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Mr. Steve Shuey March 16, 1998 2 The water quality of seepage from the adit has improved significantly since removal of sulfide bearing waste rock material from the adit during re-opening activities. This material was placed behind the old bulkhead seal prior to initial adit closure. The presence of this material combined with ponding of water in the adit is believed to have resulted in the low pH observed in the seepage water. Initial seepage from the adit was around pH 3. The water quality improved after removal of the waste material as evident by the increase in pH from pH 3 to about pH 6.5. Figure 1 shows the changes in pH that have occurred since re- opening of the adit and removal of the original bulkhead seal and waste material which was placed behind the bulkhead. Given these conditions, the objective of the adit plug is to force shallow seepage back out into the Creede Formation rather than allowing it to preferentially flow out the portal. Since the source of the water is the Creede Formation, this will provide along-term solution to adit seepage that closely reproduces the natural conditions that existed before mining. That is, water originating from the Creede will continue to flow in this formation. Since the Creede Formation is non-mineralized, the water entering the adit and then flowing back into the Creede Formation will be relatively unaffected by the mine. The current near neutral pH of adit seepage supports this conclusion. The natural discharge point for groundwater flowing in the Creede Formation is unknown. However, it is possible that discharge from the Creede Formation into Windy Gulch occurred naturally on a seasonal basis before the mine was constructed. Once the adit plug is installed, the natural flow system may be re-established and there may be some discharge from the Creede Formation into Windy Gulch during spring and early summer. As supported by the water quality data from the current adit seepage, the quality of such water in the Creede Formation should be relatively good and should not be affected by the presence of the adit or adit seal. In order to confirm that the adit seal does not have a negative impact on the quality of potential ephemeral or intermittent flows in Windy Gulch, Homestake proposes to undertake a water quality sampling program in Windy Gulch. The program will include quarterly sampling of water in Windy Gulch at a point several hundred feet upstream of the confluence with Willow Creek. An old concrete flume exists at this location. Flow in Windy Gulch has been observed at this point on a mare frequent basis than elsewhere below the mine site because bedrock is close to or at ground surface. Existing water quality data obtained in Windy Gulch, as included in Table 1, will be used in combination with additional data to be collected before the adit seal is constructed to provide a baseline for comparison. Should quarterly monitoring data from Windy Gulch (collected under a monitoring plan as described below) indicate an increasing trend in dissolved constituents, then additional investigation and analysis may be appropriate. Such investigations, if necessary, would be discussed and approved with the DMG prior to proceeding. In addition to sampling of water in lower Windy Gulch, visual surveys of the area around the 9360 Portal will be made quarterly to determine whether any additional surface seeps are occurring.