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Ouray Silver Mines Inc. <br /> Technical Revision 09 February 1,2017 <br /> Propane Sheds <br /> It is proposed that three structures be built to cover onsite propane tanks in the following <br /> locations: <br /> • Southwest of the Administration Building, <br /> • Buried Tanks for the Portal Heater southeast of the Administration Building <br /> • Northeast of the Mill Building <br /> The propane sheds will eliminate snow accumulation on top of the propane tanks, improving <br /> safety and operational efficiency by protecting the tanks and easing the snow removal before <br /> required maintenance or inspection work. Like the Laydown Storage Area,these sheds are not <br /> included in the square footage estimate, as the sheds have no foundation and are only proposed <br /> to facilitate winter operations. <br /> Administration Building <br /> The Administration Building will be an expansion of the current dry building. The current <br /> Administration Building serves as a change house with lavatories and lockers for miners (the <br /> dry)and offices. <br /> Switch Yard Building <br /> The proposed expansion of roofing the will become the switch yard building entails covering the <br /> existing battery building, switch yard and the mine locomotive charging and fueling area, and <br /> include bulk materials covered storage. Covering the rail tracks will prevent icing and damage <br /> from snowfall and major storm events therefore easing maintenance on locomotives and costly <br /> track repairs <br /> 3.5 Sale of Waste Rock and Tailings Blend <br /> The Mine is currently permitted to sell waste rock as aggregate and has an agreement with Ouray <br /> County,who uses the material in road maintenance,particularly on CR 361. However,waste <br /> rock alone lacks sufficient fine material,which acts as a binder to stabilize the larger gravel <br /> grains. Given the inert nature of Revenue tailings(Section 4.3), addition of tailings to the waste <br /> rock would result in a better road base without contributing to water quality degradation. In <br /> addition to providing higher quality road base,the removal of inert products from the Mine site <br /> will fulfill demands for aggregate, and ease storage constraints on Mine operations. <br /> While the mill demonstrated an ability to produce inert tailings in during commissioning <br /> (Section 4.3), the mill improvements discussed in section 2 are expected to remove more sulfides <br /> than the previous mill, leading to even less reactive tailings. Once the mill improvements are <br /> complete and the mill is in operation, OSMI will take samples of mill tailings to waste rock <br /> blended in varying proportions to determine what blend is the most desirable while remaining <br /> inert under Permit standards. <br /> 4 Physiochemical Characteristics <br /> This section will provide a brief overview of the pertinent physical and chemical characteristics <br /> associated with each proposed change. <br /> Page 6 of 14 <br />