2016-08-13_PERMIT FILE - P2016020 (2)

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5. The Water Tunnel Permit authorizes London Mine, LLC to discharge treated wastewater from the Water Tunnel Facility through the outfalt associated with the sedimentation pond (Outfall 001A) and into South Mosquito Creek. 6. Acid mine drainage from the London Mine has also historically emanated from the London Mine via the Extension Tunnel. Wastewater from the Extension Tunnel is conveyed to a mechanical wastewater treatment plant (the "Extension Tunnel Facility"). The Extension Tunnel Facility's wastewater treatment process is comprised of four main unit processes: a system inside the Extension Tunnel adit that collects raw water from the Extension Tunnel; chemical precipitation; sedimentation; and effluent pH control. The Extension Tunnel adit includes a partial bulkhead constructed to impound Extension Tunnel flows and has a relief valve at the bottom and a collection pipe two feet above the floor of the mine. The relief valve regulates influent flow to the downstream processes and flushes sediments that accumulate behind the partial bulkhead into the settling pond outside of the adit. Water flows out of the Extension Tunnel into a piping system where time is added to the water flowing in the pipe thereby raising the pH. The time/water mixture then flows into several settling tanks where residual time and precipitated metals settle out. Overflow from the settling tanks flows through an acid feed pump that lowers effluent pH prior to discharging to No Name Creek through a 2-inch Parshall flume. The Extension Tunnel Facility is the subject of the Colorado Discharge Permit System, Permit No. CO-0045209 (the "Extension Tunnel Permit"). The Extension Tunnel Permit became effective on February 1, 2006 and expired on January 31, 2011 and has subsequently been administratively extended, pending permit reissuance. The Extension Tunnel Discharge Permit is held by PCMD #9, as assignee from THF, pursuant to the terms and conditions of the 2004 Stipulation. 7. The Extension Tunnel Permit authorizes PCMD #9 to discharge treated wastewater from the Extension Tunnel Facility through Outfall 001A and into No Name Creek, a tributary to South Mosquito Creek. 8. By the terms of a Purchase and Sate Agreement executed or to be executed in July or August 2016 by and among London Mine, LLC, MineWater and others, London Mine, LLC and the Estate will convey all rights and interests in the London Mine itself to MineWater. The Estate will also convey all conditional water rights associated with or otherwise arising from the London Mine to THF. Upon closing, THF will then own all the conditional water rights currently held by the Estate and MineWater will own the London Mine and the mineral interests associated with the same, subject to the terms of additional agreements between THF and MineWater. 9. The Purchase and Sale Agreement referenced above in paragraph 8, and other agreements between MineWater and THF and/or PCMD #9, contemplate transfer of the Extension Tunnel Discharge Permit to MineWater at closing. 10. MineWater is a party to the Purchase and Sale Agreement, as well as other associated agreements, that authorizes, but does not require, MineWater to accept transfer of both the Water Tunnel Permit and the Extension Tunnel Permit. Upon closing of said Purchase and Sale Agreement, the Division will simultaneously approve transfer of said permits to MineWater, subject to the terms of this Consent Order and Settlement Agreement. 11. This Consent Order and Settlement Agreement is intended to resolve all prior water discharge violations, whether alleged or unalleged, associated with the London Mine and create a framework for treatment and compliance of future water discharges from the London Mine upon closing of the Purchase and Sale Agreement transaction among the applicable Parties. London Mine, LLC, et at. C O L O R A D O Compliance Order on Consent and Settlement Agreement JETDepartment or Public Page 3 of 23 Health 6 EnvUo=ent