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Ouray Silver Mines Inc. <br /> Technical Revision 15 May 24,2021 <br /> approval to start the mill has been granted by the DRMS the mine will begin to feed ore into the <br /> mill and conduct test operations. The results of sampling will be sent to the DRMS. <br /> 5 Water/Slurry Handling Systems and Environmental Protection <br /> 5.1 Coarse Ore Tunnel, Crusher Gallery, Decline and Mill Tunnel <br /> The water handling system in the crusher gallery,mill tunnel, filter building,and thickener is <br /> complex,but it is illustrated in drawings MF and PI. Water is recycled through the 18,000 gallon <br /> process water tank and the 18,000 gallon tailings tank in the mill filter building. Makeup water is <br /> provided from the coffer dam located in the coarse ore tunnel. Water from the Revenue Tunnel <br /> ditch is mechanically fed to this coffer dam through HDPE pipes using the Revenue Tunnel and <br /> Course Ore Tunnel. Water is then gravity fed from this coffer dam into a metal surge tank of <br /> dimensions 5' wide x 5' high x 10' long, located immediately near the coffer dam. A portion of <br /> the water is then fed to the crusher gallery,where it is used in dust suppression at the jaw <br /> crushers,the rod mill and screens. Water is also pumped up the decline into the mill tunnel <br /> where it is piped to the 18,000 gallon process water tank in the filter building. From this tank, <br /> water is pumped back into the mill tunnel where it is used in the ball mill,the flotation cells and <br /> filtrate tanks. The third outlet from the metal surge tank prior to any interaction with the <br /> crushing,grinding or processing is simply an emergency overflow pipe to the mine ditch located <br /> in the main tunnel. <br /> No water, slurry or other liquids can leave the mill tunnel since it is graded at a 1.0%grade to the <br /> south,away from the portal. Since the length of the tunnel is 288 feet to the electrical room,this <br /> provides sufficient storage of any spillage or pipe rupture, even if the sump pumps failed. The <br /> sumps and Gallagher pumps shown on the Issued for Construction(IFC) drawings are <br /> strategically located so that water buildup on the mill floor is pumped back into the system of <br /> tanks. The mill(and mine)receives line power,but a I Megawatt backup generator may be <br /> located on the surface in case line power is disrupted. Also,in the case of a power failure,no <br /> water would be delivered from the pumps to the mill, so the only water and/or slurry that could <br /> build up would be that which is already in the mill tunnel in the flotation cells and filtrate tanks. <br /> The mill tunnel and the crusher gallery have concrete floors with secondary containment sumps. <br /> In the case of a pipe rupture or tank rupture in the mill,power would be shut off to the pumps so <br /> that no significant water volume could build up in the mill tunnel.As an even greater protection, <br /> if a very large volume of water built up in the mill tunnel, it would spill over into the decline and <br /> flow down to the crusher gallery before coming out the mill portal. There is approximately <br /> 129,0000 gallons of storage in this tunnel that will prevent water from discharging to the surface <br /> through the portal. The sump pumps in the crusher gallery pump water back into the system so <br /> that no discharge occurs. The coarse ore tunnel also drains to the crusher gallery which is the low <br /> point of the entire mill. All sump pumps are on automatic operation. <br /> 5.2 Filter Building <br /> See discussion below on Chemical Handling Systems and Containment. <br /> Page 9 of 12 <br />