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8. The 11H-R has a possible small casing leak <br />Not likely. There was no NSI plant production monitoring data that indicated any leakage or <br />pumping anomalies. Tight well and cavity conditions exist in the NSI mining operations. Cement <br />bond analysis of the 11H-R cement bond and cement evaluation of the annulus in the outer most <br />casing, by Halliburton, indicated a good quality cement and good bond is present from 1420 feet <br />to TD. <br />Future Sampling and Possible Well Redevelopment <br />Recent sets of groundwater samples were collected on July 28, 2009 and August 2, 2010. Laboratory <br />results for these samples have been reported and are included in Tables 1 and 2 and in Figures 1 through 9. <br />These sample results indicate a marked decrease in the conductivity and other previously elevated <br />parameters. Field conductivity measurements collected during these sampling events also indicate a return <br />to baseline conditions. NSI has committed to taking weekly field conductivity, pH and temperature <br />readings from the BG-5. These data will be reported to the DRMS and BLM. NSI will also closely <br />monitor these numbers to determine if the ground water has returned to, and is staying at, historical <br />baseline levels. If these readings indicate otherwise NSI will sample the well and send a sample to the <br />laboratory for analyses and if necessary redevelop the open hole interval by purging the well at the current <br />TD until base line conditions are noted in the field. The sampling pump will be decontaminated cleaned <br />and reinstalled and sampled again to demonstrate the groundwater has reached baseline conditions. <br />Weekly field readings will be collected until 2 months of baseline/stabilized readings can be demonstrated, <br />at which time, the normal sampling protocol will resume. <br />Daub & Associates, Inc. BG-5 GW Sampling Anomaly 8-24-10 rgd <br />Printed: 8/24/2010 Page 15 of 15