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Mr. Allen Sorenson - August 6, 2010 <br />Page Two <br />This, in conjunction with an ongoing, non-permitted discharge from the 3`d Level adit, poses <br />several concerns to AGC as it transitions into full "permittee" status. <br />In a separate August 6, 2010 letter request (a copy of which has been provided to you) to Mr. <br />Jeff Deatherage, P.E. of the Division of Water Resources (DWR), AGC has more fully <br />documented the circumstances associated with these inherited site conditions, along with a <br />number of related permitting issues related thereto, in an effort to obtain a "variance" or <br />"authorization" from DWR to allow AGC's undertaking of this proposed environmental mitigation <br />program in which temporary consumptive use of groundwater (and surface water, in the case of <br />the tailing impoundment) resources would occur. That review request runs concurrent with this <br />request to DRMS, therefore, AGC is providing copies of all inter-related communications to both <br />parties. <br />In essence, AGC has requested DWR authorization to carry out the following two actions, both <br />of which comprise components that will result in "consumptive use"; thus, AGC's request for a <br />"variance": <br />(1) Pumping/withdrawal from the non-permitted Cash Mine well in order to curtail the non- <br />permitted adit discharge (an inherited site condition). This would include an interim <br />authorization to immediately terminate the discharge via utilization of mine water for <br />purposes of supporting diamond drilling operations to be carried out in an upcoming <br />exploration program. Consumptive use attributable to drilling operations should be <br />sufficient to directly offset (i.e., terminate) the discharge in the near-term. <br />(2) Limited duration continuance of the Cash Mine dewatering effort in combination with <br />proposed concurrent spray evaporation and land application activities (the subject of this <br />letter request) carried out under the purview of DRMS authority. This would be <br />undertaken to further facilitate draw-down of the mine water pool. Presumably, the <br />proposed spray evaporation and land application processes would also constitute <br />consumptive use, similarly requiring a DWR variance or authorization. <br />AGC has also requested that DWR authorize AGC to conduct the Cash Mine dewatering <br />activities continuously or intermittently, at AGC's discretion, through the Spring 2011 run-off <br />period (e.g., June 30, 2011), subject to capacity limitations and availability within the Gold Hill <br />Mill tailing impoundment. Upon delivery to the tailing impoundment, fluids are proposed to be <br />routed to a dual spray evaporation and land application system (again, the subject of this letter <br />request) to reduce the water level within the impoundment to below minimum freeboard <br />conditions. Full draw-down of the mine pool to the 7t' Level, if achievable, would provide AGC <br />with definitive data as pertaining to recovery rates, and increase the knowledge base relative to <br />site specific hydrologic conditions. This, in turn, may be beneficial to AGC in addressing DRMS <br />informational requests relative to completing the currently pending Technical Revision 6. <br />DRMS has indicated that the subject permit area(s) already possess DRMS approval for <br />utilization of spray evaporation techniques within the lined pond perimeter. DRMS has further <br />indicated that a "non-permittee" can carry out such activities under an "at risk" scenario.