PLANO DE EXECUÇÃO

Paracatu 3rd Ball Mill Project

Project Execution Plan

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PROJECT EXECUTION PLAN

FOR THE

PARACATU 3rd BALL MILL PROJECT

BRAZIL

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1.0 EXECUTIVE SUMMARY ...

2.0 PROJECT OUTLINE ...

2.1 Installation scope ...



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TABLE OF CONTENTS

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2.2 Project Structure Overview .......................................................................................................2-10

2.2.1 Kinross Gold Corporation & Rio Paracatu Mineração (RPM) .................................2-10

2.2.2 SNC-Lavalin ..........................................................................................................2-11

2.2.3 Contracts...............................................................................................................2-11

2.3 Key Issues ................................................................................................................................2-12

3.0 PROJECT EXECUTION PLAN OBJECTIVES .........................................................................3-13

3.1 Objective of the Project Execution Plan ....................................................................................3-13

3.2 Project Execution Plan Ownership, Maintenance, Distribution and Control ..............................3-13

3.3 Reference Documents ..............................................................................................................3-14

3.4 Confidentiality ...........................................................................................................................3-14

4.0 DETAILED SCOPE OF WORK ...............................................................................................4-15

4.1 Physical Facilities Scope ..........................................................................................................4-15

4.2 Battery Limits of Facilities Scope ..............................................................................................4-15

4.3 Overall Services Scope ............................................................................................................4-16

4.3.1 Engineering ...........................................................................................................4-16

4.3.2 Procurement .........................................................................................................4-16

4.3.3 Construction Management ....................................................................................4-17

4.3.4 Safety....................................................................................................................4-17

4.4 Detailed Services Scope and Deliverables ...............................................................................4-18

4.4.1 Project Management .............................................................................................4-18

4.4.2 Engineering ...........................................................................................................4-18

4.4.3 Procurement .........................................................................................................4-21


4.5 Services Scope Exclusions .......................................................................................................4-22

4.6 Division of Responsibilities .......................................................................................................4-23

4.7 Third Party Input List.................................................................................................................4-25


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5.0 EXECUTION STRATEGY ...

5.1 Project Objectives...

5.2 Execution Strategy ...

5.2.1 Engineering ...

5.2.2 Procurement ...



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5.2.4 Overall Project Management .................................................................................5-30

6.0 SCHEDULE..............................................................................................................................6-31

6.1 Critical Success Factors ...........................................................................................................6-31

6.2 Critical Schedule Activities ........................................................................................................6-31

6.3 Project Schedule ......................................................................................................................6-31

6.3.1 Critical dates/milestones and Critical Path items. ..................................................6-31

6.3.2 Significant Constraints...........................................................................................6-32

6.3.3 Long lead items that are critical to the schedule ....................................................6-32

6.3.4 Milestone Schedule ...............................................................................................6-33

6.3.5 Client Kick-Off Meeting..........................................................................................6-33

6.3.6 90 Day Early Work Plan ........................................................................................6-33

6.3.7 Key Reviews .........................................................................................................6-33

7.0 PROJECT ORGANIZATION ....................................................................................................7-34

7.1 Organization Chart ...................................................................................................................7-34

7.2 Roles and Responsibilities - SNC Lavalin Team .......................................................................7-36

7.2.1 Common Responsibilities ......................................................................................7-36

7.2.2 Specific Project Team Member Responsibilities ....................................................7-37

8.0 ADMINISTRATION AND COMMUNICATIONS ........................................................................8-46

8.1 Project Instruction Manual ........................................................................................................8-46

8.2 Communications Plan ...............................................................................................................8-46

8.2.1 Kinross’s Skire Unifier System ..............................................................................8-46

8.2.2 Formal Lines of Communication ............................................................................8-47

8.2.3 Email Communication ...........................................................................................8-48

9.0 HEALTH, SAFETY AND ENVIRONMENT ...............................................................................9-49

9.1 Ownership ................................................................................................................................9-49


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9.2 Kinross Standards ...

9.3 SNC-Lavalin Standards ...

9.4 Contractor Requirements...

9.5 Details ...

10.0 RISK MANAGEMENT PLAN ...

10.1 Risk Review Schedule ...

10.2 Risk Database ...

10.3 Roles ...

10.3.1 Risk Managers ...

10.3.2 Safety Managers ...

10.4 Responsibilities...

10.4.1 Project Manager ...



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10.4.2 Project Health, Safety and Environmental Manager ............................................10-53

10.4.3 Risk Manager ......................................................................................................10-53

10.4.4 Risk Owner .........................................................................................................10-54

10.4.5 Other Stakeholders .............................................................................................10-54

11.0 QUALITY................................................................................................................................11-55

11.1 Quality Management Plan ......................................................................................................11-55

12.0 PROJECT CONTROLS..........................................................................................................12-56

12.1 Alignment with Kinross ...........................................................................................................12-56

12.2 Controls Systems ...................................................................................................................12-56

12.3 Roles & Responsibilities .........................................................................................................12-57

12.3.1 Toronto Project Controls .....................................................................................12-57

12.3.2 Belo Horizonte Project Controls ..........................................................................12-57

13.0 ENGINEERING PLAN ...........................................................................................................13-59

13.1 Engineering Plan ....................................................................................................................13-59

13.2 Objectives of this Plan ............................................................................................................13-59

13.3 Objectives, Strategy and key Activities / Deliverables .............................................................13-59

13.3.1 Engineering Objectives .......................................................................................13-59

13.3.2 Engineering Strategy ...........................................................................................13-60

13.3.3 Key Engineering Activities/Deliverables...............................................................13-61


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13.4 Engineering Scope of Work ...

13.5 Engineering Deliverables ...

13.5.1 General ...

13.5.2 Deliverable Progress ...

13.5.3 General ...

13.5.4 Change Control ...

13.5.5 Calculations ...

13.5.6 Design Software ...

13.6 Checking and Review ...

13.6.1 General ...



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13.6.2 Discipline Internal Review ...................................................................................13-64

13.6.3 Multi-Discipline Checking ....................................................................................13-64

13.6.4 Project Design Reviews ......................................................................................13-65

13.6.5 Procurement and Construction packages ...........................................................13-65

13.7 Reference Information ............................................................................................................13-65

13.7.1 Historical Project Documents ..............................................................................13-65

13.7.2 Procedural Documents ........................................................................................13-66

14.0 PROCUREMENT ...................................................................................................................14-67

15.0 CONSTRUCTION...................................................................................................................15-68

16.0 COMMISSIONING AND OPERATIONS ................................................................................16-69

16.1 Facilities Commissioning Plan ................................................................................................16-69

16.1.1 Objectives of this Plan .........................................................................................16-69

16.1.2 Key Principles .....................................................................................................16-69

16.1.3 Commissioning Methodology ..............................................................................16-70

16.1.4 Commissioning Scope of Work ..........................................................................16-73

16.1.5 Approvals ............................................................................................................16-73

16.1.6 Operations and Maintenance Manuals ................................................................16-74

16.1.7 Critical Function Test Procedures........................................................................16-74

16.1.8 Training ...............................................................................................................16-74

16.1.9 Commissioning Spares and Equipment...............................................................16-74

16.1.10 Risk Management and Hazard Identification .......................................................16-74

16.1.11 COMMISSIONING DOCUMENTS........................................................................16-74


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16.1.12 Start-up Deliverables ...

16.2 Start-Up Plan ...



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16.3 Operations Support & Training Plan .......................................................................................16-75

17.0 DOCUMENT AND DATA MANAGEMENT.............................................................................17-76

18.0 FINANCE ...............................................................................................................................18-77

18.1 Invoice Management Plan ......................................................................................................18-77




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LIST OF APPENDICES

Appendix A - Preliminary Schedule

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1.0 EXECUTIVE SUMMARY



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Kinross is adding a third Ball Mill to the existing Paracatu Plant 2 grinding circuit. The purpose of the

Ball Mill addition to the grinding circuit is to maintain current gold production as the mining operation

moves into progressively harder ore.

The project is being executed with a “Fast Track” methodology and Kinross has placed an order for

the new Ball Mill prior to the commencement of this EPCM project.

The SNC-Lavalin services will be provided from three locations: Toronto, Belo Horizonte and

Paracatu site.

The existing plant (Plant 2) has recently finished an expansion project “Expansao III”. The

design of the existing plant had made allowances for the future addition of a third ball mill. The

scope for this project is somewhat different to that anticipated in the Expansao III design, but the

overall layout is similar.

The key Kinross requirement is that the third Mill be ready for commissioning during December

2010 and that the total installed cost is not to exceed the capital budget approved by Kinross

board.


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2.0 PROJECT OUTLINE

2.1 Installation scope



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SNC-Lavalin is providing trade-off and scoping level Study Services for the overall Paracatu

processing plant. The broader aspects of the scoping study that extend beyond the grinding

area (area 26) are not complete, however during the execution of the study it became clear that more

grinding power is required to maintain Mill throughput as progressively harder ore will be

processed.

A Ball Mill of the size used at this plant is a long lead procurement item. Based on the Paracatu

mine plan, it was decided by Kinross management that quick action was required to maintain

plant throughput. Therefore to expedite the project completion a third Ball Mill was procured early to

shorten the overall project duration. A +/-15% Cost Estimate for the third Ball Mill addition was

completed in January 2010 on the basis that the fundamental design parameters and general

layout used for the preceding Expansao III project had not changed and that a mill had already

been purchased by Kinross.

The installation of the 3rd Ball Mill is being “fast tracked” as Kinross expects that regardless of the

future recommendations resulting from the scoping study, an extra Ball Mill will be required to

process the harder ore. The current mine plan has harder ore affecting the existing Mill

production rates at the end of 2010, therefore there is a need to expedite the installation of this

Ball Mill.

This mill addition project will follow on from the “Expansao III” project which started construction

activities at this site in 2007 and is currently in the final stages of winding down.

The Expansao III project that resulted in the current configuration of Plant 2 anticipated the

provision of a third Ball Mill as part of the milling circuit. The current Plant 2 design has

allowances for mill building extension and upgraded power supply for the third Ball Mill.

At the time of design it was thought that the new mill would be a 13MW Ball Mill, identical to the

existing Ball Mills, however the Ball Mill currently being procured by Kinross is a 15MW Ball Mill. It is

slightly larger in diameter and somewhat longer in size. Preliminary investigations suggest it will fit

into the allotted space provided by Expansao III.




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The new Ball Mill circuit design is similar to the existing Ball Mill circuits with the new mill in closed

circuit with cyclones. The new design also incorporates the use of gravity for the

recovery of sulphides and gold via jigs. A new gravity circuit is not being added at this time;

however the existing gravity circuit will be modified to allow for the cyclone feed from the new Ball

Mill circuit to be fed to the existing jigs.

The new 3rd Ball Mill circuit will feature cyclone feed and jig feed pumps, hydrocyclone bank and other

ancillary equipment.

The existing mill building will be extended in accordance with the proposed design of Expansao III to

include column lines A&B, however the north and south portals will not be fully extended as they are

not required.

The bridge crane that spans the main building will be extended.

The existing allocated spaces will be left in the building should it be decided to add new jigs or a new

Vertimill in the future.

2.2 Project Structure Overview

The Project will be known as the “Paracatu 3rd Ball Mill Project”.

The project has been sanctioned by the Kinross Board and SNC-Lavalin has been awarded the

EPCM contract for the detailed design and construction of the facilities.

SNC-Lavalin’ scope is for full EPCM services up to commissioning of the process plant.

Commissioning of the plant will be a joint effort between SNC-Lavalin and Rio Paracatu

Mineração Operations.

2.2.1 Kinross Gold Corporation & Rio Paracatu Mineração (RPM)

The Customer is Kinross Gold Corporation, a publicly listed company on the Toronto Stock

Exchange that operates in the mining sector predominantly in Gold mining.

Kinross operates the wholly owned subsidiary Rio Paracatu Mineração in Brazil.




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The address for Rio Paracatu Mineração is:

Rio Paracatu Mineracão S.A.Estrada do Machado s/n - ParacatuMinas Gerais StateBrazilZip Code 38600-000Phone at Site: +55 38 36791000Fax at Site: +55 38 36791311Website: www.kinross.com

2.2.2 SNC-Lavalin

• SNC-Lavalin Inc. (short name as SLI) - Toronto Office

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• SNC-Lavalin Miner Consult (short name as SLM) - Belo Horizonte Office

2.2.3 Contracts

The EPCM contracts for this project will be with Rio Paracatu Mineracão. Two contracts will be

executed for this project. One between SNC-Lavalin Inc. and Rio Paracatu Mineração, and the other

between SNC-Lavalin MinerConsult and Rio Paracatu Mineração. It is important that these

relationships are recognised during the execution of the project as taxes levied on project

expenditures will vary depending on the location of the service provider.

SNC-Lavalin will enter into two contracts with Kinross, one with SLI M&M Toronto, the other with SLM

(Minerconsult):

1. Services provided by non-Brazilian locations will be covered by the “offshore contract”.

2. Services provided by Brazilian locations will be covered by the “onshore contract”.

Both contracts are structured the same way and are covered by the same terms and conditions and

the distinction arises mainly to simplify the administration of taxes and exchange rate

differences between Brazilian and non-Brazilian sourced services.

The contracts are reimbursable with a fixed profit component. The profit portion can only be

changed if there is a variation in scope accepted by the client through the course of execution.

It is essential that all lead engineers and department leaders are fully conversant with the

contracted scope, and raise project change notices as soon as there is any proposed change to


http://www.kinross.com/



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that contracted scope. No work is to be done on a scope change without approval from the

Project Manager.

There is no schedule incentivisation or liabilities for the EPCM services contract. Liability for

rectification is limited to re-performance of services.

2.3 Key Issues

Key Issues:

• This project is schedule driven and uses a “fast track” execution strategy;

• The SNC-Lavalin scope will be delivered by a joint team from the Toronto and Belo Horizonte

Offices. Proper understanding of roles, responsibilities and deliverables for each location is

critical to successful execution;

• The project is Brownfield. Information will be obtained from Kinross to ensure:

Use and integration into the project of existing design standards;

Lessons learned from the previous phase are passed on to the new project team;

The project takes into account Plant Operations and Health and Safety

procedures;

Tie-ins are properly co-ordinated with planned plant shut-downs;

Non-disruption of the operating facility.




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3.0 PROJECT EXECUTION PLAN OBJECTIVES

3.1 Objective of the Project Execution Plan

This Project Execution Plan:

• Details the project scope, structure, and approach;

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• Provides the mechanism for defining to the Project Team the project scope, execution

methodology, schedule and budget prior to work commencing;

• Facilitate the briefing of project personnel and provide them with a guideline for their role in the

execution of the project.

3.2 Project Execution Plan Ownership, Maintenance, Distribution and Control

This Project Execution Plan is a “living document” and should be revised through the project if

necessary. The Project Execution Plan is the responsibility of the Project Manager. The project

management team from Discipline Lead level and above are required to be familiar with this plan and

ensure their project subordinates understand and comply with project procedures that are

relevant to their role.

For the purposes of review and improvement the project Plan is to be distributed to the following

project personnel for comment:

• Kinross Project Manager

• Toronto Engineering Manager

• Belo Horizonte Engineering Manager

• Project Coordinator

• Procurement Manager

• Construction Manager

• Toronto Project Controls Manager

• Belo Horizonte Project Controls Manager

The above listed are responsible for soliciting comment from their project subordinates.


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3.3 Reference Documents



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The following hierarchy applies to key Project procedural requirements:

1. Kinross Gold Corporation - SNC-Lavalin Contract;

2. Project Execution Plan;

3. Project Instructions Manual;

4. SNC-Lavalin Corporate Best Practice Procedures.

There are also a number of “free standing” plans that are to be read in addition to this document that

provide more detail in key areas of the project execution. These are listed below:

Document No.334572-0000-68AG-0001334572-0000-30AG-0001334572-0000-50AG-0001334572-0000-60AG-0001334572-0000-32AG-0001

TitleHealth & Safety Plan Project Instruction Manual Procurement Execution Plan Construction Execution Plan Project Controls Plan

Note: Items that are underscored in different coloured text are hyperlinked to other parts of the

project or this document. The primary hyperlinked location is the project PDM website.

Hyperlinks may not work if you do not have appropriate access rights to the location being

linked.

3.4 Confidentiality

A confidentiality agreement has been entered into between Kinross Gold Corporation and

SNCLavalin Inc.

All Project team members are required to respect the confidentiality of the technical and

commercial information related to the Project. Specifically there will be no discussions or

communication of any Project issues with personnel/organisation outside of the Project team

unless authorised by Kinross Gold Corporation.

Further details of the confidentiality requirements of the Project, including distribution of

confidential information, are detailed in the Contract and individuals are required to consult their

supervisor if they are unsure of the confidentiality requirements.


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4.0 DETAILED SCOPE OF WORK

4.1 Physical Facilities Scope



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The additional Ball Mill will require upgrades of the following physical plant:

• Power supply;

• Mill building;

• Cooling water (if required);

• Control systems and instrumentation;

• Grinding Circuit Process equipment such as the Ball Mill, Cyclones, Cyclone Feed Pump, and Jig

Feed Pump.

4.2 Battery Limits of Facilities Scope

• Process - Limited to the Process Flowsheet connections specified on the Mill circuit flow sheets

for Plant 2.

• Mechanical - Limited to equipment required to satisfy the upgrade of the new Ball Mill Circuit;

• Electrical - Connection of supply at Paracatu Site Boundary (note the new Ball Mill is15MW);

• Instrument - Limited to instruments directly associated with the new circuit and their connection

to the existing control system, and their configuration in the control software. If upgrades to the

control system I/O capacity or power supply are required due to the added instrumentation these

will also be in the project scope;

• Civil - Limited to the Plant 2 Mill building;

• Structural - Limited to the Plant 2 Mill building.

Facilities Excluded:

• Plant 1 works;

• Flotation;

• Mine Operations & Mine infrastructure;

• Run of Mine (ROM) ore supply and stockpile management;

• Tailings containment dam;




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• Existing equipment not related to the grinding circuit;

• Offsite infrastructure including roads and power supply.

4.3 Overall Services Scope

4.3.1 Engineering

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Engineering Services are required starting at the delivery of Basic Engineering, through to

Detailed Engineering packages up to and including negotiation with equipment vendors and

construction contractors. Once construction has commenced, engineering support will be

required throughout the construction phase of the project. The engineering support will resolve site

changes or other issues relating to the implementation of the design.

Wherever practical the services will draw on existing knowledge and documentation from the

previous Expansao III project. It is understood that as-built drawings for the existing plant are up to

date and available.

The engineering team will confirm with a client nominated technical representative the adequacy of

existing machinery used in Plant 2. If there are no significant issues discovered then existing design

specifications will be used “as is” for procurement of new similar equipment of the same type. Where

inadequacies are discovered the existing specifications will be revised accordingly.

4.3.2 Procurement

Procurement Services will be provided. This will start at soliciting of bids based on packages

supplied by engineering through to expediting materials to their delivery at the site storage area at

Paracatu, with SLI acting as agents of RPM.

Placement of purchase orders will be by RPM. This is to ensure that there is no doubt from a

governance or tax perspective that it is the RPM business entity at Paracatu that is undertaking the

project.

For the purposes of the allowance made in this proposal, it is expected that the procurement

processes will operate in a similar fashion as experienced by SLI on previous projects, and a

similar level of effort is required. The detail of operation needs to be agreed early in execution.

Any unusual aspects arising from this project or location will require review or negotiation of

EPCM scope.




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Negotiations with selected vendors after technical and commercial bid evaluation and

recommendation will be done jointly by the SLI Team that prepared the Bid Package and RPM

Team. SLI shall then provide a Purchase Order and submit to RPM for actual placing of POs.

4.3.3 Construction Management

Construction Management Services will commence with Construction Scheduling and Planning

activities early in the EPCM phase and continue through to Commissioning assistance to

Paracatu operations.

The Construction Management team will be required to interface with the Kinross RPM

Construction “owner’s team” located at Paracatu.

Construction Management will be responsible for the supervision of construction contractors and

materials management on site. This supervision will commence at mobilization of construction

contractors and continue to mechanical completion which includes pre-operational testing of

equipment and systems..

Senior process supervision will be provided on site during the commissioning phase. The

commissioning will be led by the nominated Process Leader for the project. He will be assisted by

the senior process consultant.

Construction services by SLI/SLM at site will include providing CM team office accommodation and

communications infrastructure (up to the point of connection to broadband connection

provided by RPM) and support for the duration of the project.

4.3.4 Safety

See section: 9.0 Health, Safety and Environment

SLI has corporate minimum standards for safety. The RPM Safety Program for the project will be

developed jointly and in consultation with SLI.

RPM will provide overall Safety management at the site and will specify safety procedures to be

followed. However, the Construction Manager shall ensure compliance of Construction

personnel in accordance with, and subordinate to, site safety leadership provided by RPM.




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4.4 Detailed Services Scope and Deliverables

4.4.1 Project Management

• Prepare project execution plan;

• Prepare baseline schedule and updates;

• Prepare weekly and monthly project progress and forecast reports;

• Implement & maintain project cost control system;

• Estimating & trending;

• Implement & maintain project document control system;

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• Develop document control interface & transfer process between SLI PM+ and RPM/Kinross

“Skire” system. Initially this process will be manual, but project scope may be added to make this

a semi-automated process;

• Support RPM safety manager in creating safety plan and achieving project safety objectives;

• Overall supervision & responsibility for EPCM project staffing & resourcing;

• Participation in project steering committee.

• Project Close-Out report.

4.4.2 Engineering

4.4.2.1 Process Engineering and Layout

• Process flow sheet for Mill Circuit “Issued for Design”. Note that this will be a revision of flow-

sheets produced by the current study phase;

• Mass Balance for the Mill Circuit “Issued for Design”;

• Plant layout drawings;

• Piping and Instrumentation drawings review;

• Process equipment list;

• Process equipment specifications;

• Process equipment sizing calculations;

• Process equipment data sheets;

• Equipment procurement packages/ vendor document & data lists;


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• Technical bid evaluation;



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• Commissioning plan and checklists;

• Assistance with commissioning plan & operations hand-over.

4.4.2.2 Mechanical and Piping Engineering

• Mechanical and Piping drawings (2D);

• Mechanical equipment;

• P&IDs;

• Valve List;

• Line list;

• Mechanical equipment sizing calculations;

• Mechanical equipment specifications;

• Mechanical equipment data sheets;

• Equipment procurement package scopes of work and information required for requests for inquiry

such as vendor document and data lists;

• Update Piping specification where required;

• Piping MTOs;

• Pipe supports and Hangers;

• Request For Inquiry packages;


• Technical support for installation & commissioning.

4.4.2.3 Civil, Concrete and Structural Engineering

• Civil and Structural plans & elevations;

• Civil and Structural typical details drawings;

• Excavation, Earthworks and drainage drawings;

• Structural, civil and earth works materials quantities;

• Structural, civil and earth works calculations;

• Civil and Construction contractor enquiry package;




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• Assist general contractor with location and services design for temporary construction facilities.

4.4.2.4 Geotechnical Work

• Review of current geotechnical work and extension of hole coverage;

• Review of geotechnical reports;

• Foundation design recommendations for the new Ball Mill and Building extension.

4.4.2.5 Building Services

• Heating, Ventilation and Air Conditioning calculations (primarily for switch room modifications);

• Equipment Specifications;

• Equipment data sheets.

4.4.2.6 Electrical

• Electrical Line Diagrams;

• Hookup diagrams;

• Electrical equipment list;

• Load and short circuit studies / calculations;

• Electrical equipment sizing calculations;

• Switch room layouts / upgrades drawings;

• Cable lists and material quantities;

• Electrical equipment data sheets;

• Electrical Equipment procurement packages/scopes of work/vendor document and data lists;

• Electrical scope for the MPEI Contractor enquiry package;


• Assist RPM with price negotiation;

• Technical assistance with commissioning plan and construction support.

4.4.2.7 Instrumentation & Control

• Piping and Instrumentation drawings;


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• Loop diagrams;

• I/O lists;



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• DCS/Control system configuration;

• Instrument list;

• Cable lists and material quantities;

• Instrument data sheets;

• Instrument specifications and Enquiry Packages;

• Technical bid evaluation.

4.4.3 Procurement

• Procurement Plan;

• Logistics and materials management plan;

• Enquiry templates;

• Construction contracts preparation and management;

• Creation and maintenance of the procurement packages in the project schedule;

• Issue procurement enquiries (physical equipment, services & construction contracts) and receipt

of bids;

• Commercial bid evaluation;

• Provision of purchase order documentation to enable Purchase Orders to be placed by RPM;

• Expediting of contracts;

• Price negotiation support for Kinross RPM price negotiation team;

• Materials shipping logistics;

• Warehousing and stores control at site.

Note: A project warehouse facility will be provided by RPM at site; however the project team will be

responsible for management of the facility.




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The contracting strategy for this project will be based on major contracts awarded to construction

contractors who have direct experience and proven competence in similar Brownfield

construction contracts in Brazil.

The following general strategy will be further detailed and refined by the Construction

Management Plan:

• Construction Management Plan and Construction Scheduling;

• Development of the Contracting Strategy;

• Day-to-day planning, supervision and co-ordination of construction contractors;

• Implementation of site Safety policy and directives. Note - a SLI Safety Manager will be provided,

and two SLI Safety Superintendents assigned to site, however overall safety management is to

be led by RPM;

• Leadership of tool-box talks and construction co-ordination meetings;

• Measurement and reporting of construction progress;

• Area/discipline engineering support/feedback from site;

• Construction site control;

• Site personnel mobilization, induction, and support;

• Prepare enquiry package for the provision of Construction Management offices and site facilities;

• Liaison with RPM Construction Manager for operations interaction;

• Supervision for pre-commissioning and commissioning;

• Support for “As-Built” design documentation services. Note: the construction contractor will mark-

up the drawings. SLI can provide back-drafting and re-issue but this has not been allowed for in

the proposal. This is expected to be negotiated once the scope for “as-built” is better understood.

4.5 Services Scope Exclusions

• Procurement of the 3rd Ball Mill, this is currently being managed by Kinross;

• Placement of purchase orders;

• Environmental investigations, licensing/permits;




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• Investigation or engineering works beyond the scope required to install and operate the Ball Mill

Circuit (note: this is currently being addressed in the separate scoping study);

• Upgrades or modifications to public transport corridors, roads, and utilities such as power, water

and communications outside the Plant 2 Mill Area boundaries;

• Services related to the mine, mine plan or mining;

• Geotechnical or survey works beyond that required for the new Ball Mill or Building extension.

Geotechnical drilling itself is not included, and will be contracted out to an appropriate service

provider.

• Any services relating to, or derived from separate environmental impact assessment studies or

environmental management.

4.6 Division of Responsibilities

X - Primary, O - Support

Facility, Service or Work ActivitySNC-Lavalin Toronto (SLI)

Responsibility

SNC-LavalinBelo Horizonte Owner

(SLM)

Basic Engineering

Layout X O

Layout Review X O O

Plant Capacity O O X

Site Conditions O O X

Process Design Criteria X

Discipline Design Criteria X O

Finalize Process Flow Sheet and Mass Balance X O O

Process Control Description X O O

Equipment List and Sizing X O O

Integrated Project Plan X O O

Project Schedule Levels 1 - 3 O O

Block Flow Diagrams (BFDs) X

Process Flow Diagrams (PFDs) X O

Utility Flow Diagrams (UFDs) X O

Piping and Instrument Diagrams (P&IDs) X O

Electrical Single-line Diagrams (SLD’s) X O

Specifications and Datasheets X X




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Facility, Service or Work ActivitySNC-LavalinToronto (SLI)

Geotechnical Survey X

Geotechnical / Foundation Specifications X

General Arrangement Drawings X

Set up Management System (PM+) X

Detail Engineering

Instruments Specifications and Location O

Finalize P&IDs - Instrument List Development O

HazOp X

Mechanical Drawings IFC O

Electrical Drawings IFC O

Civil/Structural Drawings IFC O

Architectural Drawings IFC O

Instrumentation/Control Drawings O

Control System Configuration/Programming

Requisitions and Bid Analyses X

Recommendation to Purchase Stage O

Vendor Drawing Approvals X

Control Methodology and Functional Description X

Slurry Hydraulic Calculations X

Piping Design X

Design Reviews X

Procurement

Procurement Plan O

Logistics and Materials Management Plan

Enquiry Templates

Creation and Maintenance of the ProcurementSchedule

Issue and Receipt of Procurement Enquiries

Technical Bid Evaluation O

Commercial Bid Evaluation and Recommendation

Final Price Negotiation O

Placement of Purchase Orders

Vendor Data Review O

Expediting

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Responsibility


(SLM)

O X

O

O

X

X

X X

X

X

X

X

X

X

X

X

X

O

X

X

X X

X

X

X O

X

X

X

X O

O X

O X

X O

X




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Facility, Service or Work ActivitySNC-LavalinToronto (SLI)

Shipping Logistics & Warehousing (note:Warehouse Facility provided by RPM)

Implement PM+ Procurement Module

Construction Management

Construction Management Plan

Construction Contracting Strategy

Quality Control and Quality Assurance

Cost Reporting

Construction Scheduling

Day-to-day Planning, Supervision andCo-ordination of Construction Contractors

Implementation of Site Safety Policy and

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Responsibility


(SLM)

X O

X

X

X O

X

X

X

X O

Directives

Leadership of Tool-box Talks and Construction Co-ordination Meetings

Measurement and Reporting of Construction Progress

Discipline Site Engineering

Construction Site Controls

Site Personnel Mobilization, Induction, and Support

Liaison with RPM Construction Manager for Operations Interaction

Commissioning Plan and Checklists

Support for “As-Built” Design Documentation Services

Commissioning/Start-up

O X O

X O

X

O X

X O

X O

X O

O O X

X

O O X

Reports and Manuals

Operating Manuals and Vendor Warranties O X

Final Report X X

4.7 Third Party Input List

• None Identified.


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5.0 EXECUTION STRATEGY

5.1 Project Objectives



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The Kinross Gold Corporation business objectives are:

• Maintain Plant Production Capacity as the Mine moves into harder ore bodies;

• Maintain or improves the opportunities for this plant to be expanded / upgraded in the near term

future;

• Learn from the previous Expansao III project and ensure the current design is an improvement in

the areas of efficiency, operability and maintainability.

The key objectives of the Project are:

• To deliver a safe facility with no HSE incidents during the course of the Project;

• To integrate the new plant activities into the existing site operations in order to minimise operating

and fixed costs;

• 3rd Ball Mill ready for operation December 2010.

5.2 Execution Strategy

This project is primarily schedule driven and being executed using a “Fast Track” approach.

5.2.1 Engineering

This project will have overlapping Basic Engineering and Detailed Engineering design phases as well

as overlap with Construction. The overlap is required due to the “Fast Track” execution

strategy for the project. This is required to achieve early mobilization for critical path works.

This overlap may create some execution inefficiency from the engineering perspective; however the

benefits expected from meeting the Mill operating date are expected to outweigh engineering costs.

In particular some civil and structural construction will be required to be undertaken prior to the

finalization of basic and detailed engineering for the entire plant.

“Fast Track” creates some risk of re-work, and forces early completion of some aspects of the

design that may have better technical solutions that could be discovered through the more




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conventional phased approach of engineering. Where this occurs the engineering for early

works will be conservative and accommodate most reasonable options that could be required that

may be unknown at the time of the early works.

5.2.1.1 Basic Engineering

Basic Engineering will be executed from SLI’s Toronto office. During this time the Belo

Horizonte (SLM) Engineering Manager and Lead Civil/Structural Engineer will be based in the

Toronto office. The goal is to ensure design concepts from Basic Engineering are well

understood across the discipline team, and ensure a smooth the transition of design hand-over

between the two locations. The Process, Layout, Piping, and Mechanical Leads will be Toronto (SLI)

based personnel.

5.2.1.2 Detailed Engineering

Detailed Engineering will be executed from the Belo Horizonte (SLM) office.

SLI’s Process, Layout and Mechanical Leads will work with SLM when the Basic Engineering

package is transitioned to the Detailed Engineering team in SLM-Belo Horizonte. They will

remain in Belo Horizonte until they have ensured that SLM’s assigned Process, Layout, Piping,

Electrical and Mechanical Leads, understand the concepts and any critical areas of the design. They

will establish relationships and lines of communication to ensure that future issues can be readily

resolved as Detailed Engineering progresses.

After the initial visit SLI’s team will review the design on an ongoing basis and lead formal design

reviews at 30% and 80% completion of engineering.

5.2.2 Procurement

Procurement will be lead from the Belo Horizonte office, with SLI acting as agent for RPM.

RPM has a procurement department in Belo Horizonte. The Procurement Plan and Materials

Management plan will be developed with review and input from RPM. There is likely to be a

requirement to account for Brazilian taxation impacts when developing the plans. A site based

Procurement team (Person) will be mobilized at an appropriate time as materials begin to arrive

on site.




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Contracting Administrator will be mobilized at the beginning of the project in order to work on the

contracts’ formation. This professional will be first located at Belo Horizonte office and after that he

will be transferred to the site to follow with the contracts’ administration.

A construction kick-off meeting is conducted with each successful Contractor to review the

Project HSE policies, performance objectives and program standards and safe work processes.

Each Contractor is required to conduct a hazard assessment of the construction site prior to set

up and starting work activities on the site. Each Contractor’s compliance with the Project HSE

Plan is regularly audited by the HSE Manager and is also monitored by the Construction

Coordinator. Audits include an evaluation of program documents and records, observation of

compliance with safe work processes and interviews with line management and workers. The

Construction Manager is advised of any non-compliance(s) and requests the designated

contractor to review and initiate corrective action. Non-compliance is documented in each

Contractor’s project file.

On a weekly basis, each Contractor submits a Contractor Weekly HSE Performance Report

detailing site statistics and the HSE program activities completed. Documentation records

include; orientation sessions, safety meetings, hazard assessments and inspections which are

attached to the weekly report. A Contractor Monthly HSE Performance Report is also prepared and

issued by each Contractor.

On a weekly basis each Contractor submits a Contractor Weekly Status and Performance report

detailing the previous week quantity installation, job hours earned versus job hours expended, percent

progress, issues and actions, as well as written account of accomplishments for the

week and forecasted accomplishments for the next week. The format of this report is defined by

Kinross in the contract appendix.

On a monthly basis the contractor’s will provide the following at a minimum:

• Construction progress curves (by account and area if required);

• Manpower Histograms (by account and area if required);

• Equipment Utilization plan;

• Update of Construction schedule;


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• Installed quantity curves;



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• Analysis of contractor performance and report variance against baseline;

• Analysis and reporting of contractor’s productivity performance index (CPI) and schedule

performance index (SPI);

• Monthly report;

• Track, process and analyze changes and deviations to scope;

• Track, process and analyze rework;

• Track and report system turnover completion status.

Each Contractor maintains a complete set of work practices and safe work procedures for the

required scope of work. The completeness of these documents is verified during the pre-award

meeting with each Contractor.

5.2.2.2 QA/QC

Field engineering is directly responsible for quality assurance and the construction field

engineers are directly responsible for quality assurance / quality control of the work to ensure

conformance with applicable standards and the design requirements.

For overall QA/QC co-ordination and compliance an on-site Construction Coordinator reports to the

Construction Manager with a functional responsibility to the Quality Assurance Manager.

5.2.2.3 Expediting

Expediting will be undertaken by SLM. One expeditor located at Belo Horizonte office will work full

time in order to guarantee that materials and equipment arrive on site as scheduled.

Logistics and Inspection will be conducted an appropriate time as soon as the suppliers are

defined.

The Expeditor is responsible for monitoring the fabrication schedule, verifying inspection and test

‘hold-point’ dates and for the co-ordination of the required inspection visits with the Inspector assigned

to the package.

The Expeditor is also responsible for the timely submission of all vendor provided deliverables as

defined in the purchase order. These deliverables include contractual documentation such as




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the return of signed purchase order acknowledgements, valid bank guarantees and performance

bonds, etc., engineering drawings and technical documents, material test certificates, final

certified drawings and the appropriate installation, maintenance and operating manuals.


The Construction Manager will be identified early in the EPCM execution and commence

construction planning from the Belo Horizonte Office.

Just prior to mobilization of the site construction team the Construction Manager will relocate to the

Paracatu site.

The Discipline Supervisors for the Construction Management team will be selected from the

Detailed Design team early in the Detailed Design phase. They will be relocated to the Paracatu site

as part of the Construction Management team mobilization.

Other Construction Management team personnel will be mobilized directly to site.

5.2.4 Overall Project Management

The overall Project Management will be led from the Toronto office.

The Project Manager will initially be based at in Toronto but relocate to Belo Horizonte at the time

of transition to Detailed Engineering.

The initial set-up of Project Controls and Administration will be led by the Toronto based

personnel.

When the Detailed Design commences, the day-to-day administration and control will be

transferred to the Belo Horizonte office.

It should be noted that there is a requirement to run two separate invoicing systems for the life of the

project, one for off-shore (Toronto) services and the other for on-shore (Belo Horizonte/

Paracatu based) services. The Project, however, will be controlled and reported as a single

SNC-Lavalin entity to RPM.


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6.0 SCHEDULE

6.1 Critical Success Factors



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• Early freezing of the design and commitment to procure long lead items;

• Rapid and clear communications lines between stake-holders;

• Clearly defined roles and responsibilities for project team members both within SLI and between

SLI and Client;

• Definition and implementation of HSE plan prior to construction mobilization;

• The quality and continuity of the project team through the project phases;

• Minimisation of change.

6.2 Critical Schedule Activities

The following activities are deemed critical to achieving Project schedule:

• All stakeholders should be involved and aligned early (i.e. integrated team approach). This will be

achieved through a Kinross led formal planning session in February 2010;

• Identifying what documentation can be replicated from existing designs and what new

documentation is required;

• Long lead items should be ordered early;

• Contracting strategy should be chosen to avoid tendering delays;

• Driving design by constructability and operability requirements to avoid delays and modifications.

6.3 Project Schedule

The preliminary schedule is attached at Appendix A - Baseline Schedule

6.3.1 Critical dates/milestones and Critical Path items.

MS0020 Award of Overflow Launder Contract 15-Jan-09

MS0010 Start Basic and Detailed Engineering 01-Feb-10

MS0015 Finalize Preliminary Layout 26-Feb-10




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MS0018 Report of Boreholes - Preliminary Geotechnical Report 28-Feb-10

MS0019 Ball Mill Vendor Certified Drawing 28-Feb-10

MS0075 Deliver Ball Mill Sole Plates 30-Mar-10

MS0040 Award of Civil (Earthworks & Concrete) Contract (Pkg. CEC-01) 23-Apr-10

MS0080 Start Delivery of Ball Mill Components 30-Apr-10

MS0050 Award of MEPI Contract by Owner (Pkg. MEC-02) 14-Jun-10

MS0070 Critical Engineering - Substantially Complete 14-Jun-10

MS0090 Complete Concrete Works 30-Aug-10

MS0100 Complete Delivery of Equipment/Materials 06-Nov-10

MS0110 Project Mechanical Completion 31-Dec-10

6.3.2 Significant Constraints

The plant will have a number of shutdowns through 2010. Construction activities will need to be

coordinated with plant operations for access during shut windows.

The wet season broadly occurs through the summer (southern hemisphere) months however this is

not anticipated to significantly affect the construction activity as foundation preparation is

largely scheduled for the dry season.

6.3.3 Long lead items that are critical to the schedule

• Slurry pumps

• Hydroclyclones


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• VFDs

• Switchgear

• Transformer

6.3.4 Milestone Schedule



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See: Appendix A - Baseline Schedule

6.3.5 Client Kick-Off Meeting

Client kick-off meeting minutes are located at: https://pm-

gp.snclavalin.com/sites/Paracatu/admin/Documents/30/30PMC/MC

6.3.6 90 Day Early Work Plan

See document: ..\SA-Schedules\Paracatu EPCM 90-Day Plan.pdf located at the PDM site

(linked above)

6.3.7 Key Reviews

• HAZOP

• Basic Engineering Handover Review

• 80% Review

• Constructability Review

• Risk Identification and Assessments


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7.0 PROJECT ORGANIZATION

7.1 Organization Chart



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7.2 Roles and Responsibilities - SNC Lavalin Team

7.2.1 Common Responsibilities

Each manager/supervisor is directly responsible for:

• Quality of the output of their organisation;

• Implementation of the Project Execution Plan;

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• Ensuring project procedures detailed in the Project Instruction Manual are accurate and

properly applied;

• Ensuring that personnel under their direction are qualified to perform the tasks assigned;

• Training personnel under their direction in the applicable project policies and procedures

as written in this Project Execution Plan and the Project Instruction manual;

• Monitoring the performance and progress of their organisation’s activities and

implementing corrective actions, as required, to meet project objectives;

• Ensuring a safe work environment utilising training and safety awareness.

7.2.2 Specific Project Team Member Responsibilities

7.2.2.1 Project Sponsor

The Project Sponsor represents company management. The Sponsor provides guidance to the

project team to ensure that the project meets Kinross Gold Corporation’s objectives. The Project

Sponsor maintains frequent contact with the Kinross Gold Corporation and assists the Project

Manager in resolving contractual issues. The Project Sponsor also works closely with the

Project Manager to ensure that key technology and bidding strategy are properly transferred to

the Project Team.

The Sponsor also has responsibility to ensure the Project Manager is implementing Peer Review

Action Items on a timely basis.

7.2.2.2 Project Manager

The Project Manager has the overall authority and responsibility for execution of the project in

order to produce all work safely, with quality and within budget and schedule in compliance with

contractual terms and conditions, as well as company policies. The Project Manager is the

primary contact with the Kinross Gold Corporation on matters relating to the project. He reports

to the Project Sponsor on progress of the project, safety performance, quality, budget,

schedules, changes that necessitate contractual modifications, procedures, and status of

customer relations.




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Specific responsibilities of the Project Manager include:

• Leading the HSE program for the project;

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• Directing and managing the Project Team for the execution of the Project scope of work;

• Managing the handover from proposals, project initiation and team mobilisation of the

Project;

• Management of the workscope and the Change Management Process;

• Monitoring, reporting and controlling project costs and schedule through all phases of the

Project;

• Reporting of the Project, both to the stakeholders and SNC-Lavalin management;

• Administering the project in accordance with the requirements of the Contract and the

Project Administration procedures;

• Managing the interfaces with the stakeholders and within the project team;

• Managing the project turnover, lessons learned and Project closeout.

7.2.2.3 Engineering Manager(s)

The Engineering Manager is the principal member of the Project Manager’s engineering staff

and, as such, assist the Project Manager in the management functions of the project delegated to

them. The primary responsibility for the Engineering Manager is for the development,

execution, supervision, and coordination of all technical aspects of the work safely, with quality and

within schedule and budget objectives. The Engineering Manager also ensures that the customer

criteria and scope of work are being met by all engineering disciplines. The

Engineering Manager is functionally responsible to the Project Manager.

Specific responsibilities of the Engineering Manager includes:




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• Performing project or task management functions as delegated by the Project Manager,

including customer liaison, coordination of technical meetings, and general project

supervision and coordination;

• Assisting the Project Manager in the project initiation activities and in preparation of the

Project Execution Plan;

• Leading the development of the schedule and budget establishment for engineering and

to control, monitor and report engineering performance against budget and schedule;

• Managing engineering activities to ensure compliance with the Scope of Work and quality

objectives of the project;

• Leading and coordinating all technical reviews both with stakeholders and internally

within the project;

• Coordinating between engineering and procurement and between engineering and

construction;

• Enforcing the management of project change process within the technical team.

7.2.2.4 Project Coordinator

• Develop and maintain the Project Instructions Manual;

• Ensure proper liaison, communication and coordination between the disciplines and

locations;

• Identify and rectify gaps between project procedures;

• Develop project specific procedures where Global Procedures cannot be applied or do

not exist - note Project Manager and QA Manager approval is required for any changes

to company standards and procedures;

• Manage the Technical Query process;




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• Ensure the PDM site is properly used and maintained by the project team;

• Focal point for project administration;

• Create and coach the team through the 90-day plan;

• Accountable for ad-hoc and non-controls reports;

• Identifying and planning for training requirements of personnel and project specific

inductions;

• Responsible for the “administrative quality” of the project.

7.2.2.5 Project Controls Manager

The Project Controls Manager (PCM) oversees the work of the Project Cost Engineer, Project

Planner/Scheduler, and Project Estimator. The PCM is responsible to the Project Manager for the

quality, timeliness, and content of the effort carried out by these project support personnel, together

with:

• Development of the Project Controls Plan;

• Preparation of Kinross Gold Corporation and internal project reports;

• Preparation of the Project Internal Monthly Review report and input to the MFL database;

• Establishment of the project staff-hour control system and maintenance of the staff-hour

control system;

• Establishment of the project cost control system;

• Take the role of the Project Risk manager (Toronto);

• Establishment of the project work breakdown structure (WBS) and commodity codes with

input from Kinross and project team.




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7.2.2.6 Project Cost Engineer

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The Project Cost Engineer is responsible to the Project Controls Manager. Specific

responsibilities of the Project Cost Engineer include:

• Reporting to the Project Manager all sources of contract expenditures against the

appropriate budget allocations for the specific project;

• Forecasting the anticipated final project costs for the approval of the Project Manager

using reports and analyses of the staff-hour reports, financial commitments and field

progress evaluations;

• Preparing all necessary cost reports for the customer and the Project Manager;

• Reviewing all Kinross Gold Corporation billings prior to submission to the Project

Manager and Kinross Gold Corporation;

• Analysing contract documents to ensure complete knowledge of SNC-Lavalin’ obligations

so that contract scope changes can be recognised, isolated, and reported to the Project

Manager for appropriate action. This responsibility extends to both home office and field

change orders;

• Maintaining the Change Request Register utilising the project Change Management

process;

• Managing the project trend register and to report on trends to the Project Manager.

7.2.2.7 Project Planner

The Project Planner is responsible to the Project Controls Manager. Specific responsibilities of the

Project Planner include:

• Developing and maintaining the project schedules including the Level 1 Milestone

Summary Schedule, Level 2 rollup schedule, Level 3 Integrated Project Schedule and 90 day

detailed Project Execution schedule;




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• Monitoring project progress, status of the schedule and reporting on progress. This

applies to both home office and field activities;

• Identifying trends or potential slippages and report on these to the Project Manager and

the Project Controls Manager;

• Producing regular reports on progress against schedule.

7.2.2.8 Project Procurement Manager

The Project Procurement Manager reports to the Project Manager and is responsible for the

management of all material management and contracting activities. The Project Procurement

Manager has the overall responsibility for the delivery of purchases and contracted works within the

budget and schedule requirements of the project and compliance with the specified quality. Specific

responsibilities of the Project Procurement Manager include:

• Establish and issue of the Project Procurement Plan, the standard Terms and Conditions,

the approved vendor and subcontractor list;

• Issue and maintenance of the Project Procurement Status Report and Project Contract

Plan;

• Implementation and operation of the Project Materials Control System (MCS);

• Enquiry, commercial evaluation, recommendation for award, management and closeout

of all purchase orders and offsite fabrication contracts;

• Enquiry, commercial evaluation, recommendation for award and handover to construction

of all on site contracts;

• Expediting of all purchase orders and off site fabrication contracts;

• Inspection of all purchase orders and off site fabrication contracts;

• Management of the release, freight, customs clearance and goods reception of

purchased items to site.


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7.2.2.9 Lead Engineers



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A Lead Engineer is the leader on the project for the specific discipline he represents. He reports

functionally to the assigned Project Engineering Manager and has technical quality, coordination, and

production responsibility for all work in his discipline on the project. He is administratively

responsible to his Departmental Engineering Manager in the Engineering Department to ensure the

technical adequacy and quality of all work produced by his staff. He is responsible for

performing engineering on the project as required for his discipline; and for the supervision of

personnel assigned to him and engaged in engineering, design, and other work pertinent to his

assigned duties. These duties include proper coordination with other disciplines and on-

schedule in-budget completion of all assigned work.

7.2.2.10 Construction Manager

The Construction Manager is responsible for the complete administration and organisation of

construction and field personnel and directs the field effort through the activities of his staff. He

reports directly to the Project Manager. Specific responsibilities of the Construction Manager

include:

• Leading the management of HSE in the field;

• Assisting in developing the Construction portion of the schedule for the project;

• Supporting the design process phase through constructability reviews, risk and

opportunity reviews;

• Participating in the development of the contracting plan and participating in contract

enquiry package development and bid reviews;

• Developing of the site resourcing plan and selecting/mobilising the Construction

Management Team;

• Establishment of the project site facilities;

• Managing and administering of the site contracts to achieve safety, quality, budget and

schedule objectives;




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• Commercial administration of the contracts;

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• Managing interfaces on site including between contractors, and between Construction

and Operations;

• Testing and Completion of construction;

• Handover to Commissioning and/or Operations;

• Commercial closeout of contracts.

7.2.2.11 Project Quality Manager

The Project Manager is responsible for implementing the Quality Program and Quality Plan on the

project.

The Project Quality Manager is responsible for development of the Quality Program and for the

independent surveillance and audit of the project for compliance with procedures and

requirements, as well as the documentation of compliance and corrective actions. The Project

Quality Manager performs these activities independent of the design group responsible for the work.

The Project Quality Manager works closely with the Project Manager and advises him of the status

of quality-related activities.

7.2.2.12 Special Project Interface Requirements

The SNC-Lavalin engineering team for this project will be split between Toronto, Belo Horizonte and

Site. This will require that proactive planning is required to deal with inter-team

communications. Apart from the physical separation of the offices there are also time-zone

language and organizational differences between the locations.

Other design organisations undertaking activities which feed into our work scope definitions.

• Metso

• RME




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Both Metso (Mill supplier) and RME (Liner handler supplier) also have location and timezone

issues to overcome.




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8.0 ADMINISTRATION AND COMMUNICATIONS

8.1 Project Instruction Manual

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Administration for this project is detailed in the Project Instructions Manual 334572-0000-30AG-

0001

The Project Instruction Manual is the comprehensive reference for all administrative processes that

apply to this project, and is the main source of administrative guidance for project

employees.

The Project Coordinator is responsible for identifying administrative requirements for the project and

developing solutions for issues that are not completely addressed by Global Quality

Procedures. The Project Coordinator is also responsible for tailoring SLI Quality Procedures to the

specific requirements for the project.

8.2 Communications Plan

Information needs to be administered efficiently and communicated to team members,

customers and other project stakeholders in a timely manner. Project communications

management provides the framework and critical links among people, ideas, and information that are

necessary for project success. The requirements for project communications must be clearly

established at the start of any project. It needs to address information content, format and

timing. The compilation and communication of all information, including engineering documents, must

be effectively managed throughout the implementation of any project to ensure a seamless and

problem free transition to subsequent phases with minimum effort and delay.

8.2.1 Kinross’s Skire Unifier System

Kinross is in the process of implementing a client-side web-based software to enable them to

better manage their roster of projects.

The Skire system has a platform for document control and project controls, and is intended to be

Kinrosss storage and transfer location for most official project documentation. The system is still being

developed and this will be the first external project where Kinross will be using this system. As

procedures are developed that affect the SNC-Lavalin project procedures they will be

included in the Project Instruction Manual.




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Most inter-company formal document and communications exchanges are expected to involve

Skire as the system is implemented.

8.2.2 Formal Lines of Communication

The following formal lines of communication will be used for the Project:

Subject Corresponding PartiesSNC-Lavalin Kinross

Formal Contractual Issues

SNC-Lavalin Project Kinross Project Sponsor

SponsorMark Isto

John Lindsay

Key Technical Issues andDecisions SNC-Lavalin Kinross Engineering

Engineering Manager Manager

Gilberto Antonini (Basic Wayne Phillips

Engineering

Alberto Dantas (Detail

Engineering)Procurement Issues

SNC-Lavalin Kinross Procurement

Procurement Manager Manager

Eder Castro Fausto Casar

Operations Issues

SNC-Lavalin Kinross Operations

Engineering Manager Manager

Site Issues

SNC-Lavalin Kinross Construction

Construction Manager Manager

Antonio Bernardes Jose Mauro

Copies

SNC-Lavalin Project Manager

John Robinson

Kinross Project Manager

Tim Dake

SNC-Lavalin Project Manager

Kinross Project Manager

SNC-Lavalin Discipline Leads Kinross Discipline Leads

SNC-Lavalin Project Manager Kinross Project Manager






Any instructions issued by the Project team to a third party offering advice/clarification/ decisions or

recommendations which may have a cost or schedule impact on the Project will only be

issued by the Project Manager.


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8.2.3 Email Communication



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Email will also be used as a communication method for the project. However, it shall not be for

formally agreeing key project scope or contractual actions. These will be done via formal project

controls procedures covered, or via a formal technical query process. Once enabled Kinross’s

Skire system will be used to capture, distribute and revert these types of communications and

agreements.




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9.0 HEALTH, SAFETY AND ENVIRONMENT

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The SNC-Lavalin corporate policy for Health, Safety and Environment stand to encompass the WE

CARE philosophy of management.

The SNC-Lavalin project manager shall ensure that the SNC-Lavalin Policy objectives are

outlined at time of induction for all employees and contract personnel, and displayed at all safety

notice boards and Site Office areas.

In Brazil Health Safety and Environment is covered and the terminology of “Safety and Security”.

The Plan than addresses health Safety and Environment is called the “Safety, Environmental, and

Health Management System”.

The successful implementation of the Safety, Environmental, and Health Management System is a

key element in the safe execution of Paracatu 3rd Ball Mill Project.

9.1 Ownership

RPM site management is the owner of all HSE issues at site, and bears ultimate responsibility

for procedure and control. However for this project SNC-Lavalin is obliged to develop the project

Safety, Environmental, and Health Management System. The system will align with RPM

procedure, but also include any extra requirements that arise from the implementation of brown field,

fast track works that are specific to the Project itself.

9.2 Kinross Standards

HSE standards included in the Safety, Environmental, and Health Management System are

predicated upon Kinross Gold Corporation HSE policy and management standards, HSE values and

management system, and legislative requirements.

9.3 SNC-Lavalin Standards

In addition to Kinross standards all work performed during the construction of the Paracatu 3rd Ball

Mill project shall satisfy the minimum requirements and intent of SNCL approved HSE

procedures.


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9.4 Contractor Requirements



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The Safety, Environmental, and Health Management System will form the basis of the special

conditions of contract for all contracts. Contractors will not be permitted to mobilise until

SNCLavalin has approved each contractor's HSE Management Plan.

9.5 Details

See the Safety, Environmental and Occupational Health System Manual 334572-0000-68AG-

0001 for an in-depth coverage of project Health, Safety and Environment policy and procedures.


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10.0 RISK MANAGEMENT PLAN



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Kinross has indicated that they already have a risk management system they wish to use for the

project.

Kinross has a formal risk review and identification process implemented through the “Resolver”

Website.

Kinross has provided log-in rights for SNC-Lavalin to enable review of the risks and risk

management plan provided by Kinross.

https://kinross.resolverrisk.com/ResolverRisk/Login/Login2.aspx?ReturnUrl=%2fResolverRisk%2

fDefault.aspx

The SNC-Lavalin Risk Management Procedure 3114 applies to this project, however the

implementation will take into account the Kinross leadership and work in this area. The Kinross

“Resolver” system will be the primary tool for managing risk.

10.1 Risk Review Schedule

A project risk review schedule will be established between the Kinross and SNC-Lavalin Project

Managers.

It is expected that risk review meetings will be held at the following key project events:

Site establishment

Key Contract mobilization at Site for each construction contractor

Shutdown / tie-in

Commissioning.

10.2 Risk Database

Kinross’s Resolver database will be used for this project.




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Resolver is a Web based tool that allows continuous addition, assignment of actions, status

reporting and broad communication of identified project risks.

Since this is a Kinross tool, Kinross will be responsible for maintenance, support, training of

project personnel, generation of project reports, management and access to the database.

10.3 Roles

10.3.1 Risk Managers

SNC-Lavalin Risk Manager for the project (Part Time) - Nikhil Vyas.

Risk Manager for Kinross - Andrew Rodrigues

10.3.2 Safety Managers

SNC-Lavalin Safety Manager for the Project - Luiz Castro.

Kinross Safety Manager - To be advised

10.4 Responsibilities

10.4.1 Project Manager

The Project Managers for both Kinross and SNC-Lavalin teams shall be responsible for creating

an environment where project stakeholders are encouraged to actively search out risks of all

types, so that they can be dealt with as early as possible with the minimum impact and cost to

the project.

The Project Managers have ultimate responsibility to Senior Management for all project risks, their

Identification, Analysis, Evaluation and Prioritization, Mitigation, and Communication.

Project Managers shall foster an environment where any member of the project team may

identify potential risks or opportunities and raise them to their direct supervisor, the Project

Manager, the Project Health, Safety and Environmental Manager or the Risk Manager.




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In any and all circumstances, the Project Manager is always responsible for all risks and their

management.

10.4.2 Project Health, Safety and Environmental Manager

The Project HSE Manager implements and administers the project’s HSE Program in the office and

at the project site. He/she provides the Project Manager with guidance and advice to

achieve the project's Health, Safety and Environmental objectives. The specific functions of the

Project HSE Manager shall be as follows:

Ownership of the HSE Risk Management process

Ownership of the HSE Risk Registers

To ensure that the HSE Risk Register is maintained and is current.

10.4.3 Risk Manager

A Risk Manager is assigned to the project on a part time basis. The Risk Manager shall support the

Project Manager for all aspects of Risk Management. The specific functions of the Risk

Manager shall be as follows:

Ownership of the project Risk Management process.

Ownership of the Risk Database.

To ensure that the project Risk Database is maintained and is current.

To organize, facilitate and document Risk Identification sessions as well as any following-up of

actions.

To organize Risk Management Reviews.

To generate Lessons Learned reports.

To maintain the continuous improvement process.




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To close-out the risk management process at the end of the project.

10.4.3.1 SNC-Lavalin & Kinross Risk Managers

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For this project overall administration of risk management is owned by the Kinross Risk

Manager. However the SNC-Lavalin risk manager is accountable for:

Ensuring SNC-Lavalin minimum internal standards for risk management are met.

The Kinross Risk manager is properly supported, particularly in areas where it is expected

SNCLavalin has greater detailed knowledge of the project, and issues related to EPCM execution.

Management and closure of the risk register actions assigned to SNC-Lavalin personnel.

Ensuring Resolver risk actions are properly tracked and captured for project records.

10.4.4 Risk Owner

Assigned by the Project manager, this should be the person most knowledgeable about the risk and

the person best positioned to actively mitigate the risk.

10.4.5 Other Stakeholders

It is the responsibility of all project stakeholders to take a proactive approach to the identification,

mitigation and minimization of risk. Other stakeholders in the Risk Management process are:

Project Quality Manager

Senior Management

Corporate service organizations, e.g.: finance, project services and HR

Project vendors, subcontractors, and suppliers

All project personnel.


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11.0 QUALITY

11.1 Quality Management Plan



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The project Quality Management Plan is at Appendix L of the Project Instruction Manual 3345720000-

30AG-0001.

For this project Quality Management will apply to Engineering, Procurement and Construction.

Quality managers have been assigned from both the Belo Horizonte locations and the Toronto

locations.

The Toronto location will be responsible for the initial publication of the quality plan. Quality

supervision for the balance of the project will be provided by the Belo Horizonte location.

If you are reading this documentation electronically from inside the SNC-Lavalin network further

information on Quality Procedures can be found at this link: Toronto Quality Procedures


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12.0 PROJECT CONTROLS



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Project controls procedures for this project are described in detail in the Project Controls Plan

334572-0000-32AG-0001.

The Project Controls Manager has been assigned in Toronto, however once the basic

engineering phase is complete, the controls manager assigned Belo Horizonte will be primarily

accountable for controls management and reporting. Since the project is led from Toronto,

management overview and support will continue to be provided from Toronto.

Project controls set-up and PM+ initialisation and configuration is the responsibility of the Toronto

location. Ongoing formal project reporting and maintenance of the PM+ databases will be the

responsibility of the Belo Horizonte location.

12.1 Alignment with Kinross

The project Work Breakdown Structure and cost reporting is to be aligned with the Kinross

standard Work Breakdown Structure and Kinross’s Skire cost control system

Initially controls reporting into Skire will be via semi-manual export-import spreadsheets provided by

Kinross. Kinross would like the project to progress to an automated data transfer system form SNC-

Lavalin into Skire. Due to the fast track nature of the project this work will be lower priority than the

execution required for physical scope. The automated transfer will be scoped and

treated as a sub-project. It will require Kinross to approve a variation for systems experts and IT

specialists to undertake the work.

12.2 Controls Systems

The project will be controlled within SNC-Lavalin as one project set-up under PM+,

SNCLavalin’s proprietary software for managing major engineering and industrial projects.

The project has two contracts that will managed from each business entity. The primary reason for the

two contracts is to clearly separate Brazil local charges from non-Brazil charges. Invoices from non-

Brazilian sources will attract a high level of withholding tax.

PM+ will be set-up to accept accounting and tracking information from Belo Horizonte and

Toronto.




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The financial systems and hours tracking (eg charge codes) between the two offices will be

aligned so that there is single accounts code for the project.

12.3 Roles & Responsibilities

12.3.1 Toronto Project Controls

The Project Controls Manager - Toronto has the following accountabilities:

• Initial set-up up of the project in PM+ and ensuring proper set-up in SLI accounting

systems.

• Creation of the Project Controls Plan

• Creation of project specific Plans, Policies and Procedures where required.

• Leadership and guidance for Belo Horizonte assigned Project Controls Manager.

• Ensuring adequate systems are in place to control the project.

• Initial reporting until there the project reporting process is defined and routine and can be

handed over to Belo Horizonte with minimal disruption to the project.

12.3.2 Belo Horizonte Project Controls

The Project Controls Manager - Belo Horizonte has the following accountabilities:

• Lead project controls for the project in Belo Horizonte and Paracatu site office.

• Ensure the project controls structure as defined by Toronto is implemented in the Belo

Horizonte and Paracatu site office.

• Identify and rectify gaps in project controls processes between the Toronto and Belo

Horizonte.




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• Ensure staff are adequately trained to comply with the project controls procedures used

on the project

• Produce project controls reports once the methodology and format is established.

• Manage the project controls in compliance with SNC-Lavalin corporate procedures as

defined in the Project Quality Plan, including reporting, management of change,

trending/cost estimating and other standard responsibilities of an SNC-Lavalin Project

Controls Manager.

The project controls function is further defined in the Project Controls Plan.


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13.0 ENGINEERING PLAN

13.1 Engineering Plan

13.2 Objectives of this Plan



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The objective of this section is to describe the methods, systems and strategies to be

implemented for successful execution of the engineering for the project.

The plan is to be implemented by the Engineering Manager with execution responsibility with the Lead

Discipline Engineers.

13.3 Objectives, Strategy and key Activities / Deliverables

13.3.1 Engineering Objectives

The key engineering objectives of this phase are as follows:

Ensure integrity of the design in accordance with all relevant applicable International and

Brazilian standards, procedures and industry norms.

Ensure the design is safe, operable, fit for purpose, and cost effective.

Prepare and complete engineering deliverables that are suitable for procurement, construction and

operation of the facility.

Define the key engineering issues and develop a risk management strategy that is to be

implemented through subsequent phases for each of these key issues.

Complete critical reviews to assure the correctness, safety and application of the engineering

scope. Such reviews include HazOp and design reviews.

Interface with construction representatives to verify constructability.

Interfacing with RPM’s personnel to implement operation and maintenance requirements.

Preparation of pre-commissioning manuals.




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Incorporate vendor data into the design.

Provide Construction and pre-commissioning support.

13.3.2 Engineering Strategy

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The strategy for the execution of the engineering for this phase of the project is:

Accept the current conceptual design and progress it through Basic and Detailed Engineering

using the compression “Fast Track” technique.

There will be two SNC offices involved on this project: SNC Lavalin Inc. in Toronto, Canada and

SLM (Minerconsult) in Belo Horizonte, Brazil. The Basic Engineering will primarily be executed

by SLI by SLI personnel. During Basic Engineering, the SLM’s Engineering Manager and SLM’s

Lead Civil/Structural, and Electrical/Instrument Engineers will be based in SLI’s office to ensure

design concepts from Basic Engineering are well understood across the discipline team. This

strategy will allow a smooth transition from Basic Engineering to Detailed Engineering. The Basic

Engineering phase Engineering Manager, Process, Layout, Piping, and Mechanical Leads will be

SLI’s personnel.

The Detail Design will be executed by SLM and reviewed by SLI, however early detail design will be

required for the Cyclone Overflow launder and associated plant modifications that will be

executed between the two offices.

An engineering responsibility and battery limit matrix is shown in Section 3.7 in order to clearly

define the scope of work associated with each office for the Basic and Detailed Engineering

phases.

Weekly Engineering coordination meeting will take place between SLI and SLM.

Deliverables will be issue revision PA for internal and client review to expedite the review and

approval stage for all technical documents.

Construction Support from SLM will be required for construction prior to the completion of Detail

Engineering. Once construction has commenced, engineering support will be required

throughout the construction phase of the project. The engineering support will resolve site




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changes or other issues relating to the implementation of the design. Engineering Change

Notices will be issued.

Wherever practical the services will draw on existing knowledge and documentation from the

previous Expansao III project. It is understood that as-built drawings for the existing plant are up to

date and available.

The engineering team will confirm with a client nominated technical representative the adequacy of

existing machinery used in Plant 2. If there are no significant issues discovered then existing design

specifications will be used “as is” for procurement of new similar equipment of the same type. Where

inadequacies are discovered the existing specifications will be revised accordingly.

For each part of the design being developed it is important to recognise the overall schedule end date

for completion of the Mill is December 2010. The schedule for dependent and independent

engineering tasks must be well developed and communicated to the engineering team so they

understand the impact of their deliverable timing on the critical path.

13.3.3 Key Engineering Activities/Deliverables

The key engineering activities/deliverables of this phase are presented in Section 4.3.1 of this

document.

13.4 Engineering Scope of Work

The following section lists the core engineering activities that are to be conducted during the

execution of the 3rd Ball Mill project.

Review Geotechnical report and recommendations;

Complete Layouts;

Complete 3rd Ball Mill foundation;

Complete Building extension - Structural Steel;

Complete Internal Structural Steel;

Building extension foundations;

Equipment foundations;




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Complete Process flowsheets and Mass balance;

Complete P&IDs;

Issue Procurement packages;

Issue Construction packages which include all IFC drawings.

13.5 Engineering Deliverables

13.5.1 General

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All engineering deliverables will be produced in accordance with the procedures presented in

SNC-Lavalin Global Mining & Metallurgy Quality Procedure. Training in the use of Global Mining &

Metallurgy Quality Procedure will be given to those people working on the project that have not had

sufficient exposure to the systems through working on past SNC-Lavalin Projects.

Deliverables will be coded according to the Appendix H of the Project Instruction Manual

Document No. 334572-0000-30AG-0001 and prepared in a manner so that they can be

packaged by discipline and in accordance with the predefined WBS and Procurement packages.

Deliverables shall be prepared and managed in accordance with the Project Level 2 Schedule and

Technical Document List established in PM+.

13.5.2 Deliverable Progress

13.5.3 General

Progress on deliverables will be closely monitored by the Discipline Leads. As part of

deliverable progress, Discipline Leads have an obligation to assist with the review and update of the

project schedule and to provide progress updates towards the achievement of milestones. A gate

system for deliverable progress will be adopted according to the Project Control Plan per

type of deliverable.

Progress will be updated weekly for all deliverables. Details of the project controls tool for the

project are included in the Project Controls Plan 334572-0000-32AG-0001.


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13.5.4 Change Control



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Engineering changes shall be addressed in accordance with procedure 4032-MMG.

Key documents that provide substantial design input to other disciplines will undergo a strict

engineering change control process for any changes that occur once the document is ‘frozen’ or

reaches approved for design status. The key documents for this project include the following:

PFDs, P&IDs, Equipment Layouts, Plot Plans, Hazardous Area Diagrams, Single Line Diagrams, Data

Sheets, General Specifications, Procedures and Design Bases.

13.5.5 Calculations

All calculations will be prepared according to procedure 4013-SLI Design Brief. Calculations are to be

presented using the standard format as per Section 5.3.1 of that procedure. Each specific set of

calculations will include a clear scope and purpose, applicable design criteria,

assumptions, references, conclusions and recommendations and will be independently checked in

accordance with procedure 4016-SLI.

13.5.6 Design Software

The design software being used on this project is original proprietary packages which are

registered to SNC-Lavalin Inc and registered under a Validated Software Listing as per

procedure 3878-SLI. The software is commercially available and proven to be typical of industry

standard. As such, the software will not undergo any verification apart from confirmation as to

originality.

All inputs and output from design software will be subject to checking processes in accordance with

procedure 4016-SLI.

13.6 Checking and Review

13.6.1 General

Global Mining & Metallurgy Quality Procedure defines the standard checking, review and

approval processes that will be used for the project for all engineering deliverables and their

associated supporting documents and analyses. All checking is to be documented, recorded and

filed for future reference. Standard checking colours and stamps, as defined in Global Mining &

Metallurgy Quality Procedure, shall be used during the checking process.




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The requirements of Global Mining & Metallurgy Quality Procedure act to assure technical quality

of deliverables. Details of the specific processes for this project are presented in the following

sections.

13.6.2 Discipline Internal Review

Following self-checking by the originator, the deliverable is reviewed by a suitably qualified and

experienced independent checker within the discipline. The checker verifies the assumptions, inputs,

calculation methods, arithmetic, format, content, grammar and overall correctness. The formal check

comments are then incorporated and back checked before deliverables are issued for internal and

client review.

13.6.3 Multi-Discipline Checking

Deliverables are further subjected to a multi-discipline check. Multi-discipline checks ensure that all

relevant disciplines are able to review the design being produced by other disciplines and to check

interfaces.

Typical key documents that will undergo multi-discipline checking include:

• Process Flow Diagrams (PFDs);

• Process and Instrumentation Diagrams (P&IDs);

• Equipment specifications;

• Single Line Diagrams (SLDs);

• Layout drawings;

• Civil and structural general arrangement drawings;

• HazOp action register and other key risk and safety documents.

Documents will be multi-discipline reviewed be means of the “Virtual Pink Room” page on the

project PDM site. This site is linked here: https://pm-

gp.snclavalin.com/sites/Paracatu/vpr/Documents/40D1


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13.6.4 Project Design Reviews



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Formalised design review meetings shall be conducted as part of the review process. Kinross

Gold Corporation will be invited to this meeting to offer comments. Design reviews will be

conducted at the 30% and 80% design stage. Design reviews will be initiated by the Engineering

Manager in accordance with the timing presented in the Project Schedule. The objective is to

conduct a series of checks and reviews at 30% and 80% design stage in the development of the

project with the participation of representatives of all functions concerned with the design stage

being reviewed. It is a measure taken to ensure the adequacy of the design. The review involves

the examination of the technical specifications along with the other design documents, i.e. design

calculations, design reports, engineering drawings and the design manual. The Design reviews will be

executed following procedure 4031-MMG.

13.6.5 Procurement and Construction packages

The packages for this project are listed in the Procurement Execution Plan 334572-0000-32AG-

0001.

Equipment Packages are managed through the Procurement Page on the PDM website at this link:

https://pm-gp.snclavalin.com/sites/Paracatu/rfi_rfp/Documents/40-A2

Contract & Construction Packages are managed through the Procurement Page on the PDM

website at this link: https://pm-gp.snclavalin.com/sites/Paracatu/rfi_rfp/Documents/40-A1

13.7 Reference Information

The following is a list of the key reference information that is relevant for engineering associated with this project. These documents are stored under the PDM site link: https://pm-gp.snclavalin.com/sites/Paracatu/tech_ref/Documents/40-REF

13.7.1 Historical Project Documents

These documents are stored under the PDM site link: https://pm-gp.snclavalin.com/sites/Paracatu/tech_ref/Documents/40-REF/SLM


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13.7.2 Procedural Documents



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The list of applicable project procedures are listed on the Appendix J of the Project Instruction Manual, refer to document 334572-0000-30AG-0001.


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14.0 PROCUREMENT



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The Procurement Plan for this project is described in document 334572-0000-50AG-0001.

Procurement will be led from the Belo Horizonte office.

Procurement will cover all activities required to place an order and to expedite the procured item or

contract to site. The only exception to this is the RPM will place the purchase order on the vendors.

Placement of the Purchase Order is a key step to ensure there is no confusion about the project

owner and site in respect of Brazilian taxation requirements.

Liaison with RPM procurement (also located in Belo Horizonte) is required. This is to ensure that the

correct procurement documentation is provided to ensure RPM can place the order when required,

and also to allow RPM to be involved in price negotiation.


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15.0 CONSTRUCTION



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The Construction Management Plan for this project is described in document 334572-

000060AG-0001.

Some key elements of the construction phase follow:

• Construction will be led from Belo Horizonte but will transfer to Paracatu site when construction

contractors are mobilized. This is likely to occur in March 2010 to ensure that critical path

construction activities such as relocation of the cyclone overflow pipe can occur on time;

• Safety during the construction period is a critical success factor for the project. The safe

management of the workforce at the site is a key responsibility for the Construction Manager;

• Since this is a fast track project many construction activities will commence prior to the final

completion of detail design. There will be a site engineer tasked with ensuring quality and timely

feedback from site to the engineering team;

• The construction manager will provide feedback and practical guidance during the development

of project schedule as well as basic engineering.

• Commissioning is also a key activity that will occur at the end of construction. In addition to a

Commissioning Lead the key process team members will be located at site to supervise through

the commissioning period.




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16.0 COMMISSIONING AND OPERATIONS

16.1 Facilities Commissioning Plan

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The Facilities Commissioning Plan is presented in this section and details the commissioning

activities, methods and processes to be utilised by the project.

This plan below is preliminary and general and will be further refined once the construction

team is mobilised. At that time this section will be superseded by the free-standing plan.

16.1.1 Objectives of this Plan

This plan is used to define and document in detail the processes for conducting pre start testing of

the new and modified plant, and verify the readiness for handover to operations personnel for start-up

testing using normal feedstock and or through put. The commissioning scope will

include all, equipment checks and function tests necessary to ensure individual equipment and

combined systems where appropriate, are ready to for start-up testing by Operations Personnel

The plan is to be implemented by the Construction Manager with execution responsibility with the

Commissioning Engineer and or the designated focal point for Commissioning.

16.1.2 Key Principles

Commissioning involves pre-start function testing of the new and modified plant as individual

components or as combined systems where appropriate. This testing is generally carried out

using alternates to normal feedstock and or throughput and will focus on verifying the

functionality of the new and modified plant.

The key principles followed by SNC-Lavalin when developing the Commissioning Plan are

outlined below:

• The commissioning work as defined in this plan will not be commenced until all pre-

commissioning checks have been completed satisfactorily and mechanical completion is

achieved.

• Power supply and support facilities are available to facilitate the pre-start-up Commissioning

tests.




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• Commissioning activities will not commence without the full knowledge and permission of Plant

Operations Personnel.

• At the end of commissioning, the facilities have been function tested, and are ready for start-up

using normal plant feedstock under operations control.

16.1.3 Commissioning Methodology

16.1.3.1 Prerequisites

The commissioning work as defined in this plan will not be commenced until all pre

commissioning checks have been completed satisfactorily and mechanical completion has been

achieved. Commissioning will be undertaken in liaison with Plant Operations, who will be

advised of the commissioning scope, required outcomes, identified hazards and mitigating

actions. Commissioning activities will not commence without the full knowledge and permission of

Plant Operations.

16.1.3.2 Sequence and Description of Commissioning Activities

16.1.3.3 Commissioning coordination meeting

Prior to commencement of commissioning activities a meeting will be held involving the

SNC-Lavalin Commissioning Team and the Plant Operations Representatives. The purpose of this

meeting is to advise the commissioning scope, proposed schedule and methodology, and to highlight

any safety, operational or other issues regarding the pending commissioning activities

e.g. Operator involvement, hazards, special requirements.

16.1.3.4 Identification of commissioning hazards

Hazard identification, risk assessment and the development of appropriate risk reduction

measures is a mandatory activity, to be undertaken by the project prior to issue of the

commissioning plan, and on-site prior to commencement of commissioning activities.

The hazard assessment will cover all commissioning activities as per the commissioning plan,

and will include final tie-in and cut-over activities, and function testing and start-up activities. The

hazard assessment will also consider equipment and process-related hazards, isolations

integrity, and critical control and shutdown issues.




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The hazard assessment will primarily consider risk to people, and risk to the environment. The

hazard assessment may also consider the potential for equipment damage and risk to

production.

An initial hazard assessment will be undertaken by the Project and included in the Hazard

Assessment section in the review issue of this document. Hazards identified by the Project will be

reviewed on-site and communicated to all personnel involved in the commissioning activities, and

further hazard assessment will be undertaken on site. This site assessment will consider site, task

and equipment hazards, and may be implemented using the SNC-Lavalin Job Safety and

Environmental Assessment (JSEA) procedures (or any applicable customer JSEA

processes). The on-site hazard assessment may include Operations input. Identified hazards shall

be listed and required risk reduction measures recorded and implemented prior to

commencement of commissioning. If a JSEA is undertaken, a copy must be attached to the hazard

assessment form in lieu of listing site identified hazards on the hazard assessment form.

In the event that identified hazards are assessed as requiring mitigating actions beyond the

capability of the commissioning team, the Commissioning Coordinator will advise the

SNC-Lavalin Project Engineer, and commissioning work will be deferred until all hazards are

resolved.

16.1.3.5 Final tie-in / cut-over

Where applicable, final tie-in and or cut-over work will be undertaken. Final tie-in works are

defined as work that cannot be undertaken prior to actual commissioning because of

repercussions to existing, operating equipment or process. Cut-over works are defined as

existing equipment or functions which are being modified or replaced by new equipment. Whilst still a

construction responsibility, final tie-in and cut-over activities will be coordinated by the

commissioning group, and included in the commissioning Hazard Assessment and Key Activities

sections of the commissioning plan which forms part of this document.

16.1.3.6 Loop checks

After completing the pre commissioning visual checks, loop checks will be undertaken. Loop

checks will prove connection and calibration of field devices to correct I/O allocation, and check

range and trip settings.




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16.1.3.7 Function checks

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Function checks to confirm operation of the new equipment shall be performed after completion

of loop checks. Appropriate function check sheets have been included in this plan. After

successful completion of each functional check, the function check sheets shall be signed by the

Commissioning Technician and the Commissioning Team Leader or Coordinator. Function

checks will be implemented as per the key activities section of the commissioning plan included

in this document.

16.1.3.8 Pre Start-up testing

Where function testing cannot be performed without operating the equipment or plant being

commissioned, the tests must be undertaken in liaison with the Plant Operations. While pre start-

up testing is part of the commissioning scope, and is undertaken prior to Start-up

Acceptance, equipment may not be started without Operations approval. Where pre start-up

testing is required, Operations are responsible for ensuring that process and plant conditions

allow safe starting and operating of the equipment under test, and that all outstanding or

required, scheduled periodic maintenance has been performed.

No pre start-up testing of equipment may be performed without prior commissioning of the

relevant equipment shutdown or ESD functions.

Pre start-up testing activities must be included in the Key Activities section in the Commissioning Plan

included in this document, and clearly identified on the appropriate Function Test sheets included in

the attachments.

16.1.3.9 Fault logging

Fault logging may be conducted at any stage of commissioning. All faults should be recorded to

ensure corrective actions are implemented. A fault log is provided to record instances of faulty

equipment, design, installation or functionality. Faults detected with associated equipment or plant,

which is not part of the project scope, must also be documented. Every effort should be made to

rectify identified faults during commissioning. If significant faults are identified which cannot be

rectified by the commissioning team, a Non Conformance Report (NCR) should be raised and the

fault dealt with using the NCR follow-up procedures. All outstanding faults

associated with project scope are to be listed on the Punch List included in the attachment

section of this document. All outstanding faults that are not part of the project scope are to be

listed on the Observations List, and forwarded to the responsible group.




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16.1.3.10 Outstanding Commissioning Items

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All outstanding commissioning items or faults must be detailed on the Punch List, which forms

part of the Start-up Acceptance form included in this document. This list identifies; each

outstanding item of work, the responsible group for completing the work, and the expected due

date for completion. Note: Any outstanding faults which are not project scope are to be listed on

the Observations List also included in the Project Start-up Acceptance section included in this

procedure. Items listed must be categorised as start-up critical (“A” items) or start-up non-critical

(“B” items).

• “A” items are safety, environmental, equipment or process critical. Start-up may not proceed with

outstanding Punch List items categorised as “A” items;

• “B” items are not safety, environmental, equipment or process critical. Start-up may proceed with

outstanding Punch List items categorised as “B” items. Project acceptance will only proceed

when all Punch List items (“A” & “B” items) are complete.

16.1.3.11 Project Start-up Acceptance

On completion of commissioning, as per all sections of this plan, the Project Start-up Acceptance form

shall be signed off by the on-site Commissioning Coordinator and the Plant Operations

Representative. The signatories will satisfy themselves that all requirements of the Start-up

Acceptance form are met, including the completion of all safety, environmental, equipment or

process critical items (“A” items) listed on the Punch List. The Commissioning Plan, details the

status of some of the start-up acceptance requirements. These include; training requirements,

changes to Operating Manuals and Critical Function Test procedures, implementation of risk

management measures, and the availability of vendor data and as-built drawings. The Project

Start-up Acceptance Form shall then be distributed, along with the Punch List and Observations List,

with copies to the Plant Operations Supervisor and the SNC-Lavalin Project Engineer. The original

shall be retained with the Project File.

16.1.4 Commissioning Scope of Work

To be completed as commissioning plan is developed.

16.1.5 Approvals

The following approvals need to be obtained prior to start-up acceptance or handover.




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16.1.6 Operations and Maintenance Manuals

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The following Manuals need to be revised and updated prior to start-up acceptance or handover.


16.1.7 Critical Function Test Procedures

The following Critical Function Test Procedures need to be developed and or revised and

updated prior to start-up acceptance or handover:


16.1.8 Training

All people undertaking work at the site are required to attend 40 hours of Induction Training. This

training will be provided by RPM.

16.1.9 Commissioning Spares and Equipment

The following commissioning spares and equipment will be required for the commissioning

scope of work:


16.1.10 Risk Management and Hazard Identification

The following is a list of Risk Management measures undertaken for this project:


16.1.11 COMMISSIONING DOCUMENTS

This section covers all of commissioning records required for the documentation of the required pre-

start-up loop tests, function tests, identified faults, outstanding items, and Start-up or

Handover acceptance sign-off.




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16.1.12 Start-up Deliverables

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A series of documents needs to be prepared in readiness for start-up. On the Paracatu 3rd Ball Mill

project the following documents need to be prepared to facilitate handover and start-up

acceptance:


16.2 Start-Up Plan


16.3 Operations Support & Training Plan





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17.0 DOCUMENT AND DATA MANAGEMENT

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SNC-Lavalin’s PDM system will be used for document and data management for the

SNCLavalin project team.

PDM is web-based and can be accessed by Kinross and project personnel depending with levels of

access and access control administered by the Document Control team.

Since this project requires open access to documents across a number of locations all

controlled documents will be saved to and issued from PDM.

“Controlled” documents are further defined in appendix G of the Project Instructions Manual.

Important Note: Controlled Documents can be classed as Administrative, Technical, Vendor and

Reference. These classes are defined generally in procedure 3702 Document Coding Structure.

For project specific definitions for classes and numbering, further detail is included in appendix G of

the Project Instructions Manual. Eg for this project the project “plans” are coded as per the technical

document coding structure rather than the administrative document structure and

issued through document control.

Additionally there is a “Project Team Sharing” sub-site where team members can work

collaboratively on documents that have not reached “Controlled Document” status. Controlled

documents are not to be formally published at this page.

The challenge for this project is the implementation of effective document and data management for

multiple locations, as well as interfacing to Kinrosss “Skire” system.

Planning meetings will be held with Kinross to develop the external document and data

management processes, and equivalent internal planning meetings will be conducted to ensure

effective management at Toronto, Belo Horizonte and Paracatu construction offices.


PARACATU

18.0 FINANCE

18.1 Invoice Management Plan



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Invoicing will be prepared in accordance with the SNC-Lavalin Invoicing Project Procedure.

Invoicing will be prepared on a monthly basis. The Accounts Departments from Belo Horizonte and

Toronto will issue an invoice for checking by the Project Controller prior to finalisation of the invoice.

All invoices will be signed as approved by the Project Manager.

The project will be executed with two contracts therefore invoices will be generated from Toronto and

Belo Horizonte and both will be received by RPM in Brazil for payment.

It is important to be aware that Brazil will apply a high withholding tax (that Kinross is

accountable to pay) to invoices issued from Toronto. It is therefore desirable that for expenses

where there is a choice about location for the billing (e.g. booking and payment of airfares) should

be planned so they originate from Brazil.

Invoices will be authorised for issue by the SLI Project Manager.

Invoices shall be addressed to Kinross site at Paracatu. This is a critical step to ensure the

project has the appropriate tax treatment in Brazil. Copies of the invoices will be sent to the

Kinross Project Manager who will authorise payment.

The Project Accountants in Toronto and Belo Horizonte will be responsible for tracking timely

payment of invoices and providing the Project Controls and Project management a copy of all

invoices for the Project file and combined project reporting.

The Purchase Order numbers for the SNC-Lavalin services to RPM for the Paracatu 3 rd Ball Mill

project are XXXXXX& YYYYYY. This will be quoted on all invoices.

END OF DOCUMENT


Appendix A - Baseline Schedule (Link to Project Schedule)
