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Exhibit C Phase I Since submitting this conversion application, MDI has provided analysis which demonstrates that the material in the heap leach pad contains toxic levels of cyanide. Please revise the Phase I section of Exhibit C to describe hovv MDI will handle and detoxify this material for final disposal. Based on these analyses, the Division could not approve this conversion to a non - DMO status while the heap pad material remains on-site and toxic. However, a conditional approval might be rendered, requiring detoxification and/or removal of the cyanide laden material by a specified date, before the non-DMO status would take effect. This scenario is entirely dependent upon MDI demonstrating that all other aspects of the operation (tailings storage/disposal, waste rock disposal, ore storage/disposal, processing chemicals and processing solution strengths, storage and handling processes, etc.) do not indicate that the Neglected Mine has any of the characteristics described in the definition of a Designated Mining Operation. Please provide a detailed schematic diagram of the milling facilities with volumes and proposed maximum rates of processing through the system, concentrations of the contents of each container in the process, where in the process that each chemical is added an at what concentration, and the mode of transport from e~ich phase to the next. The location of the chemical storage area should also be indicated with a description of how the chemicals will be kept dry. 3. Please confirm whether or not the proposed production rate will allow processing of the existing ore, on site and above ground, within 180 days. If the ore stockpile cannot be processed and thereby removed from the site within 180 days, please provide analysis documentation that proves this material is not potentially acid and/or toxic producing. Be aware that if the stockpiled ore proves to be potentially toxic or a~~id-forming, and is not or will not be processed within 180 days, the Neglected site will be designated as a DMO. 4. Please indicate how the mill processing facilities pad will deal with water accumulations from precipitation events that may become contaminated by spillage of milling process materials and solutions within the containment pad. Also address how the operation will be winterized to prevent spilling of solutions from freezing and breaking of pipes and tanks. 5. Please be aware that Division policy requires that any liner installation or repair be observed by Division personnel, and must be conducted such that the installation can be certified. 6. Please characterize, as best as possible, the tailings resulting from the milling operation before and after the solidification process in terms of being a toxic or acid-forming material. Please describe, in detail, the tailings solidification process. The Division is concerned about how the process will be conducted without jeopardizing the integrity of the tailings pond liner. Please provide a schematic drawing of this process if it will aid in describing how it will occur. 8. Please provide detailed information regarding the proposed disposal of the solidified tailings. Details should include; location within the workings designated for disposal, how the tails will be kept dry, and where and how the water table has been defined. The Division is concerned that the solidified tailings will be subjected to repeated wetting and drying cycles when stored for disposal in a "dry" slope underground. The repeated wetting and drying process could eventually break down the solidified tailings block, leaving rubble with a higher surface area available for oxidization and higher potential to produce toxic ar acid mine drainage. MDI may wish to consider disposal of the tailings blocks in an area that is submerged, below the water table,