2010-12-17_REVISION - C1981019 (130)

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an out of pit waste stockpile filling the Little Collom Gulch to the north of the initial boxcut with a planned volume of 193M bank cubic yards. Designs for this out of pit waste stockpile and water management structures to prevent inundation of the open pit during heavy run -off (eg snow melt) are only at a Conceptual level. Once pit designs are better defined, additional design work is considered necessary on the waste stockpile and water management structures to achieve the required level of confidence in their safety, stability and cost. TS recommends geotechnical and civil engineering expertise be engaged to undertake Pre - Feasibility design work at the appropriate time. CCC acknowledges that closure planning for the current Colowyo operation and the proposed Collom development does not as yet meet requirements of the recently established Rio Tinto standard. Closure plans and cost estimates will need to be reviewed prior to completion of the Pre - Feasibility Study to ensure all aspects have been considered and adequate provisions included. 2.5 Infrastructure The Collom resource is located some 4 to 5 miles directly west of the existing CCC operation, however due to the topography of the area actual travel distance to the site by vehicle is around 10 miles. Due to its location Collom will require establishment of new infrastructure, including access road, workshop and office facilities, HV power supply, ROM coal handling facilities and overland conveyor to the existing CCC rail loadout. As part of the 2003 CRS three external engineering consultants, ThyssenKrupp Robins, Mine & Mill Engineering and Electrical Systems Consultants were engaged to provide infrastructure designs and cost estimates. These designs and cost estimates continue to form the basis for the Collom Pre - Feasibility Study and project evaluation. TS (David Bailey) has previously reviewed these designs and estimates and provided comments directly to CCC. One issue identified was the need to include Owner's Costs in the capital estimates and it is not evident from current project documentation that this has as yet been addressed. The Rio Tinto Capital Cost Working Practice document (available via TEG intranet site) should be referenced for more details. Prior to completion of the Pre - Feasibility Study it will be important to confirm that the basis for selection of infrastructure alternatives, such as location of ROM facilities and the conveyor coal haulage option are defensible and documented. This is necessary to ensure the project design basis is sufficiently well defined to proceed into Feasibility. 2.6 Study Management CCC has established a Collom Development schedule, however it is inconsistent with Rio Tinto project development guidelines and terminology. Additional detail should also be included on Study and Approvals tasks and major milestones. It is recommended that specific allowance be made for delays between major study phases to account for project review and approvals. RIO TINT O TS Ref: DRAFT Version: 1 13 Tedmi-I Se,wi,