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George Patterson <br />September 19, 2013 <br />Page 2 <br />the higher percentage of material removed by the pillaring process and the greater volume associated <br />with those areas. Based on our conversations, approximately 40% of the mine material is removed <br />in non - pillared areas versus approximately 95% for pillared areas. Accordingly, the pillared areas <br />were weighted at 2.375 times the non - pillared areas. <br />The analysis of areas and volumes for the Southfield Mine referenced in our July 19, 2013 <br />evaluation has been presented in more detail the attached Table 1. <br />In reviewing and summarizing the analysis of areas and volume, we noticed that the volume of 3,125 <br />acre -feet for Conceptual Model No.1 in our July 19, 2013 evaluation letter was incorrect. The <br />volume below the evaluation of 5,860.5 feet for Conceptual Model No. 1 should have been 3,135 <br />acre -feet. As presented in Table 2, this update did not change the analysis and it is still estimated to <br />take 120 years for the water to reach the elevation of 5,860.5 feet in the mine assuming the <br />conditions for Conceptual Model No. 1. <br />Mine Inflow Calculations <br />As identified in our evaluation and the August 29, 2013 letter from Janet Binns, the rate of mine <br />inflow of 14 acre -feet for the North mine areas was based on observations by Energy Fuels Coal Inc. <br />personnel. We agree that this is a critical factor utilized in the calculation of mine refilling for the <br />conceptual models presented in our evaluation as indicated by Janet Binns. <br />Information regarding mine inflow was provided by Al Weaver the former Mine Engineer for the <br />Southfield mine and Gary Carrol the former Mine Superintendent for the Southfield mine, who were <br />both onsite and responsible for operating pumps within the mine areas. Their observations were <br />based on observation of the dewatering pump operation. Mr. Carroll was employed at Southfield <br />from 1982 to 2001 and Mr. Weaver from 1985 to 2002. These employees observed the mine inflows <br />and dewatering operations on almost a daily basis during their employment. <br />As indicated in our July 19, 2013 evaluation letter, previous dewatering records include volumes of <br />water that are not strictly "dewatering volumes" because, during certain periods of the mine's <br />history, water was pumped within the mine from the South and West mine areas into the North mine <br />area. Pumping into the 1 North area began in 1987 and continued until 1994. Between 1987 and <br />1994, a majority of the water pumped into the 1 North mine area was pumped from the mine to the <br />surface through the North Entry Well for use. Due to action from the State Engineers Office <br />regarding the use of the North Entry Well, pumping from that well ceased in 1994 and resulted in a <br />temporary cessation of pumping into the 1 North area between 1995 and 1998. A small amount of <br />pumping into the 1 North mine area resumed in 1999 and 2000, as described in our evaluation letter. <br />The 1 North mine area ultimately became connected with the 1 % North and 2 North mine areas and <br />water from the 1 North mine area flowed into these adjacent areas due to a breakthrough during <br />mining in the 1 %z North area during 1995 -1996. Therefore, clarification by the mine personnel of <br />the pumping during dewatering was required to understand the flow records and prepare a <br />www.bbawaterxom i <br />