SITE INFORMATION AND CORRESPONDENCE

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Mr. James Taylor . - 2 - . 4 October 2007 Zero Valent Iron In April 2005, ContiGroup Companies injected zero valent iron into the second water-bearing zone, about 60 to 80 feet below ground surface, by means of hydrofracturing. Four fractures and four injections were placed at each of four injection points aligned parallel and proximate to the grain silos. Monitoring wells MW-913 and MW-106 were installed near the ends of two of the fractures. About 18 months following injection, carbon tetrachloride declined from about 300 ug/I to 130 ug/I, and chloroform declined from about 80 ug/I to about 50 ug/I, as evidenced from MW-313, adjacent to an injection point. Concentrations of these constituents in MW-913 and in MW-10B declined from 1,300 ug/I to about 800 ug/I and 500 ug/I, respectively, in the same time period. Recirculation Pilot Study In the Remedial Action Plan, ContiGroup proposes to install two extraction wells (EW-11 B and EW-1213) into the second water-bearing zone downgradient of the iron injections, install two injection wells into two of the iron injection areas (IW-BH1, and IW-BH2A), and a monitoring well between the injection wells and the extraction wells (MW-1313). The placement of the proposed wells in relation to existing wells and the iron injection points are shown on attached Figure 1. The Remedial Action Plan proposes to operate both extraction wells and injection wells concurrently. As discussed in our May 2007 meeting with you, Ms. Linda Huff, Mr. Jim Huff and me, and as reported in the Second Quarter 2007 Report for GZVI, the scale of the pilot study will be reduced to include operating only one extraction well and one injection well pair. The objective of the pilot study is to evaluate if a large scale recirculation system is feasible at this site and to update and calibrate the groundwater model. When the pilot study is completed, ContiGroup intends to apply for Waste Discharge Requirements to scale up the recirculation system to include additional extraction and injection wells. ContiGroup may choose to install the additional extraction and injection wells at this time in order to economize on mobilization costs. Considering the location of existing monitoring wells, operating extraction well EW-11 B in conjunction with injection well IW-BH2A would provide the most hydrogeologic information. The well pair will operate at 1 gallon per minute while transducers placed in MW-10B, MW-13B and EW-12B, if EW-12B is installed concurrently with EW-11 B, will record water level data. If the extraction or injection rate cannot be sustained, the extraction rate will be reduced. The transducers will continue recording until water surface equilibrium is reached. When equilibrium is reached, transducers will be removed, and water surface elevations will be measured monthly for up to three months. Regional Water Quality Control Board, Central Valley Region (Regional Water Board) staff request that ContiGroup also install a transducer in MW-4B to measure the drawdown from the extraction well, a transducer in MW-96, to measure upgradient effects of the injection well IW-BH2A, and a transducer in MW-313 to verify that the injection area is accommodating all the injectant. In order to obtain the most information from this extraction/injection well pair, proposed MW-13B should be re-located between EW-11 B and IW-BH2A, as initially proposed in the Remedial Action Plan. The pilot study is proposed to run for one year, the estimated time to circulate one pore volume.