2008-08-21_REVISION - M1978091UG

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Level 6 Waste Rock Removal The Level 6 waste rock contains potentially acid generating materials. Acid is a hazardous substance and is generated when the acid-bearing rock comes in contact with oxygen and water. In order to control acid generation, several approaches can be taken: prohibit oxygen contact with the rock, and/or prohibit water contact with the rock. Currently, the flow pathways by which water contacts the existing Level 6 waste rock pad are unclear. As demonstrated during the April 28, 2008 site visit; it appears that the portal/pad occur between two fault systems that contribute potential flows to the waste rock toe seep. Until this year, the effects (or lack thereof) of Deadman gulch flows to the waste rock toe seep could not be observed. Now that the Deadman gulch geotextile channel is in place, the isolation of these flows from the waste rock enables us to review site conditions and the hydrologic setting. As observed, the toe seep was flowing at approximately 100 gpm. Given the fact that the Deadman gulch flows are isolated and do not contribute to the seep, and that the mine is relatively dry (producing approximately 2-3 gpm underground); there must be another source of flows contributing to this seep. Site observations identify possible fault-related flows along a path to the north of the Level 6 pad. These flows are further identified by the presence of water-dependent aspen tree stands. Further evidence was provided with the measures of pH indicating that the waste rock toe seep (pH of 2.9) is receiving water from an acid generating formation (rhyolite), and not from Deadman Gulch (pH measures of 6.1 - 6.2) or from alluvial formation flows (pH - 5.6). It is not possible for Deadman Gulch or alluvial water pH values to plummet from 6.1 or 5.6 to a value of 2.9 in that distance - at that flow rate. These results indicate that there must be another water source that already contains acid generating characteristics. It is absolutely essential that the potential flow paths associated with this setting be clearly understood before the waste rock removal effort be under-taken. It is a pre-conceived notion that removal of the waste rock pile from Deadman Gulch will `correct' the water quality concerns (low pH, mineralized concentrations of metals) associated with the Gulch water. Cursory evidence indicates that the Gulch water is a culmination of combined flows from a diversity of groundwater sources. If the water in this system is fed by naturally enriched groundwater systems, such as those associated with the two faults, it is unlikely that water quality will change as a result of the waste rock removal. Furthermore, the ultimate purpose of the waste rock removal effort is to remove the waste rock from any and all water contact; thus removing the waste rock as an acid generation source material. Therefore we absolutely need to understand and locate any and all water flow pathways before moving the material, and potentially creating another water and waste rock contact scenario. To-date, LKA Int./Richmont Mines Inc. have completed a significant amount of effort to evaluate the hydrologic setting associated with the Level 6 pad. The results of several sampling events remain pending, however it is anticipated that a `Hydrologic Evaluation' document will be provided for BLM, DRMS review in Fall, 2008. Concurrent with the hydrologic evaluation, Black Creek Hydrology associates has obtained 3-dimensional survey points to be able to estimate waste rock volumes, storage capacity volumes etc.. The results of these efforts were incorporated into this reclamation plan. Regardless of the unknown status of the Level 6 pad hydrologic setting, this reclamation plan encompasses a waste rock removal effort which would move waste rock currently residing within the Deadman Gulch natural flow pathway, towards the north (thus occupying a portion of the pad, access 8