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Memo to Larry Oehler 2 August 29 2004 Until the Applicant has completed the actions necessary to be eligible for the 20 percent bonding option, DMG should bond for 100 percent of the cost to construct the slurry wall, using a unit cost of $3.00 per face square foot. Another course of action would be to issue the permit under the 20 percent bond with a commitment or stipulation that a technical revision will be approved incorporating the necessary elements described above prior to the Operator exposing ground water in, the pit. DMG has completed a review of the Tetra Tech RMC slope stability analysis for the Tucson South Pit dated May 12, 2004. The purpose of the stability analysis was to demonstrate that the excavation setbacks proposed in the mine plan are sufficient to prevent damage to structures that are not owned by the Operator. In the Tetra Tech letter report that describes the stability analysis, reference is made to a DMG memo dated March 6, 2003 and it is stated that the analyses were run in accordance with the requirements discussed in that memo. Essentially, the DMG memo describes stability analyses where there has been no site specific sheaz strength testing of soil materials. Rather, assumed strength parameters based on values for similaz soil, that can be found in the geotechnical literature, aze input to the analyses. If strength parameters are selected from the low end of the range of applicable values, thus analyzing the worst case scenario for slope stability, any resulting safety factor in excess of unity is an acceptable demonstration of stability. The March 6, 2003 DMG memo suggests that weathered claystone bedrock be analyzed at its residual strength; this suggestion was followed in the Tucson South Pit analyses. However, certain of the other strength parameters input to the Tucson South analyses do not correspond with the discussions in the DMG memo. Accordingly, DMG will require that the analyses be rerun using the following shear strength values, and that the mining setbacks be adjusted as necessary. Moist Unit Saturated Unit Effective Cohesion Effective Friction Material Wei ht c Wei ht c s An le de reel Overburden clay and clay 114 126 50 28 lenses S1 Walls 110 122 0 0 Sand and Gravel 130 137 0 35 Weathered Claystone 124 134 0 14 Bedrock residual stren Claystone Bedrock 124 134 100 28 eak stren * The clay lens was inspected by DMG in August 2004 where it outcrops in the Tucson North Pit (Pemrit No, M-1991-140). Field classification of one sample of the clay lens determined that it classifies as type CL under the Unified Soil Classification System. cc: Carl Mount, DMG (via email) c:~acs\I.OANER MACHINE\My Documents\Tucson South.doc