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Process Water Circuit Monitoring Plan As Required By: Mitigation Measures OA-GW-03/04

June 2018

Prepared by:

Rosemont Copper Company

Process Water Circuit Monitoring Plan, Rev. 2 Page i

Monitoring and Reporting Schedule

Task Schedule Purpose/Description/Timing Construction

Phase Operations Phase and

Closure Phase

AN D AN D W Q

Facility Monitoring/ Inspections during Construction1

Compliance with APP, MPO, and final design plans X

Facility Monitoring/ Inspections during Operations

Compliance with APP X X X

Facility Monitoring/ Inspections during Closure

Compliance with APP X

Inspection and Calibration of Overflow Alarm Instrumentation

Per manufacturers’ recommendations X

Inspection and Calibration of Flow Meters

Per manufacturers’ recommendations X

Reporting (As-built; includes Construction Quality Assurance [CQA] report)

Compliance with APP; submit to ADEQ1 X

Reporting APP self-monitoring report forms (SMRFs)

Compliance with APP; submit to ADEQ1 X

Reporting (as-built) To USFS X

Reporting (inspection summary) To USFS X

AN = As Needed; D = Daily; W = Weekly; Q = Quarterly; A = Annually; 1 - Provide to Forest Service if requested.

Revision Log

Revision Number

Revision Lead Purpose of Revision

Revision Date

1 Rosemont Updated plan date from original June 2017 MPO submittal, added revision number. March 2018 2 Rosemont Minor format standardization text edits. June 2018

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Table of Contents 1.0 PLAN OBJECTIVES AND DESCRIPTION ........................................................................... 1

1.1 PLAN OBJECTIVES .......................................................................................................... 11.2 PLAN DESCRIPTION ........................................................................................................ 2

2.0 MONITORING AND REPORTING ........................................................................................ 42.1 MONITORING .................................................................................................................... 42.1.1 MONITORING OF LINED PONDS DURING CONSTRUCTION PHASE ................... 42.1.2 MONITORING OF LINED PONDS DURING OPERATIONS PHASE ........................ 42.1.3 MONITORING OF OVERFLOW ALARMS DURING OPERATIONS PHASE ............. 52.1.4 MONITORING OF FLOW METERS/DEVICES DURING OPERATIONS PHASE ...... 52.1.5 MONITORING OF PROCESS PONDS AT CLOSURE ............................................... 5

2.2 REPORTING ...................................................................................................................... 63.0 CLOSURE AND BOND RELEASE ....................................................................................... 7

3.1 INTERIM CLOSURE .......................................................................................................... 73.2 FINAL CLOSURE ............................................................................................................... 73.3 BOND RELEASE ............................................................................................................... 7

4.0 ADAPTIVE MANAGEMENT ................................................................................................. 85.0 DATA MANAGEMENT .......................................................................................................... 96.0 REFERENCES .................................................................................................................... 10

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1.0 PLAN OBJECTIVES AND DESCRIPTION This Process Water Circuit Monitoring Plan (Plan) was developed as a mitigation and monitoring measure (Mitigation Measure) requirement of the U.S. Forest Service’s (USFS, Forest Service) Coronado National Forest (Coronado) Final Environmental Impact Statement (FEIS; USFS, 2013) for the Rosemont Copper Project (Project). The Mitigation Measure requirements are specified as “OA-GW-03: Equipment and methods to keep potentially contaminated water from being released into the environment” on pages B-84 and B-85 in Appendix B of the FEIS, and “OA-GW-04: Control and recycling of process water” on pages B-85 and B-86 in Appendix B of the FEIS.

These Mitigation Measures correspond with the construction, operation, and closure of lined ponds associated with Aquifer Protection Permit (APP) No. P-106100 (Permit) issued to Rosemont Copper Company (Rosemont) for the Project. The Permit was originally issued to Rosemont by the Arizona Department of Environmental Quality (ADEQ) on April 3, 2012 (ADEQ, 2012). Several amendments have since been issued to Rosemont, with the latest amendment issued in August 2015 (ADEQ, 2015). Hudbay Minerals (Hudbay) acquired Rosemont and its parent company, Augusta Resources, in July 2014.

APP No. P-106100 stipulates monitoring requirements for each of the facilities listed in the Permit. The Aquifer Protection Program is a State-funded, State-authorized program that regulates potentially discharging facilities and prohibits discharges to the aquifer that have a reasonable probability of causing an exceedance of an Aquifer Water Quality Standard (AWQS) at point of compliance (POC) wells. This Plan does not cover all aspects of the APP but is specific to the lined ponds that are part of the process water circuit and/or used to capture stormwater impacted by the process. These ponds include the Process Water Temporary Storage Pond (PWTS Pond) and the Primary Settling Basin (PSB). The PWTS Pond is divided into two (2) sections: the PW Pond and the TS Pond.

The PSB design was modified herein to follow the approved design for the PW Pond, i.e., double-lined process water pond with a leak collection and removal system (LCRS). Monitoring requirements for the PSB listed herein are also reflective of this design change.

Monitoring activities required under Mitigation Measures OA-GW-03 and OA-GW-04 will begin in the Construction Phase, continue through the Operations Phase, and end in the Final Reclamation and Closure Phase (Closure Phase) with the closure of the ponds.

1.1 PLAN OBJECTIVES The objectives of Mitigation Measures OA-GW-03 and OA-GW-04 are to:

• Avoid impacts to groundwater and surface water from potential contamination; and

• Reduce overall usage of groundwater.

Mitigation Measure OA-GW-03 calls for the use of appropriately sized lined ponds, retention of all stormwater contacting the process for reuse as process water, and the installation of overflow alarms to alert operators of a potential overflow situation. Monitoring requirements include inspections during Construction Phase to ensure compliance with specifications and location (facility footprint), inspections during the Operations Phase to ensure compliance with operational constraints, and inspections during the Closure Phase to ensure the facilities are adequately reclaimed.

Mitigation Measure OA-GW-04 calls for the reduction of fresh water usage and the avoidance of potentially contaminated discharges by containing all process water in lined facilities (to be recycled back into the process stream to offset fresh water usage), and the installation of overflow alarms to alert operators to a potential overflow situation. Monitoring requirements include inspections during the Construction Phase to ensure compliance with specifications, inspections during the Operations Phase to ensure compliance with operational constraints, and during the Closure Phase to ensure the facilities are adequately reclaimed.

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Other Forest Service mitigation measures and/or other permits/requirements/certifications associated with process water, or preventing/monitoring potential contamination of surface and/or groundwater, include:

• FS-GW-01: Monitoring of waste rock for seepage. This mitigation measure includes the monitoring of waste rock placed in the Waste Rock Storage Area and in the perimeter buttress of the Dry Stack Tailings Facility for evidence of seepage via infiltration of meteoric precipitation. If occurring, a sample of this water would be collected and analyzed (see pages B-16 and B-17 in Appendix B of the FEIS);

• FS-GW-03: Additional operational waste rock and tailings characterization. This mitigation measure includes the testing of waste rock and tailings to provide data on the long-term behavior of the waste rock and tailings with respect to acid generation and metals leaching (see pages B-19 through B-21 in Appendix B of the FEIS);

• OA-GW-02: Reduction in potential for acid rock drainage per APP. This mitigation measure requires monitoring of waste rock placement and the segregation of potentially acid generating (PAG) materials. Limited geochemical characterization is also part of this measure (see page B-84 in Appendix B of the FEIS);

• OA-GW-05: Processing and placement of tailings to reduce water content and overall footprint. This mitigation measure requires the use of dry stack technology to filter and place the tailings (see pages B-86 and B-87 in Appendix B of the FEIS);

• OA-GW-06: Groundwater quality and water-level monitoring required under the aquifer protection permit. This mitigation measure is tied to Rosemont’s APP No. P-106100 with regard to monitoring point-of-compliance (POC) wells located around the down-gradient perimeter of the Project facilities. See pages B-87 and B-88 in Appendix B of the FEIS; and

• OA-SW-01: Detention and testing of stormwater. This mitigation measure is tied to Rosemont’s Multi-Sector General Stormwater Permit No. AZMSG-74939 with regard to monitoring stormwater quality at the Sediment Control Structures located down-gradient of the Project facilities. See pages B-88 and B-89 in Appendix B of the FEIS.

In addition, Rosemont has developed a Water Programs Quality Assurance Project Plan (QAPP; MPO Volume II-ff) which is intended to meet the “Sampling & Analysis Plan” requirements of the APP. The QAPP (MPO Volume II-ff) describes and includes the following:

• Water sampling procedures;

• Quality assurance protocols;

• Sample handling and reporting requirements;

• Analyte lists for each monitoring program; and

• Criteria and process for data verification.

1.2 PLAN DESCRIPTION The remainder of this Plan includes the following sections:

• Section 2.0: Monitoring and Reporting;

• Section 3.0: Closure and Bond Release;

• Section 4.0: Adaptive Management;

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• Section 5.0: Data Management; and

• Section 6.0: References.

Overflow from the tailings thickeners will be collected in a process water tank and recycled into the mineral processing circuit; any overflow from the process water tank will report to the PW Pond. Pumping out of the PW Pond will report to the Process Water Tank as needed. The PSB will be managed to provide an opportunity for solids to settle out of stormwater before being pumped to the PW Pond. The TS Pond will normally be dry to maintain maximum capacity for stormwater runoff containment. Operation of this circuit will allow the PW Pond to be optimized for the storage of process water for use (and re-use) in the processing circuit.

Incline-mounted and/or barge pumps will be placed in each pond (PSB, PW and TS ponds) to pump captured recirculated process water and/or stormwater to the process water tank either directly (as is the case for the PW Pond) or via the PW Pond (as a is the case for the TS Pond and PSB). Water from the process water tank will be distributed by pump/pipeline system to usage points in the mineral processing circuit.

Water level elevations in the PWTS Pond and PSB will be monitored at the mill control room and via physical inspections at the ponds. Continuous pond level monitoring in the ponds is anticipated either via an ultrasonic level device or a pressure transducer; both of which would be monitored at the mill operations control room. Physical inspections of the pond fluid levels will also be made as part of permit conditions.

The mill control room will include an overflow alarm that will be set to alert personnel (in the control room) in the event of rising water levels above select elevations (such as at the pond freeboard elevation). Audible and flashing light alarms will also be located at the physical pond location.

The configuration of the PW Pond, TS Pond, and the PSB include inter-joining overflow spillways with spillway elevation. The PSB is connected to the PW Pond and the PW Pond is connected to the TS Pond in this manner. The TS Pond is designed to contain overflow from the two (2) other lined ponds during large storm events and it is normally empty. Therefore, overflow alarm events will be triggered when the fluid level in TS Pond reaches a pre-determined level.

Activation of both visual and audible alarms is anticipated at the pond location when the freeboard limit is reached in the TS Pond (2-feet below crest). Activation of a visual alarm at the pond location is anticipated when the fluid elevation reaches about five (5) feet below the freeboard elevation.

Solution levels in the three (3) lined ponds would be managed by curtailing inflows such as from the fresh water system, pit dewatering system, and/or other stormwater catchments. In case of an excursion of process water, the steps listed in Section 2.6.3.2 of the APP (ADEQ, 2015) would be followed.

Additionally, and as part of fresh water usage tracking, fresh water, and stormwater pumped to the Process Water Tank, PW Pond, and/or PSB will be recorded. Installation of the following flow monitoring devices (meters/gages/devises) is anticipated but will be finalized during design phase of the Project to meet operational control requirements:

• Fresh water pipeline to Process Water Tank (from Fresh/Fire Water Tank)

• Pipeline (if installed) from the Crusher Stormwater Pond or dry stack tailings area (excess stormwater accumulation)

• Stormwater channel into Primary Settling Basin from Plant Site

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2.0 MONITORING AND REPORTING Monitoring and reporting components for Mitigation Measures OA-GW-03 and OA-GW-04 are listed below.

2.1 MONITORING Monitoring requirements for Mitigation Measures OA-GW-03 and OA-GW-04 are specific to the process water/temporary storage pond (PWTS Pond) and the Primary Settling Basin (PSB). With the exception of instrumentation associated with alarms and flow monitoring devices, monitoring requirements described below are duplicative of, and specified in, the APP.

2.1.1 Monitoring of Lined Ponds During Construction Phase Daily visual inspections of the PWTS Pond and the Primary Settling Basin will be conducted during the Construction Phase to ensure the ponds are constructed in compliance with the approved Mine Plan of Operations (MPO), APP, and final design plans and specifications. Daily inspections will be conducted to:

• Ensure consistency with the planned facility location; and

• Ensure material specifications are met and that all testing (subgrade, liners, etc.) is performed.

A survey of the final pond configuration will also be conducted. Stage-storage curves for each pond will also be developed (cumulative volume versus elevation).

2.1.2 Monitoring of Lined Ponds During Operations Phase Daily visual inspections associated with the APP will consist of:

• Spillway structures (to ensure no blockage)

• Water surface elevation (via pond markings on liner) in the PW Pond

• Water surface elevation (via pond markings on liner) in the TS Pond

• Water surface elevation (via pond markings on liner) in the PSB.

In accordance with Table 4.1.1 of the APP, the daily monitoring will also be performed on the TS Pond to insure that impounded water is removed within 60 days.

Weekly inspections of the LCRS pump system (in the PW Pond and PSB) per the APP will be conducted to ensure proper functioning and will consist of the following:

• Measuring and recording flow rate pumped by the LCRS;

• Comparing measured flow rate to AL1 or AL2 (specified in Table 2.2 and Sections 2.6.2.4 and 2.6.2.5 of the APP); should be less than AL1 or AL2 (Note: APP will be amended to include changes to the PSB design);

• If flow rate exceeds AL1 or AL2, taking appropriate action (per Section 2.6.2 of the APP).

Quarterly visual inspections of pond integrity of the PWTS Pond and Primary Settling Basin will be conducted to ensure that the design capacity is not exceeded. Quarterly visual inspections will include checking:

• Pond freeboard

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• Proper functioning of pump systems, valves, and related structures

• Comparison of pond water level elevation readings with mill control room readings.

In accordance with Section 2.6 of the APP, appropriate action, which may include notification to and coordination with ADEQ, will be taken if any of the following are observed:

• Perforated, cut, torn, or damaged liner and impairment of anchor trench integrity

• Impairment of embankment integrity, as applicable

• Excessive erosion in conveyances and diversions

• Excess accumulation of debris in conveyances and diversions

• Impairment of access

As needed inspections will be conducted of the PWTS Pond and PSB following a significant rainfall/surface water flow event or process upset event in accordance with Table 4.2.1 of the APP. These inspections will check for:

• Maintenance of design capacity (maintain freeboard); and

• Proper functioning of pump systems, valves, and related structures

Appropriate action will be taken if any of the following are observed:

• Perforated, cut, torn, or damaged liner and impairment of anchor trench integrity;

• Impairment of embankment integrity as applicable;

• Excessive erosion in conveyances and diversions;

• Excess accumulation of debris in conveyances and diversions; and

• Impairment of access.

As noted in the Rosemont APP, a significant rain event if defined as 0.5 inches (or greater) of precipitation within a 24-hour period.

2.1.3 Monitoring of Overflow Alarms during Operations Phase As needed inspections of the overflow alarm in the TS Pond are anticipated. The design of the alarm system will either be tied to the overall fluid level monitoring system (via pressure transducer or equivalent, etc.) or a liquid level sensor. Instrumentation will be checked/calibrated per manufacturer’s recommendations.

2.1.4 Monitoring of Flow Meters/Devices During Operations Phase Continuous monitoring of flows into and out of the ponds will be part of the operational control system. Inspection and calibration of the devices will be per manufacturer’s recommendations.

2.1.5 Monitoring of Process Ponds at Closure Daily visual inspections of the ponds will continue until closure of the ponds. The inspections will ensure that closure of the lined pond facilities follow the technical memorandum titled Prescriptive BADCT Closure for Lined Facilities at the Rosemont Project, dated March 15, 2010 (Tetra Tech, 2010). Site grading and reclamation of the former pond areas will follow the Reclamation and Closure Plan (MPO Volume III-a).

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2.2 REPORTING The APP specifies reporting requirements to ADEQ regarding the inspections and monitoring of the lined ponds. These requirements include the submittal of quarterly electronic Self-Monitoring Report Forms (SMRFs). The SMRF is developed by ADEQ and is specific to the issued permit. Information reported in the SMRFs includes pond inspection results, water quality analytical results (from POC wells), and any exceedances of alert levels, aquifer quality limits, discharge limitations, and/or Aquifer Water Quality Standards (AWQSs). Records used to prepare the quarterly electronic SMRF will be available to the Forest Service for inspection on-site.

In addition to quarterly SMRF submittals, Section 3.0 of the APP requires completion and submittal of a final Construction Quality Assurance (CQA) report (as-built report) within 90 days after the completion of construction of a permitted facility. The objective of the CQA is to verify that the work undertaken was built in accordance with the final technical documents, design drawings, and specifications provided to ADEQ. The CQA also includes the results of all required testing.

Reporting to the Forest Service on Mitigation Measures OA-GW-03 and OA-GW-04 will be performed quarterly during the construction and operational phases (and until closure of lined ponds) and will consist of the following, as applicable:

• Copies of required reports (specified in the APP), including any final facility CQA reports;

• Progress regarding facility construction. Included will be status of completion, anticipated completion schedule, and any design modifications/adjustments made during the reporting period; and

• A summary of general facility inspection results and any needed facility repairs or upgrades following facility construction.

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3.0 CLOSURE AND BOND RELEASE This section addresses closure activities associated with this Plan as well as the approach for funding of those activities and bond release of those funds. If bonding is set for one year or less (i.e., simply completing testwork or finalizing reporting) no bond release is proposed. For longer periods, the bonding terms and application for bond release, as well as the mechanism for that release, are included.

3.1 INTERIM CLOSURE

Solution management activity costs associated with removal of fluids from the lined ponds is included in the Reclamation and Closure Plan (MPO Volume III-a)

3.2 FINAL CLOSURE

Closure of the lined ponds will follow the technical memorandum titled Prescriptive BADCT Closure for Lined Facilities at the Rosemont Project, dated March 15, 2010 (Tetra Tech, 2010). Costs for liner removal and site grading and reclamation of the former pond areas, including infrastructure removal, are included in the Reclamation and Closure Plan (MPO Volume III-a).

3.3 BOND RELEASE

Bond release for these Mitigation Measures will occur when closure of the ponds is completed in the Closure Phase.

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4.0 ADAPTIVE MANAGEMENT Rosemont will incorporate the adaptive management process into the implementation of Mitigation Measure FS-GW-02 (as acceptable to ADEQ). This process will ensure that the intent of the Plan is being met and that pertinent data is being collected and reported. The three key components of adaptive management are:

• Testing assumptions – collecting and using monitoring data to determine if current assumptions are valid;

• Adaptation – making changes to assumptions and monitoring program to respond to new or different information obtained through the monitoring data and project experience; and

• Learning – documenting the planning and implementation processes and its successes and failures for internal learning.

Elements that may be modified as part of the adaptive management process for this Plan include, but are not limited to, the following:

• Reporting frequency;

• Report content; and

• Design changes to pond specifications.

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5.0 DATA MANAGEMENT Rosemont currently maintains data in various formats including logbooks, electronic logbooks, spreadsheets, hardcopy and database formats. It is Rosemont’s intent that, ultimately, a robust database will be used to house all data collected for the various monitoring programs. Numeric data ultimately will be stored in a database and spatial data will be maintained in an ESRI database.

Depending upon the type of data to be reported, Rosemont will develop custom reports displaying required information in table or figure format. Electronic submittals will be provided in pdf format to provide a permanent record of the submittal and “raw” data will be maintained on-site for review by the Forest Service. If the Forest Service requests numeric data, it may include information such as cumulative results documenting the monitoring history and include baseline data for the resource.

Electronic submittals will be made on the reporting period specified. Reports will be submitted to the Forest Service in hardcopy form with a duplicate electronic pdf file. Delivery of the electronic files will depend upon the size of the file and will either be made via email, via a CD/DVD or thumb drive, or via a website set up and maintained for delivery of files to the Forest Service. Details regarding access will need to be worked out so transmittals can take place seamlessly.

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6.0 REFERENCES ADEQ, 2012. Aquifer Protection Permit No. P-106100 for Rosemont Copper Project. Issued to

Rosemont April 3, 2012.

2015. Other Amendment to Aquifer Protection Permit No. P-106100 for Rosemont Copper Project. Issued to Rosemont August 26, 2015.

Tetra Tech, 2010. Prescriptive BADCT Closure for Lined Facilities at the Rosemont Project. Technical Memorandum dated March 15, 2010.

USFS, 2013. Final Environmental Impact Statement for Rosemont Copper Project, Appendix B Mitigation and Monitoring Plan. December 2013.