Tailings and Waste Rock Management Alternatives Study Kemess North Tailings and Waste Rock Management Alternatives Study

AGENDA Waste Management Alternatives Introduction Risk Assessment and Ranking Methodology Rejected Options Alternatives and Alternative Assessment Preferred Alternative -  Duncan Lake Fish and Fish Habitat Inventory -  Conceptual Fish Habitat Mitigation and Compensation

Kemess North Project Open pit copper/gold (similar to Kemess South) Potential to extend mine life by at least 11 years Reserves estimated at 4 million ounces gold and 1.5 billion pounds copper 250 Mt waste rock and 330 Mt tailings

Open Pit Mining Grades too low for underground mining (0.34 g/t gold, 0.18% copper) Highest grade ore at bottom of ultimate pit Potential to increase reserves and/or to mill other deposits in the region

Waste Alternatives Criteria Safe & Environmentally Sound Containment and ARD Control for waste rock and tailings, for both Operations and for Long-Term Closure Design – accessible, “robust” dams with minimum heights, minimize # of facilities that could require long-term monitoring, minimize risk of failure, zero discharge Location – minimize environmental footprint and catchment areas. ARD Control – long-term disposal for both tailings and waste rock (minimal, if any, requirement for long term treatment of acid drainage)

Waste Characterization Existing Drainage Stream Water Quality pH < 5 Copper 0.24 mg/L Iron 21 mg/L Waste Rock NP/AP 95% of samples less than 2:1 Tailings NP/AP 1:1 Kemess North contains elevated sulphides (as compared to Kemess South) Two streams draining the deposit are naturally acidic > 90% of waste rock will become acid generating if allowed to oxidize. 100% of tailings potentially acid generating

What is Acid Rock Drainage (ARD) NO Acid Rock Drainage

Options to Control ARD Remove oxygen by submerging tailings and waste rock e.g. Voiseys Bay Tambogrande Equity Silver tailings Snip and Eskay Mines Cover to reduce water inflow e.g. Equity Silver waste rock Treat runoff for hundreds of years ARD + Lime = Sludge + Clean Water e.g Inco, Elliot Lake, Britannia? Samatosum, Equity Silver ARD Control for waste rock is more difficult than tailings, which are conventionally stored in a saturated state.

Framework for Alternatives Assessment “Brainstorming” session on all potential alternatives and pre-screening of alternatives Conceptual layouts of alternatives Risk Assessment and cost comparison Multiple accounts analysis and compensation planning Alternative Selection

Location Plan of Rejected Screening Sites Pre-Screening Considerations Topographically capable of storing waste rock and/or tailings. Minimize catchment areas to reduce long term water management risks. Proximity to mine Management ease (eg. Avoid multiple sites) Acid Rock Drainage management Sustainability and future extensions to ore reserves Kemess North Area

Location Plan of Selected Screening Sites Tailing Alternatives (330 Mt) Raise existing tailings dam Infill existing open pit (25% of tailings) Raise open pit Sites L & M (close to Kemess South Mine) Site C and Kemess Lake Duncan Lake (25% of tailings) Waste Rock Alternatives (250 Mt) North & Northeast Dumps Site C Duncan Lake (50% of waste rock)

Kemess North Area

Risk Assessment Methodology Based on the failure modes effects analysis (FMEA). Quantification basis developed for US Forest Service : New World Mine EIS. Modified to address issues with Kemess

Risk Assessment Methodology Workshop “Brainstorm” Session on Conceptual Designs Identify potential problems (hazards) Identify consequence Quantify Likelihood (5 level scale) Quantify Consequences (5 level scale) Quantify Level of Confidence Identify Compensating factors that could reduce risk Binning of Risks and Classification into Risk Levels (1 to 5) Risk Management to reduce risk

Quantification of Likelihood Levels

Definition of Consequence Levels

Risk Assessment Worksheet

Risk Binning Example – Duncan Lake Tailings and PAG

Screening of Tailings Only Alternatives

Risk Points (Numerical Accounting for Risk Levels) Assignment of risk points to each risk level provides a qualification of the importance of higher risk levels. Risk Level Points Level 1 750 Level 2 150 Level 3 25 Level 4 5 Level 5 1

Screening of Tailings Only Alternatives

Screening of Waste Rock Only Alternatives

Open Pit Raising – Tailings Alternative Main Risk Issues 100 m high dam stores 250 Mt (now need storage for +70 Mt) Removing sulphides from cycloned sand

Raise Existing Tailings Storage Facility Alternative Main Risk Issues Dam stability (raise from 145 m to 185 m) Water management Removing sulphides from cyclone sand.

North and North East Cirques – Waste Rock Dumps Main Risk Issues Long term integrity of low permeability soil cover for closure (minimize water inflow) Long term stability of 200 m+ high “Water” dam for closure (saturate to eliminate oxygen) Long term risk of water treatment and sludge disposal.

Site C – Tailings and Waste Rock Option Up to 150 m high dam at north and south ends. Risk of high groundwater seepage. Wildlife corridor.

Duncan Lake Tailings and PAG Storage Option Up to 70 m high dam at north end. 10m and 30 m high dams at south end. Existing Lake would store 50% of waste rock or 25% of tailings Raise dams 40 m to store 100% more volume (future ore reserve potentials)

Waste Management Options for Tailings and Waste Rock Duncan Lake Raise Existing Dam + NE Waste Dump + Water Treatment Raise Open Pit + NE Waste Dump + Water Treatment Site C

Tailings and Waste Rock Alternatives Summary of Risk Counts LOW OVERALL RISK HIGH

Tailings and Waste Rock Alternatives Cost / Tonne of ore milled Duncan Lake ($1.14) Site C (5 km east of Kemess North pit) ($4.63) Existing Tailings Storage Facility and NE Dump ($3.09) Kemess South Pit Raised and NE Dump ($1.95)

Multiple Accounts Analysis Determine Differentiating Accounts that affect Environment, First Nations, Socio-economics, Project Viability and Sustainability Water Quality – Long-term water quality protection for aquatic life and downstream communities. Biophysical Environment – Fisheries, physical changes to aquatic and terrestrial habitats, traditional resources. Community / Social – Local First Nation communities and communities beyond. Project Viability – Cost Closure – Long-term sustainability and protection of traditional resources.

Multiple Accounts Analysis

Conclusions of Multiple Accounts and Risk Assessment Water quality risks are lower for Duncan Lake (trade off between aquatic risks during operation of Duncan Lake versus longer term risks with ARD from “on-Land” waste dumps. Biophysical risks are lower for Duncan Lake due to smaller footprint. However, aquatic impacts during operations are higher due to the use of the lake. Long term closure risks are lower for Duncan Lake. The cost risk for Duncan Lake is lower because of the lower dams and lower uncertainty for closure.

Kemess North Post Closure

Conclusions Duncan Lake is the lowest risk and the best technical and cost alternative to store all waste rock and tailings. The next “best” alternative is to raise the existing open pit and construct “on-land” waste rock dumps that will require: Long term closure liability and closure risk of ARD from “on-land” waste rock dumps Limitation of raising of dam that would require raising the existing tailings facility to use the latest ore reserve estimates. Limitation on mining future ore reserves and longer term sustainability of mining in the project area. Additional $300 million cost

Conclusion (continued) Duncan Lake habitat will be destroyed and this requires: Quantification of aquatic habitat of Duncan Lake and potentially affected streams (Duncan and Attycelley Creeks) Mitigation of Duncan Creek stream flow reduction and reclamation of aquatic habitat for closure of Duncan Lake; and Compensation for loss of productive habitat by construction of new habitat and enhancement of existing habitat. The Environmental Design and Environmental Impact Assessment Teams are currently carrying out detailed analyses of aquatic habitat and compensation planning and a preliminary update on this work is summarized in the following presentation by Hatfield Consultants.