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The TSF was designed as a zero discharge facility. Non disturbed drainage is diverted around <br />the TSF while disturbed area drainage from the mill area disturbance reports to the TSF. <br />An observation well exists down gradient from the 4.6 acre TSF area. CTL/ Thompson <br />constructed an observation (monitoring) well for the TSF area. This April 10, 1990 report, <br />Installation of Observation Hole, is presented as Appendix D. This observation well is shown on <br />Exhibit MLR -1. <br />In October 2001, Leadville Mining and Milling Inc. provided a commitment to CDRMS that the <br />mill would not dispose of any additional mine tailings or other mine related material in the <br />tailing pond until LMMI provides information concerning four conditions to the permit. The <br />conditions included: water rights, air permit for the mill, water monitoring, surface water <br />diversions ditching calculations, and tailing pond compaction results. <br />Current Operations <br />The current mill configuration, process and operations have been modified to treat a different ore <br />than was processed during the last operational period, as described above in the section titled <br />MILL DESIGN AND CAPACITY. This necessitates rephrasing the initial TSF plan to provide <br />tailings disposal capacity for a more efficient concentrating system and increased tails reporting <br />to the TSF. The historical Phase 1 TSF embankment compaction is inadequate for current <br />production requiring complete removal of the existing embankment and reconstruction of the <br />TSF facility with a lined facility. <br />The reconstruction honors the original permit parameters as follows: <br />• The same 4.6 acre tailings disposal facility (TSF) is utilized. <br />• The pond excavation at a maximum 21 ft depth does not impact the known aquifers at 80- <br />100 ft below the surface. <br />• The tailings impoundment dam will be constructed from available onsite soils borrowed <br />from the tailings disposal area as outlined in the recommendation of CTL/Thompson, <br />Inc., Consulting Geotechnical and Materials Engineers, Permeability Study Tailing Pond <br />Area, April 10, 1990, presented as Appendix A. <br />• The TSF will be constructed as a zero discharge facility with 3 ft of freeboard in <br />accordance with the Probable Maximum Precipitation Estimates — United States Between <br />the Continental Divide and the 103` Meridian. <br />• Non disturbed drainage is diverted around the TSF while disturbed area drainage from <br />the mill area disturbance reports to the TSF. <br />• The observation well down gradient from the 4.6 acre TSF area will be maintained in its <br />current location and monitored. <br />• Topsoil, in accordance with the topsoil plan will be removed and stockpiled. <br />Additionally, the proposed TSF facility further commits to: <br />• Stability analysis initiated by CTL Thompson, Inc. May 12, 2011, on samples collected <br />from the existing compacted fill embankment, 2 additional holes drilled to compliment <br />and confirm the 1990 permeability test hole data. <br />• A 2.5:1 (horizontal to vertical) outside face, and a 2:1 interior face embankment dam with <br />a 12 ft wide crest berm. <br />M1990 -057 June 6, 2011 <br />