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<br />Memo - Cathy Begej - Grassy Gap Bond - 2 - April 27, 1989 <br />There is a substantial difference in the ownership and operating costs <br />for the 631E scrapers. Rockcastle claims 588.00/hr. Our estimate is <br />twice that, at 5164.00/hr. Our operator costs are slightly higher also, <br />520.00/hr. vs. 514.00/hr. (Cathy - I attempted to verify the 5164.00/hr. <br />cost in Tom's Cost Reference Guide. The figure I found was 5115.00/hr. <br />Therefore I would like to pursue this a little further with him. He is <br />out of the office this week so this may have to wait until I get back or <br />you can ask him about it if you want to.) <br />The capacity figure which I am using for the scrapers is 26 lcy. This <br />is equal to 22 bcy. Rockcastle has chosen to use a capacity of 25 bcy. <br />Therefore their production figure is higher than ours; <br />(1200 bcy/hr. vs. 878 bcy/hr. (1036 lcy/hr.)). <br />Due to these two factors our estimate is substantially higher than <br />theirs. This new estimate coincides fairly closely with my December 1488 <br />estimate. This backfilling estimate is 510,000 lower, whereas this <br />tops oiling estimate is b4 ,000 higher, than the December 1988 estimates. <br />Rockcastle raised some questions regarding use of bcy, lcy, and swell factors <br />in these calculations. After considerable thought and discussion I have <br />concluded the following: <br />I agree that the stockpiled material is probably bcy. However, once the <br />material is loaded it becomes lcy. I have converted my production <br />figures into bcy since that is what Rockcastle seems to prefer. But the <br />bottom line is unchanged. <br />i. e. 496,583.38 bcy ~ 878 bcy/hr. = 565.58 hrs. <br />585,968 lcy -:-1036.22 lcy/hr. = 565.49 hrs. <br />Therefore the use of bcy vs. lcy is a non-issue. The real issues with regard <br />to this bond estimate are: 1) the actual capacity of the scrapers, and 21 the <br />ownership and operating costs. <br />The bottom line shows that this estimate is 540,000 less than the December <br />1988 estimate. This still represents a significant increase over the amount <br />of bond that we currently hold. <br />If you have questions, let me know. If Rockcastle has further questions <br />regarding ownership and operating costs, they should contact Tom Gillis. <br />/ern <br />5681E <br />