1994-01-27_REVISION - M1977493 (3)

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HISTORY In 1964 , after extensive research , The Climax Mine constructed the Moiy Oxide Plant to recover the molybdic oxide ore values . Since the process was not metallurgically compatible w ; th the sulfide recovery process it became necessary to deposit the oxide tailings in a separate tatting deposition containment facility. As a result , the No .4 Dam (Oxide-Pond) was constructed in 1964 and enlarged in 1968 . Because of declining molybdenum prices , the oxide recovery process became uneconomical , and the plant was closed in 1969 . The existing Oxide-Pond , as designed , would have contained approximately 4 .5 min ion tons of tailing with provisions for future enlargement . At the time of cessation of operations , approximately 1 .0 million tons of tailing had been actually deposited . The oxide tailings were characterized as having a high acid producing potential , and as a result , a lime hydration plant was constructed at the site to neutralize the acidic water . This process continued through the 1970 ' s , and the resultant neutralized water was later incorporated into the Climax Mine industrial water system. After cessation of operations , only water from normal precipitation that occurred below the interceptor canals was impounded in the reservoir . There are no current provisions for transferring either industrial or fresh water to the reservoir , anc discharges from the reservoir to the Eagle River are not permitted . The excess runoff and dam seepage water that accumulates in the reservoir must De seasonally transferred , via pumping , into the Climax industrial water system. Forced by market conditions to become a ''swing-producer'' , the Climax Mine sought alternative revenue sources to fund water treatment , property taxes , regulatory compliance requirements , and other fixed nolding costs curing periods of limited or no production . One feasible source of operating revenue is to convert the Oxide Tailing Pond to a fresh water impoundment for the Climax Mine and/or other parties with vested water rights . In 1989 , as a result of feasibility studies by independent technical consulting firms , it was decided that the most feasible process for conversion of the reservoir from a tailing impoundment into a water holding facility would be to relocate the deposited taking to one of the existing active tailing facilities . The initial phase of the project (Eagle Park Reservoir) involves permit application and approval , removal of the existing tailings and construction of the necessary dam outlet structures . This phase was initiated early in 1998 , and wili continue , on a seasonal basis , through 1995 at an estimated cost of $8 ,000 ,000 .