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Michael Quinlan <br />From: San Juan Drilling Inc [sanjuandrilling @msn.com] <br />Sent: Friday, June 24, 2011 6:00 PM <br />To: mquinlan @gaultgroup.com <br />Subject: RE: Hole abandonment <br />Attachments: Bentonite Tablets compressed to control swelling time in a well seal..webarchive <br />Michael, <br />This is a rough estimate using bentonite tablets to fill a 4 inch hole in diameter at 2,800 feet deep. <br />We will need to use 6.88 pounds of bentonite tablets per 1 ft depth in pounds. 4 inch holes at 2800 feet will require <br />19,264 pounds of bentonite for each 2800 foot hole. Bentonite tablets come in 50 pound buckets at a cost of $55.95 per <br />bucket so we will need 385 buckets to fill a 4 inch hole in diameter, 2800 foot deep. This will cost <br />$21, 540.75 per hole at 14 holes will be $301,570.50. <br />As per our contract we charge cost of materials plus ten percent, which will be a total of $331,727.55 <br />We charge $180.00 p /hr to fill the holes and estimate it to take approximately 6 hrs to fill a 4 inch hole in diameter at <br />2,800 feet. This will be an estimated cost of $1,080.00 per a 4 inch hole in diameter at 2,800 ft with a cost of $15,120 for <br />14 holes. <br />The estimated grand total would be $346,847.55 to fill a total of 14, 4 inch in diameter holes at 2,800 feet deep. <br />The cost of the bentonite tablets were effective August 20, 2008. The price of the bentonite tablets is subject to change. <br />I have attached the "quantity pricing for bentonite tablets" where I received the pricing. I am awaiting a phone call back <br />to get an up to date pricing of the bentonite. <br />If you need any further information don't hesitate to call. <br />Thank you, <br />Terry Ray <br />San Juan Drilling <br />1127 6500 RD. <br />Montrose, CO 81401 <br />(970) 209 -6424 <br />From: mouinlanCa�gaultgroup.com <br />To: sanjuandrilling(amsn.com <br />Subject: Hole abandonment <br />Date: Fri, 24 Jun 2011 12:55:25 -0600 <br />Hello Terry, <br />Regarding Colorado Division of Reclamation Mining and Safety requirements/ procedures for permanent abandonment of <br />mineral exploration drill holes, see attached docs. <br />1. DRMS's rules and regs, section 5.4 <br />2. DRMS drill hole abandonment final report <br />Also comment from DRMS regulator officer with oversight from that region below of my question for any further technical <br />guidance: <br />1 <br />