1. Kemess North Supplementary Alternatives Workshop

2. Workshop Purpose Communicate the alternatives available and assess alternatives together. To get federal and provincial agency agreement that Kemess North waste rock and tailings is PAG and best management practices for ARD prevention is sub-aqueous disposal. To confirm the final alternative(s) and agree on the review process for the environmental assessment.

3. Alternatives Assessment to Date October 2003 - Project Description Submitted November 2003 – First Agency Meeting December 2003 – Pre-feasibility Alternatives Assessment Submitted January 2004 – Stakeholders Alternatives Meeting February – March 2004 – Feedback and Reassessment March 2004 – Supplementary Alternatives Report April 2004 – Agency Alternatives Workshop

4. Alternatives Presentation Agenda General requirements Description of all alternatives Summary of main alternatives and combinations of alternatives Comparison of alternatives (cost and risk) Environmental comparison of alternatives

5. CEAA Alternative Assessment Requirements What is the project need and purpose? What are the alternative means of carrying out the project? What are the alternatives to the project?

6. Project Need and Purpose Purpose - To produce copper/gold concentrate in an environmentally responsible manner that returns an economic benefit to the company. Metal Mines in BC CommodityProduction Commenced Production Projected Closure Kemess South Open pit Copper Gold  50,000 t/d 19982008 Highland Valley Open pit Copper, Molybdenum Silver, Gold  136,000 t/d  49.9 Mt milled in 2002  181,300 t copper produced in 2002 19862010 Myra Falls Underground Copper, Zinc, Lead Gold, Silver  4000 t/d 19662012+ Eskay Creek Underground Gold Silver  300 t/d  352,070 oz. gold, 17.0 M oz. silver in 2003 19952006 Huckleberry Open pit Copper, Zinc Molybdenum  21,000 t/d 19972007 Endako Open pit Molybdenum  27,000 t/d 19652012+

7. Alternative Means of Carrying Out the Project Mining Methods – Underground mining is too expensive for the ore grades. Plant Optimization – Milling will be increased to meet the economic requirements of the deposit. Waste Management Options – Typical of mining, waste management alternatives are a critical project component.

8. Engineering Guidelines for Alternatives ~320 Mt (previously 250 Mt) of potentially acid generating tailings ~200 Mt (previously 375 Mt) of potentially acid generating waste rock 75% to 90% of waste rock will be acid generating if not kept submerged under water. Minimize number of sites. Minimize heights and complexities of dams. Minimize water management, particularly on closure.

9. Environmental Guidelines for Alternatives Minimize footprint. Minimize aquatic and terrestrial impacts. Minimize metal leaching and ARD. Minimize long term closure risk. Sustainability. (Sustainable Development defined as development that meets the needs of the present, without compromising the ability of future generations to meet their own needs.) – continuation of economic benefits

10. ARD Prevention – Industry Accepted Methods Provincial ARD Guidelines – “the storage location must remain permanently flooded and geotechnically stable.” Natural Resources Canada and MEND – “The target is for new mines to open without long-term concerns about acidic drainage upon closure.”

11. Underwater Facilities Elliot Lake area tailings

12. Underwater Facilities Equity Silver Tailings Pond

13. Underwater Facilities Eskay Creek Waste Rock Disposal – Albino Lake and Tom MacKay Lake

14. Underwater Facilities Musselwhite, Ontario

15. Flooded and Reclaimed Site Dennison Mine – Elliot Lake, ON

16. Other Mines Affecting Lakes Diavik

17. Other Mines Affecting Lakes Ekati

18. Underwater Facilities and Research Louvicourt Tailings Pond

19. ARD Control – Covers & Treatment Equity Silver: Low permeability glacial till cover. Marginal improvement in ARD control. Cover concerns with: Freeze-thaw Plants (roots) animals Alternative groundwater paths Erosion Cover can minimize seepage but rarely provides an oxygen barrier to limit ARD. Water Treatment Plant: likely hundreds of years of liability.

20. Waste Quantities Comparison (source: Minfile) Bell Copper – 70 Mt PAG tailings Huckleberry – 36 Mt PAG tailings Equity Silver – 33 Mt PAG tailings Kemess South – 89 current, ~200 Mt expected PAG tailings Kemess North – need to dispose of >300 Mt PAG tailings and >200 Mt PAG waste rock

21. Alternative Identification Considered all sites within about a 10 km radius that could store some or all of the waste. Integrate/consider technology variations. Considered combinations of alternatives.

22. Screened Technologies Tailings Thickening & paste: reduced volume, however still requires a dam and saturation of sulphides. Dewatered: reduced volume & “dry” stack, however still need to compact “dam” support zone. ARD from partially saturated tailings. Co-disposal with waste rock: Only a portion of the tailings could be mixed. Concerns with mixing, and ARD from the final mixed product. Desulphidize Tailings: Used to produce construction sand from cycloned tailings. Can be used for capping.

23. Screened Technologies ARD Control Saturate under water: Preferred ARD control method. Base consideration for this project. Cover: Poor success rate (e.g. Equity Silver Mine); concern with long term integrity of cover and potential for “alternative” seepage paths. Water Treatment: Concerns with long term operation, maintenance of facility (hundreds of years) and sludge disposal. Need disposal site for sludge. Limestone mixing: Limited ability of lime to properly mix and balance ARD.

24. Screening Process 1.Layouts and cost estimates for all alternatives. 2.Risk Assessment using Failure Modes Effects Analysis (FMEA) procedures which are recommended by the Mining Association of Canada and adopted by numerous Regulatory Authorities in Canada and USA. 3.Environmental Comparison, including compensation potential.

25. 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)

26. Screened Locations Existing Tailings Facility Advantages & Disadvantages Stores tailings only. Limited new disturbance. Dam safety risk due to very low foundation shear strength. Slopes 5.5H:1V + Toe of dam encroaches on Mill Creek. High pumping head. Project Components Dam raise from 145 m to 170+ m high. Pumping head 310 m New water diversion dams and diversion canals/pipelines. Continue to use de-sulphidized cycloned sand for construction of dam. Cost $400 million +

27. Screened Locations Open Pit - Tailings Advantages & Disadvantages Stores tailings only (max. 250 Mt) Limited new disturbance. Dam safety risk with 100 m high dam above the plantsite. Toe of dam “encroaches” on Kemess Creek. Project Components Construct 100 m high dam around the open pit. Use de-sulphidized cycloned sand for dam construction. Pumping head 120 m. Some potential for weak clay layers in the dam foundation. Cost: $200 million

28. Screened Locations Site L - Tailings Advantages & Disadvantages Stores tailings only ( 250 Mt +) Limited new disturbance. Very poor storage/dam ratio due to presence of mine waste rock and topograhy. Project Components Construct 100 m high dam in the vicinity of the existing waste dump. Use de-sulphidized cycloned sand for dam construction. Pumping head 120 m. Potential for weak clay layers in dam foundation. Cost: $785 million +

29. Screened Locations Site M - Tailings Advantages & Disadvantages Stores tailings only (max. 250 Mt +) Disturbance of terrestrial/forested areas and wetland. Poor storage/dam ratio due to topograhy. Project Components Construct 100 m high dam in the vicinity of the existing airport and power line. Use de-sulphidized cycloned sand for dam construction. Pumping head 120 m. Potential for weak clay layers in dam foundation. Cost: $440 million +

30. Screened Locations Site F - Kemess Lake - Tailings Advantages & Disadvantages Infills Kemess Lake. Stores tailings only (max. 250 Mt) Disturbance of terrestrial/forested areas and wetland. Very difficult geotechnical conditions. Project Components Construct 150 m high dam across south end of Kemess Lake. Use de-sulphidized cycloned sand for dam construction. Pumping head 170 m. Weak foundation. Unstable bedrock geology in left bank of impoundment. Cost: $335 million

31. Screened Locations Site C - Tailings/Waste Rock Advantages & Disadvantages Could be raised 70 m to store mine waste rock. Disturbance of terrestrial/forested areas and wetland. Significant wildlife corridor. Long haul distance for mine waste rock and high pumping heads for tailings. Project Components Construct two 100 m high dam Use de-sulphidized cycloned sand for dam construction. Pumping head 260 m. Cost: $260 million + tailings; $775 million waste rock/tailings

32. Screened Locations Duncan Lake - Tailings and Waste Rock Advantages & Disadvantages Loss of Duncan Lake habitat. Sustainable – allows for future use of regional resources. Most efficient site. Project Components Construct one 80 m high dam and two 20 m high dams to store all tailings and waste rock. Pumping head 160 m. Cost: $60 million tailings, $140 million waste rock/tailings

33. Screened Locations Attycelley - Tailings and Waste Rock Advantages & Disadvantages Loss of Attycelley stream habitat. Impact on terrestrial and wildlife corridor. Difficult geotechnical conditions and difficult seepage control. Large watershed increase closure water control risk. Project Components Construct 100 m high starter dam, raise to 160 m high. Pumping head 200 m. Foundation conditions expected to be complex. Dam use de-sulpidized cycloned sand. Cost: $625 million waste rock/tailings

34. Screened Locations NE Cirque – Waste Rock Advantages & Disadvantages Geotechnical risk of water dam. Long term risk of ARD from cover and treatment alternatives. Lowest haulage cost. Limited disturbance of terrestrial environment. Project Components 200 m high waste rock pile ARD controlled by: Water dam at downstream toe. Low permeability covers. Water treatment and sludge disposal. Costs $125 million+

35. SITE DESCRIPTION OR TECHNOLOGY CONSIDERED USEREASON FOR CONCERN Thutade LakeWaste rock disposalNo containment for controlling contaminant release or treating contaminants. Thutade LakeTailings disposalNo containment of contaminants. Valleys on far side of Thutade Lake Tailings disposalTailings pipeline across Thutade Lake is expensive and pipeline breaks cannot be contained. Mainstem Kemess Creek just upstream of the plant site Waste rock and /or tailings disposalComplex and potentially weak foundations for a high dam. Complex water management for a large catchment area (>100 km 2 ) Site H, northeast of existing mine in the Kemess Creek watershed Potential option for containment of 250 Mt of tailings or waste rock Very high dam in relation to containment volume. Dam heights greater than 200 m Cirque immediately west of the open pit Temporarily store waste rock during operations and backfill in the North pit after closure 18% of the waste rock is already producing acid and the onset of ARD in 54% of waste rock is expected within the mine life; therefore, any temporary storage would have to be lined and have a drainage collection and treatment system Mini-pitReduced waste volumesNot economic since all ore reserves are at bottom of proposed pit. There is no reserve cut-off that could justify a smaller pit. North DumpDry cover land disposal of waste rock Dry covers have not had enough success in BC to ensure prevention of ARD given the extreme weather conditions. NE CirqueFlooded waste rock storageUnacceptable long-term risk for a 200m waste rock and water-retaining dam. Tailings Sulphides Removal (desulphurization) Reduced ARD potential of tailingsSulphides can be removed from cycloned sand,. Thickened tailingsReduced storage space requirements Thickened tailings could be considered in the future for optimizing the final design. The storage reduction could be approximately 10% but does not affect the overall alternatives assessment. Paste tailingsReduced storage space requirements No significant benefit in storage or dams. Process and transport costs are prohibitively high for paste tailings for this grade of ore. Limestone BlendingNeutralization of ARD for land disposal of waste rock ARD prevention is not effective, because blending is technically difficult and the limestone quickly loses its effectiveness.

36. Alternatives for Both Tailings and Waste Rock Supplementary Alternatives 1.Upper Attycelley 2.Open Pit/TSF/Site M 3.Duncan Lake Alternative Assessment 1.Site C 2.On-land dump w/treatment, open pit/TSF

37. Alternatives Summary of Risk Points

38. Comparison of Alternatives Risk and Cost ALTERNATIVE Risk PointsCost $ Million Attycelley Creek735625 Open pit/Site M/TSF678995 Duncan Lake417135 Site C1,317775 Open pit/TSF/NE Dump with treatment 1,401325 +

39. Environmental Comparison Criteria Aquatic effects Terrestrial effects Footprint of disturbance ARD prevention Contaminant control Dam stability Closure Sustainability Cost Risk Ability to compensate and mitigate

40. Environmental Comparison

41. Kemess North Area

42. Kemess North Post Closure

43. Alternatives to the Project 1. No Kemess North Project 2. Develop Kemess North Project Developing Kemess North maximizes the use of the resources and infrastructure that already exist. Northgate has a responsibility to exploit the resource in an environmentally safe and profitable manner.

44. Path Forward Underwater Disposal of Potentially Acid Generating Waste Alternative(s) Update Environmental Comparison of Main Alternatives Review Process

45. Geologic Cross-Section