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Mr. Leigh Simmons July 9, 2015 Page 4 <br />due to the many factors involved, not withstanding the coordination of three separate <br />contractors to safely complete the project. EFCI notes the DRMS references the use of <br />drilling mud or drilling fluid. While this may be appropriate for other operations, it is not <br />appropriate for drilling into known voids due to circulation issues. We appreciate the <br />suggestions and will pass them on to any contractors selected. <br />EFCI would also like to include additional information in this submittal. As you are aware, <br />representatives of Energy Fuels Coal, Inc. (EFCI) provided a detailed cost estimate (bid) in <br />our meeting on May 27, 2015 from Young's Drilling Services to re -drill MWNW in a new <br />location offset from the current location. As was explained at the meeting, given the nature <br />of the project, the limited number of available drillers and contractors, and the financial <br />aspects of the project, EFCI did not initially attempt to procure multiple bids for this project. <br />However, in discussions following our meeting, the DRMS felt strongly that a second bid to <br />re -drill this well would be useful in making a final determination about how to proceed with <br />this issue. <br />Therefore, in the interest of satisfying the interest of the DRMS in a second bid to re -drill <br />this well, EFCI authorized Gorham Energy Consultants to look into finding additional <br />drilling contractors to conduct the work in accordance with procedures specified by EFCI in <br />consultation with the contractor. In summary, Gorham Energy Consultants were not <br />successful in finding interested and/or qualified contractors who could do this work in the <br />time frame required. Due to the short duration of the project and that the fact that it involves <br />the collaboration of three different contractors (licensed water well/ oil field rig/nitrogen <br />supplier -with technician), these factors make the project unique and complicate the process <br />of securing bids from a combination of potential contractors. Also, for larger drilling <br />contractors, the relatively small and short-term nature of the project makes the project <br />financially undesirable. EFCI believes they were fortunate to have found a combination of <br />two local drilling contractors willing to participate, in addition to Precision Air Drilling from <br />Grand Junction who will provide the nitrogen required for safety and fire reasons. Based on <br />our recent outreach and inquiry, finding a second set of drilling contractors locally, or even <br />regionally, to meet the specifications of this project is not likely but in fact, very unlikely. <br />EFCI has spent an inordinate amount of time, effort, and financial resources on this issue. <br />The difficulties of procuring multiple bids are readily apparent given the specialized nature <br />of this project and the unique characteristics presented under the regulatory environment. <br />EFCI feels strongly that the sole bid provided is competitive and representative, and <br />additional bids are not likely to indicate that the project is markedly less expensive. On the <br />contrary, it is very likely that as the geographic distance increases in an effort to find <br />qualified contractors, one can reasonably assume that the costs will go up due to increased <br />mobilization and crew expenses. Appendix A documents the results of the effort to secure <br />additional bids for this project. <br />