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RECLAMATION SECURITY ESTIMATES

RECLAMATION SECURITY ESTIMATES. MANDATE: Estimate the cost of reclamation assuming that it becomes necessary for the government to carry out the work. Philosophy. Consistent methodology & approach for all mines Estimate only as per the mandate:

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RECLAMATION SECURITY ESTIMATES

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  1. RECLAMATION SECURITY ESTIMATES • MANDATE: Estimate the cost of reclamation assuming that it becomes necessary for the government to carry out the work Brodie Consulting Ltd.

  2. Philosophy • Consistent methodology & approach for all mines • Estimate only as per the mandate: • More is not better (this is contrary to common industry approach) • Do not aim high with expectation of being negotiated/arbitrated down • There is no benefit to a security requirement which is greater than might actually be required. Brodie Consulting Ltd.

  3. Approach • Evaluation of site condition – review of available information, including site inspection • Evaluate closure plan • These steps do not constitute an audit. • There is limited verification • Need to rely upon information presented in the closure plan • INAC & BCL do not do reclamation engineering for any deficiencies Brodie Consulting Ltd.

  4. Approach • Identify a scope of work (tasks & quantities) which are likely to meet reclamation objectives, considering the site condition • Identify appropriate unit costs for each task Brodie Consulting Ltd.

  5. COSTING ISSUES • Tasks not included in cost estimate • Optimistic performance expectations • Optimistic unit costs • Inadequate consideration of uncertainty Brodie Consulting Ltd.

  6. Uncertainty • What is the likelihood that the actual cost will vary from the estimated cost ? • Uncertainty concerns fit into 3 broad groups: • Mine plan – shape, quantity, geochem., hydrogeology • Reclamation plan – how well will the reclamation measures work • Cost of reclamation work Brodie Consulting Ltd.

  7. Pine Point Pilot Project • Many technical details are lacking: • The few engineering drawings are basic • Geochemistry of the expected rock types • Volume and chemistry of water to be drained from within the freeze fence. • Process plant mass balance • Mining sequence and schedule of backfilling • Ore handling, tailings &DMS reject stockpiling on surface Brodie Consulting Ltd.

  8. Pine Point Pilot Project • Tailings Management • 42% of ore is to be returned U/G as paste backfill • No information is presented as to where the other 58% will go • Let’s look at this from 3 viewpoints Brodie Consulting Ltd.

  9. Quantities of Ore/Concentrate/Tailings • Ore is 5.49% Pb and 11.16% Zn • Allowing for conversion of galena & sphalerite and assuming 95% recovery and 90% purity of concentrate  31% of ore is removed as concentrate • Therefore 69% of ore becomes tailings • Due to volume expansion from crushing, this % of tailings cannot be returned into the mine Brodie Consulting Ltd.

  10. Delay Until First Backfilling • Stopes must be mined out before backfilling commences • Mines develop multiple stopes and produce continuously from each one to provide a steady feed to the mill and smooth the cycles of mining (drill/blast/mucking) • It could easily be 3 months of production until first stope is backfilled • This represents ¼ of mine production which will be stockpiled on surface Brodie Consulting Ltd.

  11. Backfilling Secondary Stopes • Once primary stopes are backfilled, secondary stopes can be mined • After ore is removed there is no incentive to backfill secondary stopes (cost of thickening, pumping, bulkheads, labor) Brodie Consulting Ltd.

  12. Tailings Management Summary • Tailings management is not addressed in the PPPP Project Description, other than to suggest U/G disposal • There is no supporting evaluation to indicate that all tailings can be placed U/G • When considered from 3 different viewpoints, significant on-land tailings seems certain, potentially in the range of 115,000 m3 to 255,000 m3 Brodie Consulting Ltd.

  13. PPPP – Key Assumptions In Reclamation Security • The company abandons the mine. • Tailings & waste rock have ARD/ML issues • All ARD/ML material is to be placed U/G • The settling pond is not a permanent tailings facility • The mine workings flood and the perimeter freeze fence thaws. • The freeze contractor has left the site and removed the refrigeration plant • Reclamation activities include: • Remobilization and operation of the refrigeration plant • Dewatering of the mine Brodie Consulting Ltd.

  14. PPPP – Key Assumptions In Reclamation Security • Slurry and pumping of the tailings into the mine • Excavate and dispose surplus tailings in historic open pit • Excavation and disposal of waste rock in the shaft and raise-bore with surplus to open pits • Construction of concrete cap for the shaft and raise bore • Flushing of the freeze fence piping system and off-site disposal of the brine Brodie Consulting Ltd.

  15. PPPP – Key Assumptions In Reclamation Security • Cut-off top of 600 pipes and remove brine circulation pipes • Removal of hazardous materials from buildings and disposal off-site • Demolish buildings and dispose in Hay River landfill, tipping fee required • Remove contaminated soil from ROM stockpile area, concentrate load-out area and railhead stockpile area • Fold in settling pond liner and doze settling pond dike to bury liner and restore drainage. • Remove railhead buildings to Hay River landfill Brodie Consulting Ltd.

  16. SUMMARY • The Tamerlane PPPP Project Description is lacking many technical details and is inadequate with respect to tailings management • On land tailings disposal is certain to occur • Closure planning and security is required to mitigate potential environmental effects • Reclamation security is preliminarily estimated to be in the order of $5 million, of which about 30% is water-related Brodie Consulting Ltd.

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