2021-06-14_REVISION - M2012032 (3)

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Ouray Silver Mines Inc. Technical Revision 15 May 24,2021 both piles would be stable and have an adequate safety factor as long as the proper compaction were achieved when the material was placed in the piles. This compaction requirement was 94% of the maximum dry density,as determined using ASTM D-698. The results of the 2015 slope stability analysis are presented in Appendix 3. The geotechnical work on tailings stability will be updated(once conditional approval is granted)with data from the tails generated by the upgraded mill to demonstrate stability of the TSFs. In 2017, feasibility-level metallurgical studies were conducted by FLSmidth. This program was conducted on variability composites that represented spatial and grade variations within the Virginius Main Vein,the Footwall Vein and the Yellow Rose Vein, as well as a master composite the was formulated to represent the weighted average contribution from these veins during the first five years of mining. Multi-element analyses were conducted on the final lead concentrate,zinc concentrate, and flotation tailings produced from Locked-cycle tests on the master composite and the results are presented in Table 5. A weighted tailings composite sample from the last 3 cycles was submitted for acid-base accounting(ABA)determination by McClelland Labs in Reno,Nevada and the results are summarized in Table 6. It was found that the flotation tailings had an acid generating potential(AGP)of 38.1 and an acid neutralizing potential(ANP)of 89.4,resulting in a net neutralizing potential(NNP)of 51.3 and an ANP/ANP ratio of 2.35. These results indicate that the flotation tailings are not acid generating. Ouray Silver Mines installed groundwater monitoring wells at the toe of the designated tailings embankments along Sneffels Creek as part of the approved DRMS permit. The groundwater that passes through the Revenue and Atlas waste pile areas is properly intercepted by the wells GW- 1,GW-2,and GW- 3. Each well location represents a pair of wells that are used to compare the water that might pass through any tailings with the water that is present in the porous rock below the original topsoil level. The (A)well in each location represents the background water,while the(B)well represents water that may have passed through the tailings. Well GW-3A was replaced b well GW-3R TR-10 to assist monitoring Pond#2. All wells were initially sampled P Y ( ) g Y p to establish a baseline. GW-IA and GE-1B were not sampled from August 2015 through August 2019 with DRMS permission because there had development there. Currently, all the wells are purged and sampled at least quarterly,with additional samples being taken as desired. The last 5 ears of water quality data can be found in Appendix 4. Y q tY pp Page 12 of 12