2009-03-12_REVISION - M1978222UG

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Nuvemco, LLC's Monogram Mine M-1978-222UG Response to Preliminary Adequacy Review March 10, 2009 7) Appendix E, well construction and test report for well MMW 1. The satne general questions for MMW2 also apply to well MMW 1. Was the assumption that 10 R of screen below the SWL would be sufficient for sampling? There were no indications of water during drilling. Even when we lowered a weighted tape to confirm depth of borehole, no water was indicated. Based upon samples, we believed that the best chance for finding seasonal water would be in the continuous sand from 200 to 300 feet. We set the screen from 270 to 300 feet with a 10 foot sump. We placed sand in the annulus from 250 to 310 feet. As described in the supplemental geologic log, we encounter difficulties in setting a bentonite seal above the sand pack. Apparently the annulus plugged off and an alternative fracture or mine was penetrated. When measuring the depth of the inside of the casing some water had entered and a static water level of 290 feet was established at the same time. No indications of water were present before that or the screen might have been set lower. No assumptions were made about purposely setting the screen 10 feet below the SWL. We believed we were completing another dry well. 8) Exhibit T. "The current configuration of the mine area has precipitation draining off the cliffs on the east side or draining into the pit area." Cliffs? Is it directed off site or back into the pit area? As shown on Exhibit T - Figure T-1, the current water divide on top of the knob directs precipitation both into the pit and in essentially all directions. Much of the flow to the east does proceed off very steep slopes with some cliff faces. The natural flow off this hill/knob is and has been off site towards the Paradox Valley. Nuvemco's mining efforts of the Monogram Pit and Knob will effectively reduce offsite flow by mining the pit first which directly runoff in that direction where a retention berm will be established. As the adjacent "knob" is mined, the pit is enlarged and the berm maintained to control runoff. When the ore is finally removed a smaller, lower hill will be contoured out of the replaced waste rock with gentler slopes as shown on Map F-1. 9) Exhibit T: Regarding the statement, "......on this mesa with many mine workings perched several hundred feet above the Paradox Valley and cut by numerous steep canyons the potential aquifers are dry," which potential aquifers are referred to and what are the data to support that the aquifers are dry. Sandstone formations within the Jurassic including the Wingate, Navajo, Entrada, and Morrison Salt Wash Member are potential aquifers. These sandstones are exposed on the flanks of the Mesa and are thus unconfined, and apparently dry. The uranium-vanadium host rock, the Salt Wash Member of the Morrison Formation is separated from the Summerville Formation or equivalent, which is an effective aquitard being composed of thin-bedded shales and mudstone. The dips in Salt Wash sandstones and shales within the "fault blocks" on the Paradox Valley side of the Monogram and Davis mesa are gently to the north-northeast. No springs are observed coming out of these rocks; nor are flows of groundwater directed out of any of the adits or mines in the area. Nuvemco has access to numerous open adits in the Salt Wash including to the east, the Hummer and Jo Dandy mines; the A. No. 1 Extension, and the Opera Box is reportedly dry. Open adits to the south and west include the Uranus West and the Bobtail South which Nuvemco controls by NOI. Further west-northwest, Nuvemco operates the Last Chance Mine which is dry on two different levels. Nuvemco will provide access to these mines for DRMS inspection at any time to demonstrate the lack of water in the Morrison Salt Wash in this area. This empirical 19