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Coarse Fractii <br />Before Test - Saturated <br />Wet Density 113.91b/ft3 (1.5 ton/yd" <br />Moisture Content 25.3% <br />Percent Saturation Level 81.7% <br />Dry Density 90.9 lb/ft3 (1.2 ton/yd3) <br />m Consolidation <br />After Test - Under-saturated <br />i 118.5 lb/ft3 (1.6 ton/yd3) <br />25.5% <br />under-saturated <br />94.5 lb/ft3 (1.3 ton/yd3) <br />Slimes Fraction Consolidation <br />Before Test - Saturated After Test - Under-saturated <br />Wet Density 110.71b/ft3 (1.5 ton/yd3) 121.4 lb/ft3 (1.6 ton/yd) <br />Moisture Content 43.3% 30.4% <br />Percent Saturation Level 100.5% under-saturated <br />Dry Density 77.2 Lb/ft3 (1.0 ton/yd3) 93.1 lb/ft3 (1.3 ton/yd3) <br />Important Impoundment Stability Measure - The consolidation data above provide for a standard of comparison <br />for evaluating consolidation during operations, utilizing a core sampling procedure that has already been described <br />earlier in this Exhibit. Core samples shall be determined under-saturated when testing reports Alloisture Content <br />data less than the Before Test - Saturated conditions in the above table. This condition demonstrates that the <br />impoundment is consolidating and that saturated, phreatic zones are being mitigated through proper dewatering and <br />drying. Additionally, we have elected to incorporate standpipe piezometers into the design as a simple and effective <br />means of measuring the saturated, phreatic surface level and unstable pore pressures. Standing water will be <br />measured in these standpipes if saturated zones exist and an embankment profile can be mapped. <br />The incorporation of geosynthetics into this design brings forth applying the latest technology and proven <br />engineering practice to bolster the stability of these types of upstream raised tailings impoundments. Applying this <br />technology should eliminate unfounded fears of failure. <br />The potential for liquefaction of this proposed Tailings Impoundment during an earthquake has such a chance risk of <br />occurring; such that, when balanced against the very limited hazard potentials to life and property resulting from <br />such an event at the proposed project location, formulating a rigorous preventive engineering design is extreme. <br />Seismic stability analysis has demonstrated the enhanced stability by incorporating Synteen geogrid. Active and <br />passive dewatering methods have been prescribed using pumped decanting, geocomposite liner underdrains, and a <br />network of "French drains" ("French drains are discussed in the Composite Liner System specifications below). <br />Carefully adhering to the operating and embankment construction parameters previously set forth ensures proper <br />impoundment stability behavior. These parameters prescribe a method of tailings impoundment technique, <br />dewatering practices and embankment geometry relationships. The design was developed based on the preeminent <br />works on this subject: Steven G. Vick's Planning, Design, and Analysis of Tailings Danis, 1990 and the US Army <br />Corps of Engineers (USACE) Slope Stability, EM 1110-2-1902. All of this speaks to diminish seismic liquefaction <br />concerns. <br />This proposed site was chosen because of its remote location. During a site visit to our property on October 27, <br />2010, we demonstrated to the DRMS the non-populated, non-developed, and limited hazard potential of this <br />proposed project. We feel that this proposed impoundment relates to a "Low Hazard Dam" situation as defined by <br />State Engineer Standards (Rule 2-CCR 402-14.2.14.3) - "'Low Hazard Dam ' is a darn for which loss of human life <br />is not expected, and significant damage to structures and public; facilities as defined for a `Significant Hazard' dam <br />is not expected from failure of the dam." Asa Colorado Professional Engineer it is my job to take into <br />consideration risk and threat levels to life, property and the environment and incorporate that into a safe design - <br />which has been carefully done here. <br />Page 26 of 37