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Appendix A



Geotechnical Report

Geotechnical Report



Bulk Sample Collection Project

Prepared for

Cooperative Mineral Resources





November 2009

Geotechnical Report



Bulk Sample Collection Project



Prepared for

Cooperative Mineral Resources





November, 2009









4700 West 77th Street

Minneapolis, MN 55435-4803

Phone: (952) 832-2600

Fax: (952) 832-2601

Geotechnical Report



November, 2009





Table of Contents



Executive Summary ...................................................................................................................................... 1

1.0 Project Purpose and Background............................................................................................................ 3

1.1 Bulk Sample Collection Project Overview ................................................................................. 3

1.1.1 Borehole Mining Method ............................................................................................... 3

1.2 Investigation Objectives.............................................................................................................. 4

1.3 Regional Geology ....................................................................................................................... 4

1.3.1 Geology at the Collection Borehole ............................................................................... 5

1.4 Historical Site Data ..................................................................................................................... 6

2.0 2009 Geotechnical Investigation ............................................................................................................ 7

2.1 Geotechnical Coring (2009) ........................................................................................................ 7

2.1.1 New Field / Core Observations ...................................................................................... 7

2.1.2 Historic Coring (1995 RotoSonic®) ............................................................................... 9

2.2 Laboratory Testing ...................................................................................................................... 9

2.2.1 Rock Testing .................................................................................................................. 9

2.2.2 Soils Testing................................................................................................................. 10

3.0 Conclusions .......................................................................................................................................... 11

4.0 References ............................................................................................................................................ 12









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List of Figures



Figure 1 – Section of Demonstration Project

Figure 2 – Site Map







List of Appendices



Appendix A – Summary of the Geologic Setting of the Site

Appendix B – Historical Coring Logs

Appendix C – 2009 Coring Logs

Appendix D – Photographs of 2009 Core

Appendix E – Rock Laboratory Test Results

Appendix F – Soils Laboratory Test Results









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Executive Summary



Cooperative Mineral Resources (CMR) proposes to collect a bulk sample from two enriched

manganese zones within an oxidized iron-formation at a site in Emily, Minnesota. With the Bulk

Sample Collection Project (the Project), CMR intends to complete a small scale application of

Borehole Mining (BHM) water jet technology to produce the bulk sample. BHM is used to remove

material that can be dislodged into particles and transported in water, and the manganese enriched

zones beneath the Emily site are considered amenable to the BHM collection method. This approach

involves the drilling and development of a borehole into the mineral zone using established well-

drilling procedures. The borehole provides access for injecting high-pressure water into the enriched

zones to produce a mineral material slurry, which is pumped to the surface and filtered. The Project

will also provide information regarding the technical challenges and suitability of BHM for

collecting bulk samples within the iron-formation.



In support of permitting of the Project and design of facilities, a study was performed to evaluate

potential surface subsidence at the Project Area. This report details the geotechnical investigation

conducted at the Project Area in the fall of 2009 and subsequent laboratory testing performed to

gather data in support of a subsidence study. Details and results of the subsidence analyses are

provided in the Subsidence Study (Barr, 2009).



The geology at the collection borehole consists of approximately 180 feet of overburden material

comprised of glacial material (unconsolidated sand and gravel) overlying the oxidized iron-

formation. A cherty caprock exists at the bedrock below the overburden where the bulk sampling is

to take place, but the caprock appears discontinuous across the site. Below the glacial material, the

iron-formation deposit extends to approximately 400 feet below ground surface. The bulk sample

may be collected from two intervals within the iron-formation that are enriched in manganese: (1)

200 to 225 feet below ground surface, and (2) 295 to 410 feet below ground surface. Below about

400 feet is a “clayey” zone in the iron-formation. The existing water table is approximately 30 feet

below ground surface in the sand-and-gravel aquifer.



The core collected in 2009 indicates that the oxidized iron-formation is very heterogeneous, with

variable material type and color. The core samples varied from relatively hard rock layers to a soft,

soil-like material. The majority of the 2009 core consisted of a material between rock and soil-like

material – generally a weak, friable rock or a highly fractured rock often with silty infilling, neither

of which are well-suited to testing in either soils or rock laboratories.



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The rockier portions of the core contained weathered fractures varying in orientation from horizontal

through vertical, with a maximum spacing size of approximately 29 inches and with local zones of

very small fracture spacing. The rock laboratory testing results indicate that the most competent rock

layers within the iron-formation are strong in compression, but also very brittle, as exhibited by

failure at relatively low strains. This also indicates that failure of continuous rock layers, which may

locally apply to the caprock, is likely to be sudden. The fractured nature of the formation, however,

may indicate that harder rock layers will simply fall apart along fracture planes as the material

loosens and caves below them.



The samples from the iron-formation sent to the soils testing laboratory generally ranged from a silty

clayey sand with gravel to weak rock. The core in the iron-formation did not typically contain

enough cohesive material to maintain shape well and often contained gravel or larger rock pieces. As

such, samples had to be cut out of the core and remolded. The results of soils tests on the iron-

formation indicate that the soil matrix within the formation is relatively weak, though the remolding

process is likely to have impacted these results. However, it does appear that where the material is

more soil-like or more fractured, the iron-formation would not be able to maintain a cavity (e.g.,

maintain walls or a ceiling) for a significant amount of time before failure.



The glacial material was a poorly-graded sand with a little gravel. The majority of the glacial

outwash formation is below the water table. The glacial sands are likely to immediately flow into a

cavity, once opened, especially in the presence of water.









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1.0 Project Purpose and Background



1.1 Bulk Sample Collection Project Overview

Cooperative Mineral Resources (CMR), a wholly-owned subsidiary of Crow Wing Power, has

manganese rights for 180 acres and surface access rights to 80 acres for a site located at Emily,

Minnesota. The manganese occurs within an oxidized iron-formation beginning approximately 180-

200 feet below surface. With the Bulk Sample Collection Project (the Project), CMR intends to

complete a small scale application of water jet technology to produce a bulk sample from manganese

enriched zones within the iron-formation.



CMR proposes to collect the bulk sample from the iron-formation using the Borehole Mining (BHM)

process. BHM operations utilize high-pressure water jets to erode subsurface mineral deposits into a

slurry that is pumped to the surface. At the surface, the mineral deposits are filtered from the slurry

yielding raw material for further processing and water for return to the process. The general

configuration is presented in Figure 1.



1.1.1 Borehole Mining Method

CMR proposes to remove the bulk sample from the formation utilizing the Borehole Mining (BHM)

method. A single collection borehole has been completed using established well-drilling technology.

A steel casing has been installed down to 180 feet below ground surface set into the iron-formation.

The outside of this well casing is sealed with cement grout through the entire sandy glacial outwash

formation, from the surface to the top of the mineral zone. The borehole will be extended to the base

of the deposit during the Project.



The BHM Tool will inject high-pressure water via a hydromonitor into the erodible formation.

Lowered to the bottom of the lower collection zone, the hydromonitor is rotated while jetting to

create a disk-shaped zone, or a horizontal undercut, of loosened material and / or cavity space. As

the radius of this disk increases during the collection operation and the slurry is pumped to the

surface, the iron-formation material above the disk will begin to cave downward into the path of the

water jet and add to the slurry.



Progressive caving and removal of the manganese enriched iron-formation during BHM operations

will create a cavity in the iron-formation. The cavity will theoretically be of ellipsoidal shape,

though in reality the cavity shape will be relatively random and unstructured due to the heterogeneity

of the formation, as certain layers or zones will be more or less amenable to the disaggregation





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jetting. The cavity will extend upward and outward during the bulk sample collection, and may

continue to grow for a time following the end of the collection. It is anticipated that the cavity will

extend upward from the iron-formation into the overlying glacial outwash formation, and therefore

some of the sandy glacial material would be expected to move downward into the cavity and be

mixed with the caving formation material.



Based on professional judgment of the design team, the maximum cavity extent would be ellipsoidal

in shape, approximately 90 feet tall by 60 feet in diameter (30-foot removal radius) under optimal

geologic conditions.





1.2 Investigation Objectives

A limited subsidence study was performed to assist in the design of the surface facilities location,

planning for bulk sample collection operations, and preparation of the operation and reclamation plan

for the Project. To conduct this subsidence study, additional site-specific data was necessary.

Samples of the iron-formation were cored and logged and laboratory testing was conducted on the

new samples, as well as on samples of the glacial material from a previous core.



Diamond coring in August of 2009 was intended to provide relatively undisturbed samples of the

iron-formation for testing in the laboratory. The geotechnical investigation included collection of

one core near the bulk sample collection borehole, visual examination of the core, identification of

physical characteristics of the core, and selection of core samples for strength testing. Core samples

and glacial material were sent to soils and rock laboratories for testing. The laboratory results were

used to determine input parameters for models in the subsidence study.





1.3 Regional Geology

The geologic setting of the Bulk Sample Collection Project is described in greater detail in Appendix

A. This section provides a brief overview of the geology, as it is relevant to the subsidence study.



The Project is located in the Emily District of a region referred to as the “Cuyuna Iron-Range.”

Glacial deposits from 50 to 300 feet thick cover all of the Precambrian bedrock in the area. The

geology of the area has been pieced together through a combination of magnetic surveys followed by

drilling to determine the causes of magnetic anomalies.



The iron-formations and associated rocks of the Emily District have been pervasively oxidized and

leached. Oxidation and leaching are variable, with more oxidation associated with fracture zones

along fold hinges (Morey et al., 1991). The iron-formation at the collection borehole averages 230







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feet thick and thins to 150 feet thick to the north. The formation is an iron-rich sequence of

chemically derived sediments that consist of three main units: an upper hematitic chert, a

manganiferous iron-formation, and a basal manganiferous, jaspery, oolitic to sandy chert. The rock

layers within the unit of the iron-formation from which the bulk sample will be collected vary from

thin-bedded and finely-laminated to thick-bedded and granular. The rock is composed of chert and

iron-oxide chemical sediments that have been locally and massively replaced by hematite, goethite,

and manganese-oxides (Dahl et al., 1994). Detailed cross-sections are provided in Appendix A.



Glacial material of sand-and-gravel outwash overlies the manganese-bearing iron-formation at a

thickness of 140 to 185 feet. Surficial peat deposits are present in some locations between Anna

Lake and Ruth Lake, but the surficial deposits in this area are predominantly highly permeable sands

and gravels, with little or no silt and clay. Depth to groundwater is typically in the range of nearly

zero (adjacent to lakes) to 40 to 50 feet below ground surface.



1.3.1 Geology at the Collection Borehole

In 1995, a RotoSonic® Core was drilled approximately 60 feet southeast of the collection borehole

and a continuous core was collected from the ground surface to a depth of approximately 425 feet

below ground surface. The location of the collection borehole and the 1995 RotoSonic® Core are

shown on Figure 2.



In the summer of 2009, multiple monitoring wells were drilled within approximately 200 feet of the

collection borehole. Three of these monitoring wells were drilled and set in the glacial material at

depths ranging from 47 to 59 feet below ground surface. Two additional wells, MW-2D and MW-

3D, were drilled into the iron-formation and set to depths of 203.5 and 213 feet below ground

surface, respectively. At these two deeper wells, no hard caprock layer was detected at the top of the

iron-formation, which was found at depths of 170 and 182 feet, respectively.



The collection borehole is centrally located within the area of the monitoring wells. At the collection

borehole, the iron-formation was found 178 feet below ground surface. During drilling, a very hard

quartzite or chert zone, approximately 5 thick, was encountered at the top of bedrock. This zone

refused sampling with a Pitcher sampler. The borehole was drilled down to 275 feet, or 97 feet into

the iron-formation, for installation of a temporary well for the aquifer pumping test performed in

August of 2009.



After the caprock at the collection borehole refused Pitcher sampling, a diamond-drill (HQ – nominal

2.45 inch diameter) core was advanced to a depth of 429 feet below ground surface at a location

approximately 60 feet northeast of the collection borehole, also in August of 2009. Core was





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collected continuously from the top of the iron-formation (179 feet) to 429 feet below ground

surface. During drilling of the 2009 geotechnical core, 8.5 feet of hard, ferruginous quartzite caprock

was encountered at the top of bedrock above the softer, friable iron-formation.



Locations of all borings of interest are shown on Figure 2.



1.4 Historical Site Data

The continuous core sample from the single RotoSonic® Core performed in 1995 provided the only

available samples of the iron-formation at the Project Area until this investigation. The 1995 core

penetrated both the glacial material and the iron-formation. The samples available from the 1995

RotoSonic® Core indicated that the formation was highly oxidized and primarily comprised of soil-

like material.



RotoSonic® cores are typically highly disturbed by nature of the drilling operations. Sonic drilling

uses high frequency vibrations to drill through rock or soil, and these vibrations tend to “fluidize” the

soil particles adjacent to the drill string. RotoSonic® drilling allows for relatively rapid drilling of a

variety of materials, ranging from soft soils to gravel to rock, and provides continuous samples. This

method is highly valued for environmental drilling or well installations, however the retrieved

samples can be significantly more broken down than their in-situ state and are often inadequate for

geotechnical purposes. A high degree of disturbance can generally be expected with core collected in

soils and softer rock, and therefore the 1995 RotoSonic® Core would not likely provide the best

geotechnical data regarding the iron-formation.



Additionally, boring logs of the West Mesabi Exploration from 1962 were available during the

course of the study. These logs were not geotechnical in nature, but were intended more for geologic

or mineralogical exploration. All historical drilling data are provided in Appendix B. Figure 2

contains the drilling locations of the available historical logs.









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2.0 2009 Geotechnical Investigation



To enhance the understanding of the geology and geotechnical properties of materials at the Project

Area, a geotechnical investigation to collect new and undisturbed samples of the iron-formation was

completed in August of 2009. A single new core was obtained and logged. Samples were selected

for laboratory testing to provide data for use in the subsidence modeling, as detailed in the

Subsidence Study (Barr, 2009). Laboratory testing was performed on these samples to provide data

on the strength and behavior of the iron-formation. This iron-formation testing included index

property tests, such as moisture contents and Atterberg limits on the soil samples, as well as strength

testing, such as direct shear, unconfined compression, and unconsolidated undrained compression

(based on the type and variety of material sampled).



In addition, bulk samples of the glacial material were taken from the 1995 RotoSonic® Core.

Generally, the in-situ structure of granular materials cannot be maintained during typical

geotechnical sampling methods, therefore the disturbed samples from 1995 were sufficient for testing

the glacial sands, though again not for testing of the more complex iron-formation. Laboratory

testing on the sandy glacial outwash included index property tests, such as grain size analysis and

moisture content, and strength testing, such as angle of repose.





2.1 Geotechnical Coring (2009)

A single core using diamond coring was completed in August of 2009 by IDEA Drilling, LLC. In

order to collect undisturbed samples of the caprock (previously mentioned in Section 1.3.1) and the

underlying iron-formation, diamond coring was chosen for continuous sampling of the iron-

formation. A triple tube core barrel, which contains an inner tube system that generally obtains

better recovery in weak zones of rock over samples without the inner tube, was used to collect the

core in the iron-formation.



2.1.1 New Field / Core Observations

Coring through the glacial material obtained approximately 3 feet of sample over the entire 179 feet

of outwash. This poor level of recovery is not uncommon in gravelly sands, of which the overburden

is comprised. After tagging the bedrock ledge, casing was reamed down through the gravelly sands

into the caprock. Triple tube coring commenced at 179 feet at the top of the iron-formation, down to

a final depth of 429 feet below ground surface. The core retrieved was nominally 2.45 inches in









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diameter (HQ). Of the 250 feet of iron-formation cored, approximately 211 feet were recovered, for

a global recovery of 88% in the iron-formation.



Rock Quality Designation (RQD) is a system used to rate the competency of a rockmass. To

determine the RQD of a core in accordance with ASTM D6032-06, all core pieces recovered in a

given run with natural lengths (i.e., not an obviously fresh break due to the coring process) in excess

of 4 inches are measured and those lengths are added. Divided by the length of the core run, this sum

provides the RQD, as a percentage of the core run length. The longest intact piece of core in the

iron-formation found (or the widest fracture spacing) was approximately 29 inches, though the intact

pieces generally ranged from about 5 to 10 inches. The RQD varied from 0 to 100%, with a global

average RQD of 41%. By state-of-the-practice rock mechanics standards, this RQD indicates a

“poor” quality rock, which for purposes of the Project supports that the iron-formation is not a

massive, competent rockmass in the vicinity of the collection borehole.



The core samples in the iron-formation ranged from a residual soil-like material to hard rock. There

was significant fracturing throughout the rockier layers, with fractures often infilled with a clayey silt

or stained black to rust. Fracture orientation ranged from horizontal through vertical with localized

areas of very small fracture spacing. The color of the material varied greatly from white to yellow to

rust to brown to black. The coring log from the 2009 investigation is provided in Appendix C.



During drilling of monitoring wells MW-2D and MW-3D (locations shown on Figure 2), the top of

the iron-formation was found to be relatively soft and drilling conditions were similar to drilling in

deeper intervals within the iron-formation. These drilling observations were in agreement with

visual evaluation of the 1995 RotoSonic® Core. The contact between the iron-formation and

overlying sand-and-gravel outwash in the 1995 RotoSonic® Core is very sharp, but the uppermost

several feet of iron-formation is relatively friable and broken in the core. During drilling of the

collection borehole, a very hard quartzite or chert zone approximately 5 feet thick was encountered.

This zone refused sampling with a Pitcher sampler. This refusal led to using diamond drilling to

collect the 2009 geotechnical core (approximately 60 feet from the collection borehole), where 8.5

feet of hard, ferruginous quartzite cap rock was encountered above very soft, friable iron-formation.



Based on these results, it appears likely that the top of the iron-formation consists of hard chert or

quartzite in some locations, though the upper rock interval in other locations is relatively soft. The

apparently discontinuous nature of the caprock is also supported by the 1962 boring logs, some of









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which indicate that a hard cherty layer was encountered at the top of the formation, while others do

not include this description at the top of bedrock.



Photographs of the core are provided in Appendix D.



2.1.2 Historic Coring (1995 RotoSonic®)

The 1995 RotoSonic® Core provided ample material from the glacial outwash for geotechnical

testing. Because adequate samples of the glacial sands were not obtained with the 2009 geotechnical

coring and because the disturbed nature of core obtained by sonic drilling would not affect testing of

sands and gravels, samples from the 1995 RotoSonic® Core were used for laboratory testing of the

glacial material.





2.2 Laboratory Testing

The 2009 geotechnical core through the iron-formation ranged from a silty sandy soil-like material

with gravel-size pieces to rock. The majority of the 2009 core consisted of a material between rock

and soil – generally a weak, friable rock or a highly fractured rock with silty infilling, neither of

which are well-suited to testing in either soils or rock laboratories.



Given the heterogeneity of the iron-formation, samples were selected to determine upper and lower

bounds for strength parameters to be used in subsidence models. Samples of the soil-like material

were collected for soils laboratory testing to provide lower bounds. Samples of the hard rock

(including, but not limited to the caprock layer) were collected for rock laboratory testing to provide

upper bounds of the iron-formation and data on the caprock layer.



2.2.1 Rock Testing

Rock samples were sent to the University of Minnesota’s Rock Mechanics Laboratory for strength

and deformation testing. Rock testing requires relatively competent samples, and therefore the rock

samples chosen represent the best, most competent core obtained. Non-destructive ultrasonic testing

was performed on the rock to determine deformation properties of the rock. The rock was then

loaded to failure to determine the unconfined uniaxial compression strength.



The results of the rock testing are available in Appendix E. The results indicate that the most

competent rock layers within the iron-formation are strong in compression, but also very brittle, as

exhibited by failure at relatively low strains. This also indicates that failure of continuous rock

layers, which may locally apply to the caprock, is likely to be sudden. The fractured nature of the









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formation, however, may indicate that harder rock layers will simply fall apart along fracture planes

as the material loosens and caves below them.



2.2.2 Soils Testing

Samples of the glacial outwash and soil-like material from the iron-formation were sent to Soils

Engineering Testing (SET) of Bloomington, Minnesota. The samples from the iron-formation

generally ranged from a silty clayey sand with gravel to weak rock. The more soil-like core in the

iron-formation did not typically contain enough cohesive material to maintain shape well and often

contained gravel or larger rock pieces. As such, samples had to be cut out of the core and remolded.

Remolding of samples disturbs the in-situ matrix of the material and generally lowers the strength.

Tests on samples from the iron-formation included water content, dry density, and undrained-

unconsolidated triaxial tests on remolded samples. One unconfined compression test was performed

on a weak rock sample.



The results of tests on the iron-formation indicate that the soil matrix within the formation is

relatively weak, though the remolding process is likely to have impacted these results. However, it

does appear that where the material is more soil-like or more fractured, the iron-formation would not

be able to maintain a cavity (e.g., maintain walls or a ceiling) for a significant amount of time before

failure.



In addition, bulk samples of the glacial material from the 1995 RotoSonic® core were tested by SET.

The glacial outwash formation was a poorly-graded sand with a little gravel. Grain size analyses and

angle of repose tests were conducted on the sand. The majority of the glacial outwash is below the

water table. The glacial sands are likely to immediately flow into a cavity, once opened, especially

in the presence of water.



The results of the soils testing are available in Appendix F.









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3.0 Conclusions



Based on the observations and laboratory testing in the 2009 geotechnical investigations, the

following conclusions have been made regarding BHM operations:



• The iron-formation is highly heterogeneous, comprised of varying layers of hard rock to silty

sandy soil-like material.



• The caprock layer is hard and brittle, but appears fractured and discontinuous.



• Arching within the formation will depend on the extent of the cavity and cavity location

relative to harder rock layers.



• The formation is likely to cave concurrent with or soon after the bulk sample collection given

a large enough cavity.



• The glacial sands are likely to immediately begin flowing into a cavity, if caving occurs up to

the glacial outwash formation, especially in the presence of water.









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4.0 References



1) ASTM D6032-06, Standard Test Method for Determining Rock Quality Designation (RQD) of

Rock Core. 2006 Annual Book of ASTM Standards, Vol. 04.09, West Conshohocken, PA:

American Society of Testing and Materials, 2006.



2) Barr Engineering Co. Subsidence Study. Prepared for Cooperative Mineral Resources,

November, 2009.









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