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SMITH WILLIAMS CONSULTANTS, INC. <br />304 Inverness Way South • Suite 490 • Englewood, Colorado 80112-5828 <br />Phone: (303) 433-0262 • Fax: (303) 433-0362 • www.goswc.com <br />January 22, 2008 <br />Catherine A. Clark, P.E. <br />Chief Engineer <br />Climax Molybdenum <br />P.O. BOX 68 <br />Empire, Colorado 80438 <br />Re: Climax 2010 Project <br />Recommended Seismic Stability Approach <br />Dear Catherine: <br />Project 1115 <br />This letter has been prepared by Smith Williams Consultants, Inc. (Smith Williams) for Climax <br />Molybdenum and provides the proposed technical approach and rationale for evaluating the <br />seismic stability of the existing Tenmile and Mayflower tailing storage facilities (TSF) for the <br />Climax 2010 Project. The seismic stability of the TSFs will be evaluated as part of the final <br />engineering design work and will consider the existing and future TSF configurations. <br />The proposed approach presented herein to assess the seismic stability of the TSFs is consistent <br />with the current internationally accepted design philosophy for geotechnical structures such as <br />dams and other tailing facilities constructed throughout the world. It is proposed that the TSFs <br />be evaluated for seismic stability under two levels of design earthquake events: the Operating <br />Basis Earthquake (OBE) for the operational period of the facility and the Maximum Design <br />Earthquake (MDE) for the post-closure period. <br />Based on definitions presented in ICOLD (1995) and USACE (1995), the OBE is an earthquake <br />event that can reasonably be expected to occur within the service life of the project. The <br />associated performance requirement with an OBE is that the facility will operate with little or no <br />damage and without interruption of function. The MDE is the maximum level of ground motion <br />for which a structure is designed or evaluated. The associated performance requirement for an <br />MDE is that the facility performs without catastrophic failure, such as uncontrolled release, <br />although severe damage or economic loss maybe tolerated. <br />The OBE for the Tenmile and Mayflower TSFs will be selected based on the operational life of <br />the facility and the results of the probabilistic seismic hazards assessment (PSHA) completed for <br />the site. The MDE will be set equal to the Maximum Credible Earthquake (MCE) (ICOLD, <br />1995) and will be based on a deterministic assessment for the project site. The parameters for <br />the OBE and MDE (e.g., peak ground acceleration and return period) will be developed as part <br />of the detailed design effort and submitted for review pursuant to Rule 7.3.1 (1). <br />C:\DOCUMENTS AND SETTINGS\roxaneUocal settings\tertiporary intemet files\content.ouUook\a3c4wovg\seismic stability letter.doc <br />