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<br />Daub & Associates, Inc. Page 3-3 2015 NS Mine Plan Modification <br />1/5/2016 Section 3 General Site Conditions <br />to expand the Mine Plan and revise the Environmental Monitoring Program (EMP). <br />The revised Mine Plan included an increase of commercial-scale production to <br />250,000 tons per year (tpy). The Mine Plan expansion and EMP revisions were <br />approved on September 7, 2010. Amendment 03 to Permit No. M-1983-194 was <br />submitted at the request of the DRMS. Amendment 03 changed the NS regular <br />mining permit (112) to a Designated Mining Operation (DMO) type permit (112d3). <br />Amendment 03 was approved by the DRMS on July 16, 2012. <br />Prior to plant construction, an Environmental Impact Statement (EIS) was <br />assembled by the BLM. The EIS analyzed and defined potential environmental and <br />socioeconomic effects of operational plans with three alternative production levels <br />of: 50,000 tpy, 125,000 tpy, and 500,000 tpy. A no action (pilot project) alternative <br />was also analyzed. Planned plant capacity for design purposes was 500,000 tons <br />per year of sodium bicarbonate. The operational plan called for the plant to be <br />constructed and expanded in phases or modules with each module representing a <br />production increase of 125,000 tpy or more. Phase I (125,000 tpy production <br />capacity) construction was completed in January, 1991. Phase 2 plant expansion <br />was completed in April 2013, and brought production capacity to approximately <br />250,000 tpy. NS is now in a strategic position to increase production capacity to the <br />next level of 500,000 tpy. <br />The mine is located near the depositional center of the Piceance Creek Basin, which <br />contains bedded and disseminated saline minerals and oil shale. NS currently <br />recovers nahcolite by in-situ solution mining the Boies Bed, a deposit located in the <br />upper portion of the Saline Zone. The Boies Bed is located between the Dissolution <br />Surface and the top of the R-5 oil shale zone. NS is continuing to evaluate the <br />potential viability of solution mining bedded and disseminated nahcolite in the lower <br />portion of the Saline Zone. <br />Hot, unsaturated (barren) brine dissolves the nahcolite as it circulates through the <br />Boies Bed stratiform interval. The saturated (pregnant) nahcolite solution is <br />recovered from the cavity and routed to the process plant via a surface pipeline. An