The Continental Mine Permit

A PROPOSED MINE IN NEW MEXICO

PREPARED BY ANDREW JANE MATHISEN, AARON LARRY, ANDREW NEILSEN, AND RUSSEL SPAULDING EDITED BY | RUSSEL SPAULDING 1|Page

I: Administrative
1 Executive Summary (Jane) 2 Land Use (Aaron) 2.1 Land Use Planning Analysis 2.2 Post-Mining Land Use (PMLU) 3 Mine Application (Jane) 4 Public Relations (Russ) 4.1 Local Interest Groups and Stakeholders 4.2 Public Outreach

II: Baseline Data and Operational Management Plans

5 Geology and Hydrological Data (Russ) 5.1 Geology 5.2 Hydrology 5.2.1 Watershed and Local Hydrology 5.2.2 Water Source 5.2.3 Precipitation and Climatology 5.2.4 Monitoring 6 Vegetation (Aaron) 6.1 Common Vegetation 6.2 Vegetation Coverage 7 Common WIldlife (Aaron) 7.1 Wildlife Species 7.1.1 Endangered Wildlife Species 7.2 Listed and Sensitive Species 7.3 Grant County Species of Concern 7.4 Endangered Species 7.4.1 Local Animal Species 8 Soils (Russ) 8.1 Baseline Soil Types 8.2 Soil Profiles 8.3 Topsoil Storage 2|Page

9 Cultural Resources (Russ) 9.1 Indian Reservation 9.2 Historical Town of Fierro 9.3 Historic Mining

III: Operational Permits (Jane)

10 TRI Reporting 11 Air Quality Permit 12 Water Discharge Permits 12.1 Permit Section A8 12.2 Permit Section A9 13 Stream Permits 14 Drinking Water Permit 15 Chemical Storage Plan 16 Mine Waste Storage

VI: Site Decommissioning

17 Earthwork and Grading (Jane) 18 Re-vegetation Plans and Seed Mix (Aaron) 18.1 Seeding 18.2 Seed Mix 18.3 Timing 18.4 Protection 18.5 Contingency 19 Reclamation Cost and Bond Cost (Andrew) 20 Bond Release (Russ) 20.1 Mine Life and Waste Rock 20.2 Timing

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Appendix: Maps and Plans (Andrew) Base Maps: Figures 1 (a and b) and 2 Figure 1a: Area Location Map Figure 1b: Base Mine Location Map Figure 1c: Streams, Springs, and Water Bodies Figure 1d: State Locator Map Figure 2: Land Ownership Map Figure 3: Existing Surface Facilities Figure 4: Mine Plan Map Figure 4a: Phasing Map Figure 5a: Reclamation Treatments Phase 1 Existing Structures Figure 5b: Reclamation Treatments Phase 2 Dumps and Tailings Caped and Sealed Figure 5c: Reclamation Treatments Phase 3 Topsoil Figure 5a: Reclamation Treatments Phase 4 Reseeding Figure 6: Any Cross-Sections of the Reclaimed Area Figure 7: Water Rights Figure 8: Soils Map Figure 9: Geology Map

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1 Executive Mine Summary

The Continental Copper Mine will be located approximately 200 miles southwest of Alburquerque, New Mexico, in the Fierro-Hanover mining district. The mine will excavate approximately 6,500 tons of copper ore per day for an annual total of 2,400,000 tons per year. The ore body reserves contain approximately 9,500,000 tons of .86% grade copper and 4,500,000 tons of 2.22% grade copper. The mine will be constructed on both patented and unpatented land. The mine will consist of a single open pit. It will be mined by traditional surface blasting and excavation methods. Two 10-hour shifts will meet the production goals of the mine with a daily four hour maintenance period. After the production phase, reclamation efforts will begin for the open pit, the tailings pond, and the waste pile. These reclamation efforts include recontouring, re-seeding, and hydrologically managing the site until it works with the undisturbed property around it (which includes the wildlife habitats, recreation, and education). The reclamation budget is estimated to be $4,500 per an acre for bonding purposes. The reclamation period is predicted to take five years to meet all state and federal reclamation requirements, as well as social expectations for a modern American mine.

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2 Land Use
2.1 Land Use Planning Analysis
Before mining efforts began, the areas between Hermosa Mountain and Hanover Mountain were filled with wildlife habitats and open graze land. These areas had minimal disturbance to vegetation and wildlife, other than the livestock grazing in the area. The ground coverage of the desert and grassland biome was mostly juniper and desert grasses.

2.2 PostMining Land Use (PMLU)

The land will be returned to its former use for many wildlife habitats. It will also be maintained as an arboretum for endangered species of the southwest. The purpose of this arboretum is to promote biodiversity and education. Once reclaimed, the mine land will be used for recreation activities with trails, picnic areas, and an education center that teaches mining history, local flora, fauna, and sustainability. Partial mining structures will be preserved for the purposes of sustainability education and historical comparisons.

3 Mine Permit
FOR ONLY:
REV.DATE:

MMD

USE

5/18/09 PROJECT NAME:

PERMIT #:

DATE RECEIVED:

DATE APPROVED:

LEAD INSPECTOR:

STATE OF NEW MEXICO ENERGY, MINERALS AND NATURAL RESOURCES DEPARTMENT

Director Mining and Minerals Division 1220 South Saint Francis Drive Santa Fe, New Mexico 87505 6|Page

Telephone: (505) 476-3400

SUBPART 3 MINIMAL IMPACT NEW MINING OPERATIONS PERMIT APPLICATION

The following information is required under the New Mexico Mining Act (Sections 69-36-1 through 69-36-20, NMSA 1978) and associated rules. The Mining and Minerals Division of the Energy, Minerals and Natural Resources Department is the administrative agency through which this application is to be processed. See 304, Minimal Impact New Mining Operations, of the New Mexico Mining Act Rules for all regulations associated with Minimal Impact Mining operations.

Permit Application Requirements: (304.A-C and 601)

A minimal impact new mining operation will not be considered a minimal impact mining operation if it exceeds 10 acres of disturbed land, except that pre-existing roads and reclaimed areas within the permit area will not be counted. Reclaimed, for this purpose means all financial assurance has been released, except the amount held to reestablish vegetation pursuant to 1204.

Permit applications shall be submitted in ample time to have the permit issued before mining operations begin, and operations shall not begin until after the permit is issued.

Six copies of the completed application need to be submitted.

Confidential information needs to be clearly indicated and submitted separately.

Check the "YES" or "NO" box for each of the following characteristics as related to the proposed minimal impact mining operation:

YES

NO

Located in or having a direct surface impact on wetlands, springs, perennial or intermittent streams, lakes, rivers, reservoirs or riparian areas.

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Located in designated critical habitat areas as determined in accordance with the federal Endangered Species Act of 1973 or in areas determined by the Department of Game and Fish likely to result in an adverse impact on an endangered species designated in accordance with the Wildlife Conservation Act, Sections 17-2-37 through 17-2-46 NMSA 1978 or by the State Forestry Division for the Endangered Plants Act, section 75-6-1 NMSA 1978.

X X X

Located in an area designated as Federal Wilderness Area, Wilderness Study Area, Area of Critical Environmental Concern, or an area within the National Wild and Scenic River System. Located in a known cemetery or other burial ground.

Located in an area with cultural resources listed on either the National Register of Historic Places or the State Register of Cultural Properties.

Having or expected to have a direct impact on ground water that has a total dissolved solids concentration of less than 10,000 mg/L, except exploratory drilling intersecting ground water may be performed as a minimal impact operation.

Expected to use or using cyanide, mercury amalgam, heap leaching or dump leaching in its operations.

Expected to result in point or non-point source surface or subsurface releases of acid or other toxic substances from the permit area. Requiring a variance from any part of these Rules as part of the permit application.

IMPORTANT NOTES!

Obtaining a Mining Act permit does not necessarily satisfy the obligation to obtain permits required by other governmental entities. PLEASE FILL IN ALL APPLICABLE INFORMATION AS COMPLETELY AS POSSIBLE. PLEASE PRINT OR TYPE ALL INFORMATION.

1.

OPERATOR INFORMATION (304.D.1)

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LIST PROJECT NAME: Continental Mine

NAME OF APPLICANT Russel Spaulding, Jane Mathisen, Aaron Larry, Andrew Neilsen

ADDRESS:

201 Presidents Cir, Salt Lake City, UT 84112

PHONE #:

555-555-5555

NAME OF OWNER (if different from applicant's name and address):

ADDRESS:

PHONE #:

NAME OF ON-SITE CONTACT OR OPERATOR'S REPRESENTATIVE:

ADDRESS:

PHONE #:

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2.

RIGHT TO ENTER INFORMATION (304.D.1)

A.

Describe or provide evidence for the basis of the applicant's right to enter the property to conduct the mining and reclamation:

B.

List the names and addresses of surface and mineral ownership within the proposed permit area:

1.

Surface Owner(s):

Name

Address

Phone #

2.

Mineral Owner(s):

Name

Address

Phone #

C.

List the author(s), title(s), date(s) and report number(s) of any cultural resource survey report(s) submitted to the agency(ies) or landowner(s) listed above:

3.

MAPS (304.D.2)

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A.

Provide a legal description of the site [Township(s), Range(s) and Section(s)]: See Appendix

B.

Provide a topographic map(s) of at least 1 inch = 2,000 feet (or appropriate for the size of disturbance) showing the areas of land to be disturbed by the proposed mining and reclamation. Identify general area shown on the map(s) by Township, Range and Section(s). If the area to be mined contains the following features, show them on the map(s):

1. Boundary of the proposed permit area with the existing and proposed area of disturbance 2. Previously disturbed areas 3. Perennial, intermittent and ephemeral streams; springs; wetlands; riparian areas; lakes and reservoirs 4. Proposed and existing roads and other access routes 5. Residences 6. Support facilities 7. Cemeteries, burial grounds; cultural resources listed or eligible for listing on either the National Register of Historic Places or the State Register of Cultural Properties 8. Pipelines 9. Oil, gas, water and monitoring wells on and within two miles of the permit area 10. Identify the location of shafts, adits, trenches, ponds, pits, quarries, stockpiles, waste dumps, etc.

4.

ENVIRONMENTAL PERMITS HELD FOR OTHER OPERATIONS (304.D.3)

Provide a list of other environmental permits held for other mining operations within the United States and any violations issued for non-compliance with those permits.

NAMES OR TYPES OF ENVIRONMENTAL PERMITS:

LIST PERMIT VIOLATIONS; NUMBER, TYPE AND ISSUING AGENCY:

5.

MINING DESCRIPTION (304.D.4)

A.

Type of mineral or minerals to be mined: 11 | P a g e

B.

Check the method of proposed mining:

Surface

Underground

C.

Describe the sizes and volumes of the facilities to be used:

Plant Site/Staging Area:

How Many 802

Acreage

Pits or Quarries: How Many 1 Stockpiles: Waste Dumps: How Many 1 How Many 1

Acreage TBD Acreage TBD Acreage TBD

Volume (cu.yds.)

TBD

Volume (cu.yds.) TBD Volume (cu.yds.) TBD

List the following for New Road(s):

Length (ft.)

15,000

Width (ft.)

25

List the following for extension or widening of Existing Road(s):

Length (ft.)

Width (ft.)

Other Disturbances: Type

How Many

Acreage

Volume (cu.yds.)

TOTAL ACREAGE TO BE DISTURBED:

802

Acres

D.

Describe the type of processing that will be conducted on site:

An on-site mill will crush, grind, and process ore and electroplate the resulting metal

E.

Describe the typical equipment to be used for the mining operations:

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CaterpillarHaul Trucks Caterpillar 40 ft Drill Caperpillar Doser Caterpillar Scoop

6.

CHEMICAL USE (304.D.4)

A.

List all chemicals proposed to be used by the mining operation.

Name:

Ammonia; Antimony compounds; Arsenic compounds; Barium compounds; Cadmium compounds; Chlorine; Chromium compounds; Cobalt compounds; Copper compounds; Lead compounds; Manganese compounds; Nickel compounds; Nitrate compounds; Sec-butyl alcohol; Selenium compounds; Sulfuric acid; Zinc compounds; 1,2,4-trimethylbenzene; Lead; N-hexane; Thiourea.

7.

GROUND WATER INFORMATION (304.D.5)

A.

Provide an estimate of depth to ground water and the total dissolved solids (T.D.S.) concentration.

Depth to ground water (ft.)

B.

Describe the source of groundwater information:

C.

Describe any dewatering activities to be conducted during mining operations:

8.

PERFORMANCE STANDARDS (304.D.7)

A.

Provide a general description of how the mining and reclamation will be designed and operated using the most appropriate technology and best management practices:

See:Reclamation

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B.

Provide a general description of how the mining and reclamation will be designed and operated to assure protection of human health and safety, the environment, wildlife, and domestic animals:

See:Reclamation

C.

Provide a general description of how the mining and reclamation will be designed and operated to safeguard the public from unauthorized entry into shafts, adits and tunnels and to prevent falls from highwalls or pit edges:

No shafts, addits, or tunnels will be present. During the mining phase, the pit will be under 24 hr security, and warning signs will be appropriately placed. After reclamation, the highwall will be shallow enough that it can be walked on.

D.

Provide a general description of how the mining and reclamation will be designed and operated so the disturbed area will not contribute suspended solids above background levels, or where applicable the Water Quality Control Commission's standards, to intermittent and perennial streams:

One stream of interest will be rerouted along the site so that it does not become contaminated by mining efforts.

E.

Provide a general description of how the mining and reclamation will be designed and operated to control erosion:

See: Earthwork and Grading

9.

RECLAMATION PLAN (304.D.8)

The operation will be operated and reclaimed to a self-sustaining ecosystem appropriate for the life zone of the surrounding areas following closure unless conflicting with the approved postmining land use.

A.

List adjacent land use other than mining (i.e. grazing): Grazing 14 | P a g e

B.

List the proposed post mining land use (i.e. wildlife): Wildlife habitat and recreation

C.

Describe how reclamation activities will avoid adverse impact to cultural resources:

See: Reclamation

D.

Describe any backfilling and grading operations to be performed after mining:

See: Earthwork and Grading

E.

Describe what mitigation steps will be taken to reconstruct or protect the hydrologic balance of the site after mining:

All waste and tailings will be reclaimed and contained so that they do not leak into the nearby water sources.

F.

Describe how topsoil or topdressing will be salvaged, stockpiled and distributed for the re-establishment of vegetation:

Top-soil will be stockpilied on-site and redistributed during the reconturing phase of reclamation. Topsoil will also be distributed on top of the waste pile and tailings pond.

G.

Describe what kind of seed bed preparation will take place prior to seeding. What soil amendments will be added? Scarification of the seed bed needs to take place. Will this involve discing or ripping?

See: Reclamation

H.

Describe in detail the plant species to be used in the re-establishment of vegetation:

Plant Name:

Rate of application (lb/ac)

See: Reclamation

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I.

Will the seeds be broadcast or drilled into the seed bed?

They will be broadcast

J. K.

Describe the type of mulch material to be applied after seeding and its application rate: What structures will be on the site and how will they be removed or reclaimed? (Buildings, portals, adits, shafts, bore holes, ponds, etc.):

Mining structures will be repurposed for recreation and education

L.

What roads are part of the mine site and how will they be reclaimed? Please provide an estimate of road square footage and explain if reclamation will involve ripping, scarification, backfilling, recontouring, and retopsoiling, etc.:

See: Earthwork and Grading

M.

What will be the time frame for reclamation, (e.g. time of year, during mining, after mining, etc)?

After mining

Proposed reclamation dates: 1/1/ 2021 and 1/1/2026

Begin: 5 2050

/ 5

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10.

OTHER REQUIRED PERMITS FOR THIS OPERATION (304.D.9)

A.

Provide a list of other permits required for the operation and the anticipated schedule for receipt of these.

Permit Name & Issuing Agency receipt

Date or anticipated date of

See Section III: Operational Permits

11.

FINANCIAL ASSURANCE AND PERMIT FEES (304.E & F) A. Provide a financial assurance estimate based on the cost of reclaiming the site by a third party. Include supporting calculations. Operations with less than 2 acres total disturbance are not required to provide financial assurance.

Reclamation costs: Total:

$4500/acre $3,609,000

12.

CERTIFICATION REQUIREMENT (304.J.5) Each application shall be signed and notarized by an applicant for the operation with the following certification made:

I certify that I have personally examined and am familiar with the information submitted herein, and based on my inquiry of those individuals responsible for obtaining the information, I believe the submitted information is true, accurate, and complete. I agree to comply with the requirements of the permit, these Rules, and the Act. Further, I hereby allow the Director to enter the permit area for the purpose of conducting inspections until release of financial assurance.

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Signature of Applicant: Name (typed or print): Title/Position: Date: Signature of Notary:

Notary Seal

4 Public Relations
4.1 Local Interest Groups and Stake Holders
The local groups and stakeholders in the area include: the Alamo Navajo Indian tribe, National Forest Service, Animal Protection Voters, Association of Commerce and Industry of New Mexico, Environment New Mexico, Chamber of Commerce, BLM, the cities of Bayard, Santa Clara, and Hanover. These groups, as well as any other local groups, will be included in the public outreach programs.

4.2 Public Outreach

We will contact the public in order to hear the thoughts and opinions of all the interest groups and stake holders during the permitting process. Meetings will be held with the purpose of educating the public on the importance of what we are doing and why we are doing it. We will take into account their concerns and modify the design or permitting process if it is warranted. Our company will also visit schools to teach students and teachers about the mining industry and how it benefits each of them in their local communities. The focus of these visits will be to clarify how mining can be done in a safe, sustainable, and environmentally friendly manner.

5 Geological and Hydrological Data

5.1 Geology
The copper deposit is a porphyry deposit that was formed during the Laramide orogeny (which was during the Late Cretaceous to Early Tertiary age of about 40 to 80 million years ago). The Laramide mountain formation was generated by the low angle subduction of the Farallon plate, which compressed the region and generated the magmatic related events. The pluton and the deposit formed from this event is primarily granodiorite. The tabular zones contain fine-grained chalcocite along the fractures within the Colorado Formation, which make up our ore deposit.

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5.2 Hydrology 5.2.1 Watershed and Local Hydrology

The watershed in the area feeds into Hanover Creek, which travels along the east side of the mine. The creek has an access road and a rail line that follow it through the property to an existing rail line and mine site just south of our location. The Mantoya Tank reservoir is located one-forth of a mile west of the property. Because the reservoir is positioned on the opposite side of the mountain crest, its watershed does not lie within the mine property. There will be wells put into place on the east side of the reservoir to ensure there is no contamination of the water table from the mine (NRCS).

5.2.2 Water Source

The main water sources for the mine are the Poison Spring and Hanover Creek. The spring is located northwest of the mine, close to the mine dump and Hanover Creek. Poison Spring water feeds into a stream that flows towards the waste dumps through the mine pit, as seen in figure 1c, and will be diverted into Hanover Creek using a piping system to prevent leaking into the mine pit. The spring is allowed to flow unobstructed to ensure no damage is done to the spring itself and to avoid contamination from any of our operations. The stream will be monitored for flow and contaminates weekly to ensure the spring is healthy. This type of monitoring will also be applied to Fierro Spring, which is located on the mine property and heads Hanover Creek. The water from Poison Spring is used by the mine for the processing of ore and for dust control. Hanover Creek supplies the remainder of the water demand just east of the mine pit (NRCS).

5.2.3 Precipitation and Climatology

Precipitation in Grant County averages around 16 centimeters and has a mean snowfall of 11.8 centimeters. Although the precipitation in the area is low, it increases from July to August, which averages about 3 centimeters per month. There is also very little snowfall at the mine, but the surrounding mountains receive snow usually from November until March because of their higher elevation. The runoff totals for the area of rain and snow are low, but generally increase in the months of July and August. The average annual temperature of all the means for the year range from 48 F to 52 F, indicating that warmer temperatures exist in the area of the mine. The maximum temperature for July and August is about 90 F and the lowest temperature is 65 F, which can be seen in the graph below (Storm247). No evidence of landslides have been found in the geologic record or in the historical record for this location. The data for precipitation is summarized in the table below.

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Annual Precipitation
Precipitation Average January February March April May June July August September October November December Annual 1.08 1.13 0.95 0.58 0.39 0.68 3.02 3.06 1.97 1.26 0.71 1.24 16.08 High 3.65 3.82 4.34 2.88 2.38 2.48 8.75 7.40 5.31 4.37 2.73 4.20 24.92 Low 0.00 0.02 0.00 0.00 0.00 0.00 0.46 0.31 0.00 0.00 0.00 0.00 6.77 Total Snowfall Mean 3.3 2.8 1.5 0.7 0.0 0.0 0.0 0.0 0.0 0.0 0.9 2.5 11.8 High 13.9 15.5 6.5 5.5 0.0 0.0 0.0 0.0 0.0 0.0 6.8 15.6 27.0

(http://www.silvercity.org/precipitation.shtml)

5.2.4 Monitoring
Monitoring wells will be placed on the south end of the mine to track the water coming out of the mine site. A berm will also collect the water from the mines waste dumps and treat it for possible sulfide contaminates. These wells will also be used to test the aquifer water for two years to establish a baseline for the contaminate levels in the permitting area. This will insure the mine doesnt affect the water quality beyond the already established limits. Each of the streams in the area will be monitored monthly and Hanover Creek will be monitored daily (with the exception of Poison Spring, which will be monitored weekly as stated above). The area has very little subsurface water primarily because of the grounds low water capacity as well as the atmospheres low precipitation rate. 20 | P a g e

6 Vegetation
For a normal year, total range production is the amount of vegetation that can be expected to grow annually in a well-managed area that is supporting the potential natural plant community. It includes all vegetation, whether or not it is palatable to grazing animals. It includes the current year's growth of leaves, twigs, and fruits of woody plants. It does not include the increase in stem diameter of trees and shrubs. It is expressed in pounds per acre of air-dry vegetation. In a normal year, growing conditions are about average. Yields are adjusted to a common percent of air-dry moisture content. Grant County in New Mexico lies in the Chihuahuan Desert at an elevation above 4,500 feet. This gives the site a milder climate than that of the lower Sonoran Desert. We expect to have a normal year in regards to vegetation production and precipitation in Grant County. The mine will implement concurrent reclamation efforts whenever possible in their process plan. Reseeding will occur in the late fall months of September or October between the heavy monsoon rains and the winter snowfall. Reseeding for the area is indicated in phase map 5d. The contingency plan for reclamation is to monitor the seeding (and reseeding if needed) the following April or May when the snow has melted but before the heat of the summer.

6.1 Common Vegetation

The common vegetation for the area includes: Mesquite, Cactus, Creosote, Valley Cottonwood, Black Grama Grass, Juniper, Cedar Pinon, Willow, Blue Grama Grass, Sagebrush, Ponderosa Pine, Scrub Oak, Aspen, Douglas Fir, Spruce, Siberian Juniper, Engelmann Spruce, numerous types of berries, hardy grasses, and wildflowers.

6.2 Vegetation Coverage

Vegetation surveys have been conducted. Sample plots with dimensions of three feet by three feet were selected and used to determine coverage percentage. Vegetation coverage was taken on the property and determined to be an accurate representative sample. Vegetation coverage as sampled is 35%. Riparian shrubs, vines, and trees are adapted to soil conditions that are wetter than those common in the drier upland areas. The soils suitable for riparians habitat generally occur along flood plains, depressions, bottomlands, and drainage ways adjacent to ephemeral, intermittent, or perennial streams. This biome lies on the outlying mine property where the drainage occurs and along the spring water streams. The main biome on the mine site is more of a riparian desert biome. Grant County, NM

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Common Wildlife
The common wildlife animals includes: jackrabbits, cottontail rabbits, bats, kangaroo rats, roadrunners, squirrels, deer, coyotes, antelope, prairie dogs, mountain lions, bears, mountain bobcats, elk, chipmunks, woodchucks, cony, and mountain sheep.

The Roadrunner

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7.1 Wildlife Species

The wildlife in the area are those that thrive in desert and grassland biomes. There are a number of small streams on the property that provide essential habitats for the local wildlife. There are six endangered species in Grant County, NM. Aside from that, there are 37 species that are of significant concern.

7.1.1 Endangered Wildlife Species

The endangered species include the southwestern willow flycatcher, Gila chub, Gila topminnow, Loach minnow, Spikedace, and the black footed ferret.

7.2 Listed and Sensitive Species in Grant County

Common Name Scientific Name Group Status

Yellow-billed cuckoo Headwater chub Roundtail chub Mexican garter snake Southwestern willow flycatcher

Coccyzus americanus Gila nigra Gila robusta Thamnophis eques Empidonax traillii extimus

Bird Fish Fish Reptile Bird

Candidate Candidate Candidate Candidate Endangered 23 | P a g e

Gila chub Designated Critical Habitat Gila topminnow 3 Loach minnow Spikedace Black-footed ferret 2 Northern aplomado falcon Whooping Crane Gray Wolf (Mexican Gray Wolf) Chiricahua leopard frog Designated Critical Habitat Mexican spotted owl Designated Critical Habitat Beautiful shiner 3 Chihuahua chub Gila trout Strix occidentalis lucida Cyprinella formosa Gila nigrescens Oncorhynchus gilae Bird Fish Fish Fish Threatened Threatened Threatened Threatened Rana chiricahuensis Amphibian Threatened Gila intermedia Poeciliopsis occidentalis Tiaroga cobitis Meda fulgida Mustela nigripes Falco femoralis septentrionalis Grus americana Canis lupus baileyi Fish Fish Fish Fish Mammal Bird Bird Mammal Endangered Endangered Endangered Endangered Endangered Experimental, Non-essential Population Experimental, Non-essential Population Experimental, Non-essential Population

7.3 Grant County Species of Concern Species of Concern are included for planning purposes only.
Common Name Scientific Name Group Status

Lowland leopard frog Desert viceroy butterfly New Mexico silverspot butterfly American peregrine falcon Arctic peregrine falcon

Rana yavapaiensis Limenitis archippus obsoleta Speyeria nokomis nitocris Falco peregrinus anatum Falco peregrinus tundrius

Amphibian Arthropod Invertebrate Arthropod Invertebrate Bird Bird

Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern 24 | P a g e

Baird's sparrow Bells vireo Common black hawk Northern goshawk Northern gray hawk Western burrowing owl Desert sucker Rio Grande sucker Sonora sucker Townsend's big-eared bat Shortneck snaggletooth (snail) Desert night-blooming cereus Dwarf milkweed Parish's alkali grass Pinos Altos flame flower Porsild's starwort San Carlos wild-buckwheat Slender spiderflower Wright's dogweed Narrowhead garter snake

Ammodramus bairdii Vireo bellii Buteogallus anthracinus Accipiter gentilis Buteo nitidus maxima Athene cunicularia hypugaea Catostomus clarki Catostomus plebeius Catostomus insignis Corynorhinus townsendii Gastrocopta dalliana dalliana Cereus greggii var. greggii Asclepias uncialis var. uncialis Puccinellia parishii Talinum humile Stellaria porsildii Eriogonum capillare Cleome multicaulis Adenophyllum wrightii var. wrightii Thamnophis rufipunctatus

Bird Bird Bird Bird Bird Bird Fish Fish Fish Mammal Mollusc - Invertebrate Plant Plant Plant Plant Plant Plant Plant Plant Reptile

Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern Species of Concern

7.4 Endangered Species

After a complete environmental analysis, no endangered plants or animal species were found on the property. In accordance with the Endangered Species Act, a Section 7 consultation will be conducted in conjunction with the Fish and Wildlife Service. This will determine if there are any adverse effects to endangered species.

7.4.1 Local Animals Species

There is a joint effort with the local college to study the wildlife in the area. The college has set up motion detection video cameras that monitor waterways, valleys, and fields. The college and the mine currently monitor numerous birds, deer, coyotes, and three mountain lions. 25 | P a g e

8 Soils
8.1 Baseline Soil Types
The soil located on the mine site is primarily mixed alluvium and colluvium derived from parent metamorphic, sedimentary, and igneous rock. On the mine property, the majority of the area is exposed bedrock. The top soil can be seen along the northeastern part of the property, in the proposed pit area, and along Hanover Creek. The types of soil found on our site include: Encerro, Gaddes, Jonale, and Paymaster. These soils consist of a sandy loam topsoil, a sandy clay intermediate layer, and then bedrock. The summary of the types of soil and rock in the area are seen in the table below, which correlates with map figure 8.

Baseline soil types

Area
13 15 21 40 44 46 60 63

Name
Encierro-rock outcrop Gaddes-Santa Fe-Rock Jonale sandy clay loam Oro-Grande rock Paymaster-Ellicott Pit-Dumps association Santa Fe-Rock Santana-Rock

Elevation (ft)
5500-7000 4000-8000 5000-6000 5700-7000 5000-7000 N/A 5500-8000 5000-7000

Mean annual precipitation (in)

14 to 17 12 to 16 12 to 16 12 to 16 12 to 16 N/A 12 to 16 12 to 16

Soil type
Encierro Gaddes Jonale Oro grande paymaster Rock Santa fe Santana

Drainage class
well-drained well-drained well-drained well-drained well-drained well-drained well-drained well-drained

Frequency Frequency of of Water table flooding ponding depth (in)

none none none none Rare none none none none none none none none Rare none none

Salinity

more than 80 none to strong more than 80 nonsaline more than 80 nonsaline more than 80 nonsaline more than 80 nonsaline more than 80 nonsaline more than 80 nonsaline more than 80 nonsaline

We can see from the table that the area is well drained and has a very small chance of flooding or ponding. The drainage in the area is well defined and will require very little manmade intervention to insure proper drainage. The majority of the rock and soil has low permeability, except in area 44 by Hanover Creek where the soil is underneath the access road and rail line.

8.2 Soil Profiles

The general soil profile in the area is 0 to 2 inches of gravelly sandy loam and then 2 to 22 inches of gravelly, sandy clay loam followed by the bedrock that starts at 22 to 26 inches. The soil profiles according to location can be seen in map figure 8.

8.3 Topsoil Storage

The topsoil where the pit is to be mined will be relocated and stored in a bench style of dump on the east of the mine pit. The dump can be seen in map figure 4. The mine pit, road, and railway will require the topsoil to be moved and stored in this location. The topsoil will be vegetated in October or September in order to preserve it in this location. From each site where the soil is removed, a pedon will be left in order to have an image of what the profile looked like in its original state.

9 Cultural Resources
9.1 Indian Reservation

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The proposed mine site possibly lies within the Alamo Navajo Indian tribe ancestral lands. The tribe has a reservation next to the city of Bayard and may hold some of the proposed property as sacred grounds. The tribe representative has been contacted and we are waiting for a response. From our observations of the property, no ancient or recent Indian artifacts have been found within the proposed mine site.

9.2 Historical Town of Fierro

The historic town of Fierro will be unaffected by mining operations and its traffic. The few homes in the town have been purchased by the mine and will be used by employees. The locals will be allowed access into the town so that they can visit the graveyard that contains about 200 graves. The rail line and access road will be built over 1,500 feet away from the graveyard to preserve the historic area. The area will be monitored during blasting to insure that the vibrations will not damage any of the grave stones.

9.3 Historic Mining

An old mining shaft lies within the property that has been abandoned since the late 1800s. The shaft was once part of a small underground mining operation that primarily mined a high grade copper. The only existing mining structure that remains is the original A-frame. The site has been thoroughly surveyed and no other mines or structures exist within the mine permit area. The mine is located up a canyon just east of the proposed south waste dump. Because the location is approximately 4,000 feet away from the nearest disturbed area, it will be essentially unaffected by mining operations. The location can be seen in map figure 3.

10 TRI Reporting
The TRI (Toxics Release Inventory) is a national database managed by the EPA which contains information on the variety and quantity of toxic material that is handled and disposed of by major production industries in the United States. The TRI was established under the Emergency Planning and Community Right-to-Know Act of 1986. Our mine will be mandated to report toxic releases to the TRI because it will produce more than 25,000 pounds of reportable material in any given year in the form of uneconomic overburden material. For each toxic material, a section 313 TRI Report must be filed using Form R found on the EPAs website. Our mine will need to fill out Form R for each of the following (quantities produced TBD): Ammonia, Antimony compounds, Arsenic compounds, Barium compounds, Cadmium compounds, Chlorine, Chromium compounds, Cobalt compounds, Copper compounds, Lead compounds, Manganese compounds, Nickel compounds, Nitrate compounds, Sec-butyl alcohol, Selenium compounds, Sulfuric acid, Zinc compounds, 1,2,4-trimethylbenzene, Lead, N-hexane, and Thiourea.

11 Air Permit
The Air Quality Bureau (AQB) of the New Mexico Environment Department (NMED), under the authority of Chapter 74, Article 2 NMSA 1978 "Air Quality Control Act," issues air quality Construction and Operating Permits. The AQB administers most Federal Air Programs, which include: New Source Performance Standards (NSPS), National Emission Standards for Hazardous Air Pollutants (NESHAPS) Prevention of significant Deterioration (PSD), Title V Operating Permits, Title III Air Toxics, and Title IV Acid Rain. Since our mine is estimated to release more than 10 short tons of air pollutants in any given year, we will submit a Notice of Intent (NOI) permit to the AQB with the following information: Company Information 27 | P a g e

Facility Name; Operator Information; Ownership information; Mailing information; etc. Facility Status Has the facility already been constructed? (No.) Has this facility been issued an NOI in the past? (No) Etc. Facility Input and Capacity Current hourly, daily, annually (tons of production)? (none) Proposed hourly, daily, annually (tons of production)? ( 325 TPH; 6,500 TPD; 2,372,500 TPY) Location Information See Maps Proposed Operating Schedule 2, 10hr shifts 365 day/year In addition, a NOI report will be submitted with an application that contains the following table of contents:

Table of Contents
Section 1: Section 2: Section 3: Section 4: Section 5: Section 6: Section 7: Section 8: Section 9: Section 10: Section 11: Section 12: Section 13: Section 14: Section 15: Section 16: General Facility Information Tables Application Summary Process Flow Sheet Plot Plan Drawn to Scale All Calculations Information Used to Determine Emissions Map(s) Proof of Public Notice Written Description of the Routine Operations of the Facility Source Determination PSD Applicability Determination for All Sources & Special Requirements for a PSD Application Discussion Demonstrating Compliance with Each Applicable State & Federal Regulation Operational Plan to Mitigate Emissions Alternative Operating Scenarios Air Dispersion Modeling 28 | P a g e

Section 17: Section 18: Section 19: only) Section 20: Section 21: Section 22: Section 23:

Compliance Test History Addendum for Streamline Applications (streamline applications only) Requirements for the Title V (20.2.70 NMAC) Program (Title V applications Other Relevant Information Addendum for Landfill Applications Green House Gas Applicability Certification Page

Our mine will first and foremost utilize the most highly-efficient, low emission haul truck fleet commercially available. Although the mining process should not liberate significant quantities of underground stored gasses, we will still monitor the emitted gases around the shovels to evaluate this claim. Gasses will be released as a result of the drill-and-blast mining method used at the mine. Appropriate mitigation efforts will take place and will be documented.

12 Water Discharge
The Ground Water Quality Bureau (GWQB) of the New Mexico Environment Department is responsible for the issuance of ground water discharge permits. Our mine will submit a ground water discharge permit to the GWQB as a result of our mill tailings pond, waste dump (both of which are lined), and septic tank system. The purpose of this permit process is to prevent ground water pollution, which could result from discharges of effluent or leachate. Discharge permits are required for all discharges of effluent or leachate which may move directly or indirectly into ground water that has an existing concentration of 10,000 mg/l or less of total dissolved solids.

12.1 Permit Section A8: Processing, Treatment, Storage, and Disposal System
We will briefly describe how wastewater, sludge, etc. is processed, treated, stored, and/or disposed of at our facility. The milling process is water-intensive at the mine. In order to maximize recyclability and environmental responsibility with regards to water, the following procedures will take place to process, store, and/or dispose of water: Thickeners will remove 80% of the water from the slurry, which exits the grinding and sorting circuit. Additional water will be removed by a filter and drum presses until the slurry becomes mineral cake. The removed water will be filtered through an on-site water treatment plant and recycled as much as possible to limit the total quantity of water affected. When water is no longer recyclable, treated water will be tested for contents which might make it nondischargeable. All clean water will be discharged according to appropriate regulations. If water is found which cannot be discharged, it will be shipped to a contracted water treatment facility for additional treatment.

12.2 Permit Section A9: Discharge Locations

Water that is found to be legally dischargeable, but not recyclable, will be emptied into a designated drainage site, which will be constantly monitored. In addition, some water will be discharged into the 29 | P a g e

tailings pond from the mill. This pond will be lined with a layer of clay, rock, sand, and a plastic liner so that the contaminated water cannot precipitate into ground water. The septic tank will be regularly emptied and monitored for leaks.

13 Stream Permit
The New Mexico Environmental Department's Surface Water Quality Bureau (NMED-SWQB) issues conditional certification to work in arroyos, rivers, streams, or wetlands, according to the United States Army Corps of Engineers (USACE) permit Section 10 of the Rivers and Harbors Act and/or Section 404 of the Clean Water Act. The mine will obtain the appropriate permit in order to carry out the following project: The site designated for the tailings pond of the mine is above a small stream that runs across the mine site. In an effort to prevent water contamination, the mine will reroute the stream outside of the boundaries of the tailings pond, mine pit, and waste pile. During the reclamation phase of the mine life, this new route for the stream will remain to prevent wear into the caps of the waste structures. The stream movement will be monitored in collaboration with the Hydrology Department at the New Mexico Tech Science and Engineering Research University and the Wildlife Biology Department at the University of New Mexico. It has been determined that the streams movement will not negatively affect any endangered or threatened species. Permission for the stream movement has been obtained by all local property owners. Consultations and agreements have also been conducted with nearby Indian tribes that have special interest in the land.

14 Clean Drinking Water

The Environmental Improvement Board promulgates the Drinking Water Regulations. The New Mexico Environment Department (NMED) has the responsibility for enforcing the regulations under the authority of the Environmental Improvement Act and the Federal Safe Drinking Water. The mine will submit an application for the approval of construction of a new public water supply system or modification of an existing public water supply system. The mine will build into the local public water system (PWS) # NM3580009, which principally serves other nearby mines in Grant County. Listed below are the primary contacts for the system, which will be listed in the permit: Name
CROTTS, LARRY

Job Title

Type
DO

Phone

Address

Email
DRAGONFLYENTLARRY@GMAIL.COM

PO BOX 85, 575-574-4889 HANOVER, NM-88041 575-912-5906 PO BOX 10, BAYARD, NM-88023 PO BOX 10, BAYARD, NM-88023

MOON, RICHIE

OP

Not Available

TAYLOR, BRUCE

AC

575-912-5907

Not Available

The new build-in system will be large enough to support twenty-five employees with their on-site water needs including cooking, bathing, and drinking. 30 | P a g e

15 Chemical Storage
The New Mexico Environment Department (NMED) is responsible for the regulation of hazardous waste. The Hazardous Waste Bureau receives its statutory authority from the New Mexico Hazardous Waste Act (NMSA 1978, 74-4-1 et seq.) as a state authorized program to implement the federal program, from the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act (RCRA), as amended (42 U.S.C. 6901 et seq.). The mine will submit a Hazardous Waste Permit (treatment, storage, and disposal) to the NMED. The waste which will be handled by the mine includes (but are not be limited to): Ammonia; Antimony compounds; Arsenic compounds; Barium compounds; Cadmium compounds; Chlorine; Chromium compounds; Cobalt compounds; Copper compounds; Lead compounds; Manganese compounds; Nickel compounds; Nitrate compounds; Sec-butyl alcohol; Selenium compounds; Sulfuric acid; Zinc compounds; 1,2,4-trimethylbenzene; Lead; N-hexane; Thiourea. Because the majority of the hazardous waste is the result of waste rock, it will be managed in the mines lined waste piles and dumps. These will be capped off during the reclamation phase of the mine. Nonwaste rock based hazardous materials will be handled appropriately during their use to prevent mine site contamination. At the end of their use, they will be hauled out and managed by a permitted hazardous waste contractor. The permit application will include the following information: General description of the facility Chemical and physical analyses of the hazardous waste and hazardous debris to be handled Waste analysis plan Security procedures Required equipment Inspection schedule Contingency plan Description of procedures, structures, and equipment used Description of precautions to prevent accidents Traffic patterns and volumes Facility location information regarding seismic standards, faults, floodplain Training programs Closure plan Closure and post-closure cost estimates Liability Proof of financial coverage Facility-specific topographic map Ground water monitoring data Identification of the uppermost aquifer and parameters Ground water monitoring program Specific information requirements for hazardous waste management units (containers, tank systems, surface impoundments, waste piles, incinerators, land treatment facilities, landfills, etc.)

16 Mine Waste Storage

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Tailings and mine waste will be managed in an environmentally responsible manner according to industry standards. Prior to the beginning of production, both the mine dump pile site and the mine tailings pond will be constructed. Because a portion of the mine site falls on National Forest Service land (as seen in Figure 2), all plans regarding the location of mine dumps and tailing ponds have been carefully considered with the collaboration of the National Forest Service. The mine tailing sites will have a layered system of ground water seepage prevention. This system consists of a bottom-most liner, a layer of non-permeable clay, and a layer of rock for filtration and drainage. No liner will be placed below the mine waste dumps, as the weight of the haul trucks on the mine dump would render it ineffective. Instead, a water drainage collection system has been put into place to treat any contaminated water. At the conclusion of mining, a top liner will be situated over the waste dumps and tailings pond. Both systems will be capped using the layered system consisting of a liner, clay, rock and lastly a layer of top soil. The returned top soil will be roughened and re-vegetated to prevent erosion that could expose the waste pile. In addition to erosion control, the vegetation should absorb much of the rainfall before it can reach the liner to prevent acid rock drainage.

17 Earthwork and Grading

The reclamation goals of the open pit portion of the mine consists of: Slope restoration to ensure the highwalls are stable and rounded (rather than linear) so that features appear natural instead of manmade Preservation and restoration of the topsoil Final topography with rolling mounds, hills, sinuous contours, chutes, buttresses, and spurs that blend in with adjacent topography Effective re-vegetation with multi-species ground cover and trees Water and erosion control as it pertains to reclamation

These goals will be reached through the following methods: A combination of blasting and machine re-contouring will decrease the angle of the slopes. These recontouring efforts will not be entirely homogenous. The final slope will vary across the pit, so that natural runoff streams are formed. See figure 5a for affected area. Top soil will be removed from the surface of the pit and stored for the duration of the mine operations. Figure 4 displays the area allocated for top soil storage. When the mining portion of the mine life is complete and the slopes have been rounded, topsoil will be reintroduced to the new surface. Topsoil will be spread in the area as shown by figure 5c in the Appendix. This topsoil will be roughened prior to reseeding, so that it is similar in appearance to naturally eroded slopes. Vegetation will be reintroduced on the newly placed topsoil so that the root systems will lock-in with the topsoil to prevent mass erosion and exposure of waste rock. Figure 5d shows the area of the mine site that will be reseeded. The bottom of the pit will be lined with a manmade liner that consists of a layer of clay and rocks on top. In order to prevent the pit from filling with water, a waterway will be drilled from the bottom of the pit horizontally towards a nearby stream. Figure 5c of the Appendix shows the proposed waterway. This will allow the pit to properly drain with the small quantity of precipitation received by the area annually. The waste pile will be re-contoured, so that it is structurally stable and has sufficient drainage paths across the surface. A liner will cover the waste pile that consists of a layer of clay, rocks, and topsoil to 32 | P a g e

serve as a cap to prevent acid rock drainage. The cross section of the waste dump caps can be seen below in figure 6. The tailings pond will be similarly capped to prevent water contamination. Figure 5b shows the location of the mine waste dumps and tailings ponds included in the reclamation plan.

18 Re-Vegetation Plans and Seed Mix

18.1 Seeding
The disturbed area in the mine to be reseeded will use a mix of naturally occurring vegetation. Certain areas are planned for re-vegetation with plants that are a species of concern. Ripping, roughening and contouring of the reclaimed mine site will commence after the operation facilities have been dismantled and removed. Rock will be added to match the landscape and add diversity. The toxic areas will be dried and covered with one foot of subsoil and half a foot of topsoil.

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Seeds
Species Creosote Black Grama Grass Juniper Cedar Pinon Blue Grama Grass S agebrush S crub Oak Total lbs/acre 0.25 1 0.25 0.25 1 0.5 0.25 3.5

18.2 Seed Mix

The seed mix has been determined and formulated with the joint effort of the University of New Mexico and a reputable vendor. Information about germination date, crop weed seed contaminants, and seed elevation will be decided. Mixtures with contaminants greater than 0.5% will not be accepted. During reseeding, there will be no transplanting, mulch, fertilizers, or irrigation.

18.3 Timing
As stated in section 6, the seeding will be done in the late fall months of September or October. These months follow the heavy monsoon rains of June and July, thus providing a wet soil suitable to plant. Although lesser temperatures typically accompany this time of year, these months still meet the minimal precipitation.

18.4 Protection
In order to protect the re-vegetation process, a chain link fence will surround the disturbed area. It is estimated that the reseeding will take three years for the root systems to be established to enable wildlife grazing.

18.5 Contingency
The area of re-vegetation will be systematically monitored to ensure the reclamation proceeds according to plan. The timespan of heavy rain, hot sprees, frost, and other severe weather should be monitored. A time frame of two to five years will be allowed for success. If the seed mix does not take or fails to produce appropriate coverage, professionals will be consulted to determine a better mix. Transplants in riparian areas or possible irrigation will be reconsidered at that time.

19 Reclamation Cost and Bond Cost

Compared to an underground mine, reclamation for a surface mine is much more expensive. It is estimated that our reclamation costs will be around $4,500 per an acre. The total disturbed area is approximately 802 acres, resulting in a reclamation cost of $3,609,000. Another 10% is added to this cost in order to compensate for inflation or other problems that are unseen and another 10% is added to compensate the local university to monitor the land after reclamation. This brings the total reclamation cost to $4,366,890.
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20 Bond Release
20.1 Mine Life and Waste Rock
The total tonnage of waste rock predicted during the 11 years of mine life will be approximately 84 million tons. The waste dump on the north side will be filled first with an expected six year fill life and 40 million ton capacity. The dumps on the south side will be filled in the remaining five years of the mine life. The southwest dump has a 25 million ton capacity and the southeast dump has a 19 million ton capacity.

20.2 Timing
The north waste dump will be reclaimed after six years by capping. The capping of the north dump will take approximately one year to complete. The re-vegetation and seeding of the area will take an estimated three years to establish. The lower two dumps will be capped after the mining is complete at the end of the eleventh year. These dumps will also take one year to cap and three years to vegetate through a seeding regimen. By the twelfth year, the liner system used for the tailings pond will be caped on the surface, taking about six months to complete. The mine pit will be re-contoured and prepared for permanent drainage that same year. A drainage pipe will be drilled and sleeved from the mine pit to a nearby stream in a horizontal direction. The pit will then be capped with a liner and rock, which will take one year to complete. The bond is set to be released by the seventeenth year of the mine life, around 2032.

References
Mclemore, Virginia. 2008. Potential for Laramide Porphyry Copper Deposits in Southwestern New Mexico. New Mexico Bureau of Geology and Mineral Resources, New Mexico Tech, Socorro, NM 87801. http://www.nmenv.state.nm.us/wqcc/documents/ExhibitLande-02.pdf NRCS. Web Soil Survey application. April 9, 2013. http://websoilsurvey.nrcs.usda.gov/app/WebSoilSurvey.aspx Silver City Chamber of Commerce. http://www.silvercity.org/precipitation.shtml U.S. Fish and Wildlife Services. Species Reports. http://ecos.fws.gov/tess_public/pub/stateListingAndOccurrenceIndividual.jsp?state=NM&s8fid= 112761032792&s8fid=112762573902 Storm247. StormGeo. Houston, Texas. http://www.storm247.com/weather/116910346/climateProject

Vote Smart. New Mexico Special Interest Groups. http://votesmart.org/interestgroups/NM/#.UXdjQLWfh3U

USACE permit (Section 10 of the Rivers and Harbors Act and/or Section 404*****

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