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Privileged and Confidential—Attorney Client Communication Ge o s tec 4 <br /> consultants <br /> 1. INTRODUCTION <br /> 1.1 Overview <br /> Ouray Silver Mines Inc. (OSMI) is in the process of designing and constructing an <br /> upgraded passive hybrid water treatment system for the Revenue-Virginius Silver Mine <br /> (Mine)to treat water from the Mine portal prior to discharge to Sneffels Creek. The <br /> portal water is currently collected from various underground locations and is being <br /> transported via pipeline to a settling pond, after which the water can be either <br /> discharged to Sneffels Creek at Outfall 001A or infiltrated into groundwater that flows <br /> to a bioreactor system(Pond#2). The portal water contains constituents that are above <br /> current Colorado Discharge Permit System(CDPS) discharge limits for the Mine. The <br /> new passive hybrid water treatment approach has been selected due to the remote <br /> location of the Mine, low concentrations of metals in the Mine water, reduced <br /> brine/sludge transport and storage benefits compared to a traditional ex-situ water <br /> treatment system, aesthetics, ability to function into closure with low cost, and Colorado <br /> Department of Public Health and Environment(CDPHE)interpreted point source <br /> discharge exiting the mine portal in accordance with a compliance order on consent <br /> resulting from past water quality violations. <br /> The upgraded treatment system is intended to expand the existing passive treatment <br /> system's capability to achieve compliance with surface water discharge limits identified <br /> in the CDPS Permit No. CO-0000003, Permit Modification 4. Specifically, the system <br /> upgrades will expand the system from a three to five stage system and enhance the <br /> ability to handle high-water flow conditions that may be experienced during spring run- <br /> off. The objectives of this Treatability Testing Report(Report)are to summarize results <br /> from bench- and pilot-scale treatability testing that was performed March through <br /> September 2018 and to provide recommendations for the design of the full-scale <br /> system. <br /> 1.2 Mine Background <br /> The Mine is an underground silver mine located approximately 10 miles southwest of <br /> Ouray, Colorado and is currently in the process of restarting. It is in a remote, high <br /> altitude environment, which results in cold temperatures, avalanche danger, <br /> accessibility difficulties during inclement weather, and a constrained site footprint. The <br /> area surrounding the Mine is used extensively for recreation, and tourism is one of the <br /> main industries in the area. The Mine water is characterized by cold temperatures, <br /> variable hardness, and highly variable seasonal groundwater and surface water flows, <br /> which are important considerations for passive treatment system design and operation. <br /> Passive treatment is a practical option for the Mine for the following reasons: <br /> Treatability Testing Report 1 December 11,2018 <br />