2021-06-14_REVISION - M2012032 (3)

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Ouray Silver Mines Inc. Technical Revision 15 May 24,2021 treatment facility. After the mill process has been refined during commissioning and actual water chemistry is known,then a zero-discharge water treatment facility will be installed in the mill. 4 Mill Construction, Modifications, and Test Operation In 2017, elements of the mill were redesigned by Barr Engineering. Figure 1 illustrates what components of the mill were modified. Mill upgrades include improvements to the crushing, milling,and flotation circuits as well as the filtration plant,as discussed below.No changes in environmental controls were proposed with the exception of the reagent room addition to the mill filter building which is being designated as an EPF under TR-14. The crushing circuit improvements approved under TR-09 include removal of the existing secondary crusher and screening equipment;the equipment will be replaced with a small Rod mill and secondary Jaw crusher. The rod mill slurry will flow to two 12,690-gallon storage tank before being transferred by two slurry pumps to the mill circuit. The mill will start without the 12,690 gallon slurry storage tanks All equipment will be in the existing crusher gallery underground.The crushing gallery is the low point in the mill and any spill will be captured by sumps. These sumps will return spilled material back into the mill circuit. Milling circuit improvements approved in TR-09 also include the removal of the existing cyclone circuit and replacing it with two Derrick screens for increased efficiency. Materials leaving the milling circuit will enter the flotation circuit. Within the flotation circuit,the following changes were approved under TR-09 to facilitate ore recovery. Addition of another conditioning tank to the Zn flotation circuit,rougher flotation tank cells(with air blowers)to the bulk Pb and Zn circuits,and two additional cleaner flotation tank cells for the lead circuit. Pb and Zn concentrate thickeners will be added along with an overflow tank;the overflow from the thickeners reports back to the process.New reagent tanks, pump boxes and pumps will be added to support the new Pb and Zn flotation circuits. Sizes of the tanks and the volume of their secondary containments are listed in Table 2. Both the milling circuit and the flotation circuit are located inside of the mill tunnel,which is graded at a 1.0%grade to the south, away from the portal. Since the length of the tunnel is 288 feet to the electrical room,this provides more than sufficient storage of any spillage or pipe rupture,even if the sump pumps failed. Reagents utilized and the amount used per ton in throughout the flotation circuit are presented in Table 3,with safety data sheets(SDS) in Appendix 2. These reagents were approved in TR-09, with additional information presented in TR-14. Reagents will be stored in the reagent building as proposed in TR-09,with an EPF certification pending in TR-14. The original reagent distribution systems are being replaced with systems utilizing Clarkson feeders and dosing pumps with head tanks. Two new compressors, dryers and receivers will supply fresh air to the plant and mill. The current compressors will be dedicated to underground air supply. The mill is currently being reconstructed by Western Refractory. Once construction has been completed,as-built drawings and photos of the mill will be sent to the DRMS. Once conditional Page 8 of 12