Rd. 65 <br />Rangely, CO 81648 <br />(970)675-4300 <br />fax (970)675-4399 <br />April 28, 2016 <br />Water Quality Protection Section — Industrial Compliance Program <br />Water Quality Control Division <br />Colorado Department of Public Health and Environment <br />WQCD-WQP-B2 <br />4300 Cherry Creek Drive South <br />Denver, CO 80246-1530 <br />RE: Blue Mountain Energy, Inc. — Permit No. CO -0038024 <br />Notification of WET testing failure (Daphnia magna and Fathead minnow) <br />Outfall #026 (2nd Quarter) <br />Dear Sir/Madam: <br />This letter serves as official notification that the required WET testing of Daphnia magna and <br />fathead minnow for the above referenced permit and outfall failed for the second quarter 2016. <br />These tests were performed by TRE Environmental Strategies, LLC of Fort Collins, CO. Initial <br />results were reported to us on April 27'. The final report has not been issued yet. <br />This is a continuation of the failures from the 3 I quarter 2015 and subsequent accelerated testing <br />reported earlier. We have completed the PTI/TIE phase of testing. The testing only included D. <br />magna so far as part of the PTI/TIE. This series of tests included 100% effluent and 50% effluent <br />and 50% White River water. The tests showed an LC50 of 61% using the 50% effluent. Testing <br />this round utilizing laboratory prepared dilution water showed an LC50 of 71.7% for D. magna. Dr <br />Naddy is currently preparing an addendum to our submitted PTI to address previously discussed <br />concerns. <br />If you have any questions, please call me at 970-675-4322. <br />Sincerely, <br />Scott Wanstedt <br />Environmental Engineer <br />enc: <br />cc: Jeff Dubbert <br />