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Ouray Silver Mines Inc. <br /> Technical Revision 15 May 24,2021 <br /> 2 Background Information <br /> The Mine, owned and operated by Ouray Silver Mines Inc. (OSMI), is an active silver mine <br /> located approximately 6 miles south west of Ouray Colorado along County Road 26. The Mine is <br /> currently permitted to operate under Amendment 1 to DRMS designated mining operations <br /> (DMO)permit(Section 112-d) M-2012-032. The current mill at the Revenue-Virginius Mine <br /> was commissioned in 2015 and certified by the DRMS on January 1 Ph,2016 to process 400 tons <br /> per day. On April 91h°2021,the mine received formal notification of mill de-certification from <br /> the DRMS due to reconfiguration and modification to the mill equipment permitted in TR-09. <br /> Several Technical Revisions(TRs)to Amendment 1 of M-2012-032 have been filed over the <br /> recent years. These revisions, summarized below, have focused on improved mill functioning, <br /> waste reduction, and improved environmental protocols. Recent TRs are summarized below. <br /> TR-14—Ongoing. Certification of the new mill filter building extension which will house <br /> reagent chemicals (permitted under TR-09)to be designated as an Environmental Protection <br /> Facility(EPF) for control and containment of designated chemicals used as reagents in the <br /> milling process. <br /> TR-13 —Officially withdrawn. Building modifications and bond update that were proposed <br /> under this TR will be addressed by Amendment 2. <br /> TR-12- Ongoing. Characterization and monitoring of hydrocarbons found in GW-4. Allows for <br /> the abandonment of GW-4. <br /> TR-I I- Updated the water monitoring program. Allowed placement of Pilot Passive Water <br /> Treatment Materials withing permit boundary. Updated reclamation plan to incorporate Waste <br /> Storage Pad and address minor modifications to topsoil placement. <br /> TR10- Allowed the construction of the five-stage passive treatment system with discharge to <br /> surface water as permitted through CDPHE(CO-0000003 Modification 5) <br /> TR09—Updated groundwater standards, allowed the sale of mixed tailings and waste rock as <br /> road base. Allowed changes to the mill circuit, the relocation of buildings, and construction of <br /> two additional storage areas. <br /> TR08—Allowed for infiltration of mine discharge to groundwater following passive treatment in <br /> a sulfate reducing bioreactor. <br /> 3 Mill Design Discussion <br /> The Revenue Mill is designed as an underground mill with a 540 ton per day of ore capacity. The <br /> Mill area excavations (four tunnels that constitute the mill complex)were performed under <br /> previous operators. The areas are a)the mine car unloading tunnel and coarse ore bin with <br /> slusher b)the crushing gallery with conveyor leading to the mill tunnel(fine ore bin incline), c) <br /> the mill tunnel which contains two flotation circuits (lead and zinc) and leads to the filter <br /> Page 4 of 12 <br />