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TECHNICAL MEMORANDUM <br />To: Bill Lyle <br />Date: January 3, 2004 <br />Page 7 <br />The conceptual hydrologic models and the observed geochemical characteristics of natural <br />oxidation at the ground water table for the mineralized area that subsequently became the <br />San Luis Mine serve as the basis for comparison of current conditions. <br />Review of the water quality data in Table 2 demonstrate important trends associated with <br />the mineralized zone at the San Luis Mine. Well 87-86 is the shallowest well and provides <br />information about the pre-mining shallow mineralized bedrock aquifer. The baseline water <br />chemistry data show that the shallow mineralized zone was affected by oxidation of <br />sulfide-bearing rock, which is consistent with the conceptual geochemical model. In <br />particular, concentrations of fluoride, manganese, and sulfate are elevated in comparison <br />with other wells listed in Table 2. Concentrations of constituents generally decrease with <br />increasing well depth, although concentrations of iron show greater overall variability, <br />which may be due in part to well completion or microbial activity as has been observed in <br />other ground water wells at the San Luis Mine (e.g., M-11). <br />Based on the hydrologic conceptualization of flow in the bedrock aquifer system, the <br />principal method of flow out of the bedrock aquifer was from the shallow zone near the <br />outcrop of the fault gouge clay layer. A portion of the bedrock aquifer flow had to have <br />come from the deeper portions of the aquifer, probably manifesting as leakage through the <br />clay material; but the majority of the bedrock flow would probably have come from the <br />shallow zone. The presence of iron-stained seeps and springs in the vicinity of the <br />mineralized zone, and the iron and manganese content of the above lying Santa Fe <br />Formation and Rito Seco alluvial materials attest to a long-history of bedrock flow <br />containing fluoride, manganese, sulfate, and iron. <br />Thus, for purposes of comparing current ground water chemistry with pre-mining water <br />chemistry, the shallow bedrock aquifer chemistry, as exemplified by well 87-86, is the <br />most appropriate set of data to characterize the chemistry of pre-mining ground water. <br />Review of the water quality database for the shallow pre-mining bedrock aquifer in Table 2 <br />shows that water chemistry data were collected during 14 sampling events over a period of <br />approximately 10 quarters. This pre-mining monitoring dataset constitutes a series of <br />measurements that is comparable to the Colorado Division of Minerals and Geology's <br />(DMG) requirements for establishing site specific ground water quality standards (i.e., 5 <br />quarters of water chemistry data with monthly sampling the first 5 months followed by <br />three samples over the remaining 3 quarters for a total of 8 samples). <br />CURRENT CONDITIONS AS RELATED TO PRE-MINING <br />Mining involved removal of mineralized rock that was processed in the milling facility and <br />with tailings placed in the lined tailings disposal area. The East Pit was completely <br />backfilled with a return to approximate original topography. The West Pit (including the <br />satellite Pink Gneiss Pit) was partially backfilled as described in Technical Revision 18 <br />(TR-18). Backfilling resulted in a surface elevation in the West Pit of approximately 8,600 <br />paprojecisl111-newmon!(s luis)lsminisVrv28whgltylpmmim-Ipil.doc