RECOMMENDATION

On the basis of the Recommended Findings set forth in Chapter II of this document, the Director recommends that a Large Mine Permit be approved for the construction and operation of the Kensington Gold Project. The Director recommends that the project be subject to the following permit conditions which are reasonably necessary to mitigate adverse environmental, health, safety, or general welfare impacts which may result from the mining operation. Further, the Director recommends that the Reclamation Plan (August 1997) be approved and that the draft Mitigation Agreement (10/2/97) be incorporated as part of the permit.

PERMIT CONDITIONS

GENERAL CONDITIONS

1. Acceptance of this Large Mine Permit shall be considered agreement by the operator to the following general and specific conditions which have been deemed appropriate by the Planning Commission (Commission). Violation of any condition shall be grounds for suspension or revocation of the permit or other enforcement measures in accordance with CBJ 49.65.160.

2. The applicant shall obtain all required federal, state, and local permits and approvals and shall comply with the permit requirements.

3. The procedures, operating techniques, equipment, location, and other descriptions set for by Coeur Alaska, Inc. in its application to the CBJ (MIN-M96-01) and in subsequent amendments and additions to that application, and as modified by this permit, are incorporated herein as permit conditions and shall be required elements of the project.

4. In addition to the authority to enforce and secure compliance with provisions of this permit, the Commission may order that action which is required to protect the environment, public health, safety and welfare.

5. In the event that any condition contained herein is determined to be invalid, then all remaining conditions shall remain in force.

6. In the event that any condition herein is determined to be in conflict with any other condition contained herein, then where principles of law do not provide to the contrary, the condition most protective of the natural environment, public health, and safety shall prevail.

7. As used in this document, the terms "applicant", "operator", "company" and similar terms mean Coeur Alaska, Inc. The conditions of this permit shall be binding on Coeur Alaska, Inc. And its successors and assigns.

8. This large mine permit, once issued, constitutes authorization for the applicant to seek and receive building and grading permits for all aspects of the project, if applicable code requirements are met, a design review approval is obtained, and the annual monitoring fee required under CBJ 49.65.150(d) is received by the Community Development Department ("department").

9. The operator shall abide by the provisions of the Socioeconomic Impact Mitigation Agreement, terms and conditions of the Financial Warranty, and the Reclamation Plan.(August 1997), as modified by conditions of this large mine permit. These documents are incorporated as part of the large mine permit.

10. The operator shall submit to the department mobilization and construction schedules and revisions thereto at the time these become available. These schedules shall be in sufficient detail to enable the department to carry out its monitoring and financial warranty responsibilities.

ISSUE-SPECIFIC CONDITIONS

WILDLIFE

11. The operator shall designate a position and hire an employee who works on-site to serve as the primary "wildlife contact" for the mine operation. Other employees will be directed to report certain wildlife sightings and interactions (as noted in condition #12) to this employee for recording and reporting. Government agencies will use this employee as the initial contact for information on wildlife issues at the project site.

12. As part of employee orientation, the operator shall provide training in wildlife management and interactions to all project (i.e., company and long-term contract) employees. Training shall include, but need not be limited to: appropriate solid waste management, prohibitions on hunting and trapping at the project site, briefing on black bear encounters and safety measures, effects of noise and disturbance on wildlife, and reporting unusual wildlife sightings or injured animals to the "wildlife contact" (as described in condition #11). The operator shall adopt a personnel policy that prohibits the purposeful or negligent feeding of wildlife at the project site, and shall inform personnel of this policy during training. Training shall be provided to all project employees within 10 days of beginning work at the Kensington project site.

13. Unnecessary and avoidable interference and any harassment of mountain goats during mine construction and operation are prohibited. In particular, the mine operator shall ensure that all helicopter pilots employed on the project receive training in avoiding disturbance to mountain goats and in using appropriate flight paths to minimize disturbance caused by aircraft. Training shall be provided to all new pilots within 10 days of hiring.

14. The operator shall monitor mountain goats in the project area. If two or more consecutive years of aerial surveys conducted by the Alaska Department of Fish and Game indicate a goat population decline of 50 percent or more from a benchmark established during the first two years of project activity, the operator shall contract with ADFG for an analysis of the Lion's Head Mountain subpopulation decline. In conjunction with ADFG and the U.S. Forest Service, the operator shall identify and undertake interim mitigating measures, in accordance with the analysis. If a 50 percent or greater population decline exists at mine closure, the operator shall contract with ADFG for an assessment of replanting mountain goats. A replanting effort shall occur only if ADFG determines that there is a reasonable likelihood of success. The operator shall conduct a one-time transplant of about 15-20 goats, with aerial surveys during the following two years to assess the success.

SOLID WASTE

15. Prior to shipping solid waste to Juneau for disposal, the operator shall minimize waste at its mine facility.

16. In the event that one or more instruments register saturation in the Dry Tailings Facility, the operator shall notify the department within seven working days.

TRAFFIC/TRANSPORTATION

17. The mine operator shall avoid interfering with commercial vessels engaged in fishing in the vicinity of Point Sherman and Comet Beach by ensuring that barge operators adhere to U.S. Coast Guard International Regulations for Preventing Collisions at Sea (Rule 18). If continual conflicts occur between barges and commercial vessels engaged in fishing, then the mine operator shall schedule barge landings, to the maximum extent practicable, during times when the local gillnet fishery in the vicinity of Point Sherman is closed.

18. For barge arrivals and departures that occur during periods when one or more commercial vessels are engaged in fishing in the area, the mine operator shall further limit barge interference with commercial fishing vessels through the following mitigative measures:

a. barge-initiated radio contact with commercial fishing vessels to notify and coordinate with fishermen about the timing of barge approach or departure, and

b. barge approach to and departure from the marine terminal perpendicular to the shoreline to minimize time in the fishing area.

NOISE

19. Except during emergencies, helicopter flights shall be limited to the hours between 6 AM and 10 PM.

20. Unless weather, safety procedures, emergencies, or Federal Aviation Administration requirements dictate otherwise, the mine operator shall operate helicopters at elevations and along the flight path, as follows, in order to minimize noise levels on residential areas, recreation users, and wildlife:

a. The minimum altitude shall be 300 feet above ground level. The highest practicable elevation shall be maintained, preferably at least 2,000 feet above mean sea level.

b. The flight path shall be: from the Juneau Airport, head west while immediately climbing to the FAA-directed or highest practical altitude, cross the Mendenhall River, turn north to Montana Creek and then proceed northwest following the creek drainage, on past Windfall Lake toward the mouth of Cowee Creek, north across Berners Bay, and then along the coastline of Lynn Canal to the mine site.

21. The mine operator shall use ambient-sensitive vehicle backup alarms set at the lowest noise levels consistent with good safety practices and Mine Safety and Health Administration requirements.

VISUAL RESOURCES

22. The operator shall limit the visual impacts of the project during construction and operation through the following mitigative measures:

a. Preserve as much of the existing vegetation as possible between proposed and existing Marine Terminal structures and Lynn Canal.

b. Revegetate around buildings and other facilities immediately after construction.

c. Use natural-appearing paints and finishes for construction of buildings, tanks, ore containers, and other structures so that the mine facilities blend in with the surrounding natural landscape.

d. Design and place exterior lighting such that light and glare are minimized from offshore viewpoints, while assuring that worker safety is not compromised.

e. Revegetate cut and fill slopes for the access roads and tailings slurry pipeline after construction.

f. Revegetate embankment slopes and other disturbed areas after construction.

g. Locate overhead lines so that they are not readily noticeable from offshore viewpoints.

SUBSIDENCE

23. The operator shall maintain at least 150 feet of crown pillar to eliminate the possibility of subsidence.

AVALANCHE/LANDSLIDE

24. The operator shall prohibit job site access of workers to the Sand and Gravel Borrow Pit when avalanche conditions are present.

HISTORIC RESOURCES

25. In the event that any prehistoric, historic, or archaeological evidence is discovered during mine construction and operations, the operator shall stop work promptly in the immediate area and notify the CBJ Community Development Department and the Alaska State Historic Preservation Officer.

26. The operator shall consider offering any historic artifacts found on private land to an appropriate museum or Native heritage organization in the Juneau area.

MONITORING

27. The operator shall pay an annual monitoring fee to the department to cover the reasonable costs to inspect and review compliance with the permit. The initial fee shall be submitted to the department prior to issuance of CBJ building and grading permits for the mine project, and the annual fee thereafter on or about July 1 or as requested by the department. The fee for basic monitoring tasks is established at $20,000 annually and includes funding for CBJ staff time and production and distribution costs for a report to the community. The fee shall be adjusted annually by the department for personal services costs and inflation. A departure from the base fee amount, beyond annual adjustments for slight staff cost changes and inflation, will be subject to Planning Commission approval.

28. The operator shall pay additional costs under the annual monitoring fee for professional services necessary to ensure compliance with the permit, subject to review and approval by the Planning Commission.

29. The operator shall provide to the department copies of all state and federal permits requiring monitoring, monitoring plans required in these permits and any revisions to the monitoring plans specified in these permits. The operator shall provide to the department paper and electronic file copies of the periodic monitoring reports required in these permits, as requested by the department. All monitoring reports submitted to the department shall include a summary statement at the front of the report that describes any sampling anomalies, observed trends in the data, suggested changes to subsequent monitoring, any problems, and corrective actions taken to address any problem.

30. As part of the annual progress report required under CBJ 49.65.150, the operator shall submit to the department a section stating how conditions unique to the large mine permit have been met during the previous year. As requested by the department and to the extent practicable, the annual report shall coincide with annual reporting to other agencies.

31. The operator shall comply with the monitoring requirements of all state and federal permits and approvals for the Kensington Gold Project. The monitoring requirements of the following state and federal permits and approvals are hereby incorporated by reference:

U.S. Forest Service:

1. Plan of Operations Approval

2. Section 313 and 319 of the Clean Water Act Compliance

Environmental Protection Agency:

3. National Pollutant Discharge Elimination System (NPDES)

4. Spill Prevention Control Countermeasure Plan (SPCC) Approval

5. Facility Response Plan Approval

U.S. Army Corps of Engineers:

6. Section 404 Clean Water Act Permit

7. Section 10 Rivers and Harbors Act Permit

U.S. Coast Guard:

8. Spill Prevention, Containment and Countermeasure Plan Approval

Alaska Department of Environmental Conservation:

9. Certificate of Reasonable Assurance for Section 404/10 Permits

10. Certificate of Reasonable Assurance for NPDES Permit

11. Air Quality Control Permit to Operate

12. Solid Waste Disposal Permit

13. Alaska Domestic Wastewater Treatment System Plan Approval

14. Oil Discharge Prevention and Contingency Plan Approval

Alaska Department of Fish and Game:

15. Section 16.05.840 Permit (Fish Passage)

16. Section 16.05.870 Permit (Anadromous Fish Habitat)

Alaska Department of Natural Resources:

17. Water Rights Permits

18. Tideland Leases

19. Right of Way Permit

RECLAMATION

32. As part of the annual progress report to the department required under CBJ 49.65.150, the operator shall identify the past year's reclamation and specific plans for reclamation activities in the ensuing year. The operator shall also estimate the amount of reclaimed acreage during the past year and associated reclamation costs. Similarly, the operator shall estimate the amount of acreage to be disturbed in the ensuing year and anticipated costs of reclamation. The estimated acreage and reclamation costs shall be provided for purposes of the annual review of the financial warranty in accordance with CBJ 49.65.140(f).

33. The operator shall notify the department of proposed changes in mine operations that may affect the total amount of surface area disturbed or the reclamation in the approved Reclamation Plan in accordance with CBJ 49.65.155. To the extent possible, such notification will accompany the annual progress report submitted to the department.

34. In the annual progress report to the department, the operator shall provide data and analysis about the results of any revegetation test plots and shall describe how successful test results could be incorporated into revegetation practices and amendments to the approved Reclamation Plan. The operator shall also report and analyze water quality monitoring data from reclaimed sites in the annual progress report.

35. To be considered successful and prior to final release of the financial warranty by the department, mine reclamation shall meet the requirements of CBJ 49.65.135(b), 49.65.140(a) and other conditions of the large mine permit. Reclaimed sites shall also support 75 percent live self-sustaining vegetative cover where revegetation has been undertaken, and runoff from reclaimed sites shall meet Alaska Water Quality Standards.

36. Reclamation of streams and the Ophir Creek diversion channel shall include consideration of bioengineering techniques to protect fish habitat in addition to the placement of rip rap to meet the primary reclamation objective of stabilization.

37. Topsoil or growth media shall be applied over regraded areas to a minimum depth of one foot, subject to modification based on the results of site-specific revegetation test plots identified in Permit Condition #38 above.

FINANCIAL WARRANTY

38. The Planning Commission sets the amount of the financial warranty to ensure performance of the requirements of the permit to reclaim the mine site after initial construction at $3,491,000., subject to review by the department on an annual basis. An increase or decrease in the amount of the financial warranty shall be made by the Planning Commission.

39. In the initial year of operation, and each year thereafter as deemed necessary by the department, at the time of the renewal and updating of the financial warranty or if a review is required sooner by a project amendment, the department shall engage the services of a professional engineering consultant with experience in rural Alaska construction cost estimating. The consultant shall estimate the cost of performing complete reclamation of the project site in the condition existing at the time of renewal plus the cost of reclamation of activities scheduled in the ensuing year of project development. This cost estimate, which shall include all attendant construction, administrative, and inspection costs as well as a reasonable contingency, shall comprise the reclamation portion of the financial warranty. The operator shall pay department expenses to prepare the reclamation cost estimate.

CBJ COMMITMENTS

1. The CBJ will work with appropriate agencies to develop a multi-agency Memorandum of Agreement on procedural issues pertaining to reclamation of the Kensington Gold Project such that local, state, and federal agency needs can be handled in a coordinated and efficient manner. As part of this reclamation MOA, the CBJ will strive to achieve a financial warranty that satisfies all agencies requiring a warranty and avoids duplication for the operator.


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Last revised on 06/28/99 - bgb