2014-03-26_PERMIT FILE - M2013064

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volume within the competed basin. Since the basins won't be fully developed for 25± years, some consideration for time should be considered, which the Varra Companies estimate attempts to perform based upon 25 percent exposure over a 6.25± year time frame. Extraction that is not phased is still bound by time and demand, and is reflected in the original Varra Companies estimate, but in fairness, did not identify the division in years, making the calculation less clear to the reader, and a communication fault. We hope the explanation helps remedy this consideration. The per unit costs for discharge came to $0.000249 per gallon, or significantly more than the Western Sugar unit cost. In addition to significantly higher volume of discharge, Part of this may also be attributed to calculated `inflow volume per hour' reported at 143,268.21 gallons per hour. The volume accordingly to be 2,846,115.46 cu.yds. or 574,801,478.08± gallons of water total. Since the exposed area takes time within a 30 year life of the mine, full extraction would occur in apx. 25 years. When the total volume of possible discharge is divided by 4, this means it would take 6.25 years to affect 25 percent of the volume area, and the parcel would be overbonded for this category during this time period for the potential 143,700,368.52 gallons of water if discharge stopped. The Varra Companies estimate utilized the per unit costs derived in the Western Sugar estimate of $0.000026 per gallon. Since unit costs determined by OMLR were used, values utilized at the time in CIRCES are embedded in the unit price logic utilized, where the values were similar. Some values were not similar Varra Companies, Inc. Coulson Resource Project OMLR M- 2013 -064 6 Correspondence to Peter Hays 23 March 2014