February 1, 2013

ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT

Dvoinoye Mine Project

Submitted to: LLC "Northern Gold" Proletarskaya St. 13 Magadan, 685000 Russia

Report Number: 10-51515-0017 Distribution:

REPORT 1 e-copy - LLC "Northern Gold" 1 e-copy - Golder Consulting (Russia) 1 e-copy - Golder Associates Ltd.

DVOINOYE PROJECT ESIA

Table of Contents

1.0 INTRODUCTION ...... 1

1.1 Scope of Work ...... 1 1.2 Report Organization ...... 2

2.0 REGULATORY REQUIREMENTS ...... 3

2.1 Russian Regulatory Requirements ...... 3 2.1.1 Russian Participation in International Treaties ...... 3 2.1.2 Federal Regulations of the OVOS Process ...... 3

2.1.3 Public Participation ...... 4 2.1.4 Recent Changes in Russian OVOS Regulations ...... 5 2.1.5 Environmental standards...... 5

2.1.5.1 Air Quality and Noise ...... 5 2.1.5.2 Water ...... 5 2.1.5.3 Wastewater ...... 6

2.1.5.4 Soil ...... 6 2.1.5.5 Radiation ...... 7 2.2 IFC/World Bank...... 7

2.3 Environmental Design Limits ...... 8

3.0 PROJECT DESCRIPTION ...... 26

3.1 Project Location ...... 26 3.2 Project Life Cycle ...... 27 3.3 Construction Stage ...... 27

3.4 Operation Stage ...... 28 3.5 Closure Stage ...... 29 3.6 Project Components ...... 29

3.6.1 Underground Mine ...... 30 3.6.2 Ore Processing at Kupol ...... 31 3.6.3 Explosives Store ...... 32

3.6.4 Power Supply ...... 32

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3.6.5 Fuel Supply ...... 33

3.6.6 Water Supply ...... 33 3.6.7 Storm Water Management ...... 34 3.6.8 Waste Management ...... 34

3.6.8.1 Mine Waste Rock ...... 34 3.6.8.2 Tailings Management ...... 35 3.6.8.3 Organic and Solid Waste ...... 35

3.6.8.4 Hazardous Waste ...... 35 3.6.8.5 Sewage Treatment ...... 36 3.6.9 Access Roads ...... 36

3.6.10 Accommodation and Offices ...... 36 3.6.11 Truck Maintenance Facility ...... 37 3.6.12 Helicopter Pad ...... 37

3.6.13 Labour Requirements ...... 37 3.7 Assessment of Alternatives...... 37 3.7.1 Ore Processing ...... 37

3.7.2 Ore Transport to Kupol ...... 38 3.7.3 Landfill Site ...... 38 3.8 Project Summary ...... 39

4.0 EXISTING ENVIRONMENT ...... 50 4.1 Physiography ...... 51

4.1.1 Mine Site ...... 51 4.1.2 All-Weather Road ...... 52 4.2 Climate and Meteorology ...... 52

4.3 Air Quality and Noise ...... 56 4.4 Geology ...... 57 4.4.1 Geological and Permafrost Hydrogeological Conditions ...... 58

4.4.1.1 Composition and properties of unconsolidated deposits and bedrocks ...... 58 4.4.1.2 Geocryological properties and the thermal regime of deposits ...... 59 4.5 Geochemistry ...... 60

4.6 Hydrogeology ...... 68

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4.6.1.1 Groundwater Sensitivity ...... 69

4.6.1.2 Groundwater Quality ...... 69 4.7 Hydrology ...... 73 4.7.1 Average Annual Flow ...... 74

4.7.2 Seasonal Flow Distribution ...... 75 4.7.3 Low Flow ...... 78 4.7.4 Peak Flow ...... 78

4.8 Water Quality ...... 79 4.8.1 Dvoinoye Mine Site ...... 79 4.8.2 Dvoinoye-Kupol Road ...... 89

4.9 Biological Environment ...... 92 4.9.1 Terrestrial Environment ...... 92 4.9.1.1 Vegetation and Soils ...... 92

4.9.1.2 Terrestrial Fauna ...... 98 4.9.1.2.1 Project Site ...... 98 4.9.1.2.2 Dvoinoye-Kupol Road ...... 100

4.9.2 Aquatic Environment ...... 101 4.9.2.1 Benthic Communities ...... 102 4.9.2.1.1 Dvoinoye Mine Site ...... 102

4.9.2.1.2 Dvoinoye-Kupol Road ...... 103 4.9.2.2 Fisheries ...... 105 4.9.2.2.1 Dvoinoye Mine Site ...... 105

4.9.2.2.2 Dvoinoye-Kupol Road ...... 106 4.9.3 Biodiversity ...... 107 4.10 Protected Areas and Areas of Natural Significance ...... 108

4.11 Socio-economic Environment ...... 109 4.11.1 Socio-economic Baseline Methodology...... 110 4.11.2 National Overview ...... 110

4.11.3 Politics and governance ...... 111 4.11.4 Economics ...... 112 4.11.4.1 Chaun Municipality ...... 113

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4.11.4.2 Anadyr Municipality ...... 114

4.11.4.3 Bilibino Municipality ...... 114 4.11.5 Demographics and people ...... 114 4.11.6 Health ...... 114

4.11.7 Social maladies ...... 116 4.11.8 Education ...... 116 4.11.9 Land tenure and use ...... 116

4.11.10 Infrastructure ...... 116 4.11.11 Cultural Heritage and Archaeology ...... 117 4.11.11.1 Previous Archaeological Investigations ...... 117

4.11.11.2 Dvoinoye Project Archaeological Investigations ...... 118 4.11.12 Indigenous peoples ...... 119 4.11.13 Regional Economic Development Strategy ...... 120

4.12 Revisions to Kupol ESIA ...... 121

5.0 ENVIRONMENTAL IMPACT ASSESSMENT METHODOLOGY ...... 122

5.1 Approach ...... 123 5.1.1 Identification of Project and Environment Interactions...... 123 5.1.2 Selection of Biological Components for Assessment ...... 123

5.1.3 Environmental Study Areas ...... 124 5.1.4 Assessment of Environmental Issues and Potential Impacts ...... 124 5.1.4.1 Air Quality ...... 126

5.1.4.2 Hydrology ...... 127 5.1.4.3 Hydrogeology ...... 128 5.1.4.4 Water Quality ...... 129

5.1.4.5 Terrestrial Vegetation and Soils ...... 130 5.1.4.6 Birds and Mammals ...... 130 5.1.4.7 Aquatic Biology...... 131

6.0 SOCIO-ECONOMIC IMPACT ASSESSMENT METHODOLOGY ...... 133 6.1 Socio-economic Study Areas ...... 133 6.2 Methodology ...... 133

6.3 Social Investment ...... 134

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6.4 Monitoring and Evaluation ...... 135

7.0 SOCIO-ECONOMIC IMPACT ASSESSMENT ...... 136 7.1 Key Issue Identification...... 136

7.2 Impact Categories ...... 136 7.3 Economy and Employment ...... 137 7.3.1 Economy and Employment – Potential Impacts (before Mitigation) ...... 137

7.3.2 Economy and Employment - Mitigation and Benefit Maximization ...... 139 7.4 Health, Education and Community Safety ...... 141 7.4.1 Health, Education and Community Safety – Potential Impacts (before Mitigation)...... 142

7.4.2 Health, Education and Community Safety - Mitigation and Benefit Maximization ...... 142 7.5 Land Ownership and Use ...... 144 7.5.1 Land Ownership and Use – Potential Impacts (before Mitigation) ...... 144

7.5.1 Land Ownership and Use - Mitigation and Benefit Maximization ...... 145 7.6 Indigenous Peoples ...... 145 7.7 Cultural Heritage ...... 147

8.0 ENVIRONMENTAL IMPACT ASSESSMENT ...... 148 8.1 Key Issue Identification...... 148 8.2 Construction Phase Impact Assessment ...... 149

8.2.1 Air Quality, Noise, Light and Vibration ...... 149 8.2.2 Groundwater Quantity and Quality ...... 150 8.2.3 Surface Water Quantity and Quality ...... 150

8.2.4 Soils and Sediments ...... 151 8.2.5 Biological Communities ...... 152 8.2.5.1 Vegetation Communities ...... 152

8.2.5.2 Terrestrial Fauna ...... 154 8.2.5.3 Aquatic Communities ...... 155 8.2.6 Biodiversity ...... 156

8.3 Operations Phase Impact Assessment ...... 157 8.3.1 Air Quality, Noise, Light and Vibration ...... 157 8.3.2 Groundwater Quantity and Quality ...... 162

8.3.3 Surface Water Quantity and Quality ...... 163

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8.3.3.1 Underground Mine, Waste Rock and Ore Stockpiles ...... 164

8.3.3.2 Maintenance and Fuelling Areas ...... 164 8.3.3.3 Storm Water ...... 165 8.3.4 Soils and Sediments ...... 165

8.3.5 Biological Communities ...... 166 8.3.5.1 Vegetation Communities ...... 166 8.3.5.2 Terrestrial Fauna ...... 166

8.3.5.3 Aquatic Communities ...... 167 8.3.6 Biodiversity ...... 168 8.4 Closure Phase ...... 169

8.4.1 Air Quality, Noise, Light and Vibration ...... 169 8.4.2 Surface Water and Groundwater Quantity and Quality ...... 169 8.4.3 Soils and Sediments ...... 169

8.4.4 Biological Communities ...... 170 8.4.4.1 Vegetation Communities ...... 170 8.4.4.2 Terrestrial Fauna ...... 170

8.4.4.3 Aquatic Communities ...... 170 8.4.5 Biodiversity ...... 171 8.5 Summary of Environmental Impact Assessment ...... 171

8.6 No Project Alternative ...... 189 8.7 Cumulative Impacts ...... 189 8.8 Effects of Climate Change ...... 189

8.9 Effects of the Environment on the Project ...... 190

9.0 ENVIRONMENTAL AND SOCIAL ACTION PLAN ...... 191

9.1 Management Framework ...... 191 9.1.1 Roles, Responsibilities and Resources ...... 192 9.1.1.1 Education and Training ...... 192

9.1.1.2 Resources ...... 192 9.1.2 Legal Requirements, Standards and International Guidance ...... 193 9.1.3 Goals and Objectives ...... 193

9.1.4 Program Management ...... 193

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9.1.5 Effectiveness Monitoring and Adaptive Management ...... 194

9.1.5.1 Compliance Monitoring ...... 194 9.1.5.2 Reporting of Results ...... 195 9.1.6 Inspections and Audits ...... 196

9.1.7 Communication and Consultation ...... 196 9.2 Biophysical Management Plan ...... 196 9.2.1 Surface Water Quality ...... 197

9.2.2 Soils ...... 197 9.2.3 Air Quality...... 197 9.2.4 Groundwater...... 197

9.2.5 Biological ...... 198 9.2.6 Summary ...... 199 9.3 Monitoring ...... 203

9.3.1 Socio-economics ...... 204 9.4 Operational Management Plans ...... 205 9.4.1 Materials and Waste Management Plan ...... 205

9.4.2 Waste Rock ...... 207 9.5 Critical Incident Preparedness and Response ...... 207 9.5.1.1 Chemical and/or Fuel Spill Outside of the Project Area ...... 210

9.5.1.2 Chemical and/or Fuel Spill within the Project Area ...... 210 9.5.1.3 Fires on or Near the Project Area ...... 211 9.6 Inspection, Audits and Reporting ...... 211

9.6.1 Inspections ...... 211 9.6.2 Audits ...... 211

TABLES Table 2.3-1: Summary Of Air Emission Standards ...... 10 Table 2.3-2: Summary of Air Emission Standards ...... 12 Table 2.3-3: Regulatory Limits for Noise ...... 15 Table 2.3-4: Environmental Design Limit Values for Water Quality...... 16 Table 2.3-5: Summary of Limits for Liquid Effluent ...... 21

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Table 2.3-6: Environmental Design Limit Values for Soils and Sediments ...... 24 Table 3.6-1: Number of Positions to be Filled by Year ...... 37 Table 3.8-1: Construction Phase Activities ...... 40 Table 3.8-2: Operations Phase Activities ...... 42 Table 3.8-3: Closure Phase Activities ...... 45 Table 4.2-1: Regional Meteorological Stations ...... 53 Table 4.2-2: Average Monthly and Annual Temperature Records at Ilirney Meteorological Station...... 53 Table 4.2-3: Average and Maximum Monthly Wind Speed...... 54 Table 4.2-4: Annual Distribution of Wind Direction (%) - Ilirney Station...... 55 Table 4.2-5: Monthly Precipitation - Ilirney Station ...... 55 Table 4.2-6: Snow Accumulation and Water Equivalent- Ilirney Station ...... 56 Table 4.2-7: Air Humidity – Ilirney Station ...... 56 Table 4.5-1: Drill Core Waste Rock Samples ...... 60 Table 4.5-2: Summary of Existing Waste Rock Pile Sampling ...... 60 Table 4.5-3: Summary of Elemental Composition of Underground Waste Rock and Ore ...... 61 Table 4.5-4: Summary of Elemental Composition of Existing Waste Rock Pile ...... 61 Table 4.5-5: Summary of Elemental Composition of Tailings from the TMF ...... 62 Table 4.5-6: Summary of Acid Base Accounting (ABA) Results of Underground Waste Rock and Ore ...... 62 Table 4.5-7: Summary of Acid Base Accounting (ABA) of Existing Waste Rock Pile ...... 63 Table 4.5-8: Summary of Acid Base Accounting (ABA) of Tailings from the TMF...... 63 Table 4.5-9: Acid Generation Potential Classification ...... 63 Table 4.5-10: Summary of Kinetic Testing Results to Week 6 ...... 66 Table 4.6-1: Groundwater Quality in Well No. 2 ...... 70 Table 4.6-2: Monitoring Well Installations...... 71 Table 4.6-3: Groundwater Monitoring Results - June 2012 ...... 71 Table 4.7-1: Watershed Characteristics of Project Streams ...... 74 Table 4.7-2: Typical Flow Cross-Section Characteristics of Project Streams ...... 74 Table 4.7-3: Average Annual Flow in Project Streams ...... 75 Table 4.7-4: Seasonal Flow Distribution in Project Streams ...... 77 Table 4.7-5: Minimum 30-Day Flow with Return Period of 20 Years During the Spring-Summer Season ...... 78 Table 4.7-6: Peak Flows in the Project Streams ...... 79 Table 4.8-1: Water Quality in Project Areas Rivers ...... 80 Table 4.8-2: Sediment Quality in Streams in the Project Area ...... 85

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Table 4.8-3: Water Quality - Former Tailings Facility ...... 86 Table 4.8-4: Composition of Tailings - Former Tailings Facility ...... 88 Table 4.8-5: Surface Water Quality in Waterbodies Along the Dvoinoye-Kupol Road ...... 90 Table 4.8-6: Sediment Quality in Waterbodies Along the Dvoinoye-Kupol Road ...... 91 Table 4.9-1: Soil Quality ...... 93 Table 4.9-2: Soil Quality Along the Dvoinoye-Kupol Road ...... 95 Table 4.9.2-1: Benthic Communities in the Dvoinoye River in the Project Area ...... 102 Table 4.9.2-2: Benthic Communities in Downstream Areas and Adjacent Watercourses...... 102 Table 4.10-1: Areas of Natural Significance ...... 109 Table 4.11-1: HDI Index for Russian Federal Subjects of the Russian Far East...... 111 Table 4.11-2: Municipal Districts ...... 112 Table 4.11-3: Number of Representatives of Indigenous Peoples in Chukotka Municipal Districts...... 119 Table 5.1-1: Assessment Measures Common to All Environmental Components ...... 126 Table 5.1-2: Air Quality Assessment Measures for Indicator Compounds...... 126 Table 5.1-3: Hydrology Assessment Measure for Magnitude ...... 127 Table 5.1-4: Hydrogeology Assessment Measure for Magnitude ...... 128 Table 5.1-5: Water Quality Assessment Measure for Magnitude ...... 129 Table 5.1-6: Terrestrial Vegetation and Soils Assessment Measures for Magnitude ...... 130 Table 5.1-7: Wildlife Assessment Measures for Magnitude ...... 131 Table 5.1-8: Aquatic Life Assessment Measures for Magnitude ...... 131 Table 6.1-1: Classification of Significance of Social Impacts ...... 134 Table 7.3-1: Total Project Tax Payments (Estimates in US $) ...... 137 Table 7.3-2: Impact Assessment - Economy and Employment ...... 141 Table 7.4-1: Impact Assessment - Health, Education and Community Safety ...... 144 Table 7.5-1: Impact Assessment - Land Ownership and Use ...... 145 Table 8.3-1: Sources of Air Emissions from the Project ...... 159 Table 8.3-2: Dispersion Modeling Results ...... 160 Table 8.5-1: Summary of Assessment of Potential Impacts - Construction Phase ...... 172 Table 8.5-2: Summary of Assessment of Potential Impacts - Operations Phase ...... 177 Table 8.5-3: Summary of Assessment of Potential Impacts - Closure and Post-Closure Phase...... 184 Table 9.2-1: Biophysical Environmental Action Plan - Construction Phase ...... 199 Table 9.2-2: Biophysical Environmental Action Plan – Operations Phase ...... 200 Table 9.2-3: Biophysical Environmental Action Plans – Closure and Post-Closure Phase ...... 201

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Table 9.3-1: Summary of Environmental Mitigation and Monitoring Measures ...... 203 Table 9.3-2: Summary Table of Impact, Mitigation Actions and Indicators...... 204

No table of figures entries found.

Figures Figure 1 Project Location Map Figure 2 Road from Pevek to Kupol Figure 3 Schematic Geological Map of the Dvoinoye Deposit Figure 4 Drainage Map Figure 5 Site Plan Figure 5a Detail of Mine Portal Area Figure 5b Detail of Solid Waste Landfill Figure 5c Detail of Fuel Storage, Electrical Generation Station, Accommodation and Office Complex Figure 5d Detail of Fuel Storage Pad and Containment Figure 6a Kupol Road Mapsheet 1 Figure 6b Kupol Road Mapsheet 2 Figure 6c Kupol Road Mapsheet 3 Figure 6d Kupol Road Mapsheet 4 Figure 7 Physiographic Features of Dvoinoye Project Site Figure 8a Vegetation and Soils Kupol Road Alignment Index Map Figure 8b Vegetation and Soils Kupol Road Alignment – Section 1 and 2 Figure 8c Vegetation and Soils Kupol Road Alignment – Section 3 and 4 Figure 8d Vegetation and Soils Kupol Road Alignment – Section 5 Figure 8e Vegetation and Soils Kupol Road Alignment – Section 6 Figure 8f Vegetation and Soils Kupol Road Alignment – Section 7 and 8 Figure 8g Vegetation and Soils Kupol Road Alignment – Section 9 Figure 8h Vegetation and Soils Kupol Road Alignment – Section 10 Figure 8i Vegetation and Soils Kupol Road Alignment – Section 11 and 12 Figure 8j Vegetation and Soils Kupol Road Alignment – Section 13 Figure 8k Vegetation and Soils Kupol Road Alignment – Section 14 Figure 8l Vegetation and Soils Kupol Road Alignment – Section 15 Figure 8m Vegetation and Soils Kupol Road Alignment – Section 16 Figure 9: Regional Meteorological Stations Figure 10 Groundwater Well Monitoring Locations Figure 11 Stream Cross Sections Figure 12 Surface Water Quality and Benthic Community Sampling Locations

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Figure 13 Soil Types of Dvoinoye Project Site Figure 14 Vegetation Communities of Dvoinoye Project Site Figure 15 Archaeology Sites and Investigations Figure 16 Project Study Areas Figure 17a Maximum Predicted 24-hour TSP Concentrations

Figure 17b Maximum Predicted 24-hour PM10 Concentrations

Figure 17c Maximum Predicted 24-hour PM25 Concentrations

Figure 17d Maximum Predicted 1-hour NO2 Concentrations

Figure 17e Predicted Annual Average NO2 Concentrations

APPENDICES APPENDIX A Closure Plan APPENDIX B Geochemical Investigation APPENDIX C Air Quality Modeling APPENDIX D Baseline Studies Reports

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1.0 INTRODUCTION This document presents the Environmental and Social Impact Assessment (ESIA) for the Dvoinoye Gold Project (Project). The document has been prepared for Northern Gold LLC, a wholly owned subsidiary of Kinross Gold Corp., by Golder Consulting (Russia) with the assistance of Golder Associates Ltd. (Golder) of Canada. The ESIA is based on the Dvoinoye Project as defined in the Feasibility Study Report (Hatch, March 2012).

The ESIA is comprised of this, the main document, and a number of appendices that provide technical details on specific study disciplines. This ESIA describes the baseline conditions and assesses the potential environmental and socio-economic impacts of the Project. The ESIA also identifies mitigation measures that will avoid, reduce, compensate for, or reverse impacts, and assesses the residual impacts after mitigation. The ESIA includes an Environmental and Social Management and Monitoring Plan.

The Project is located in the Chukotka Autonomous Okrug [Region] in Far Eastern Russia, north of the Arctic Circle; approximately 112 km north of the existing Kupol mine (Figures 1 and 2).

The Dvoinoye deposit was first discovered in the 1960’s. In 1996, open pit mining commenced at the site with the development of two open pits: the East Pit and the West Pit (Figure 5). A total of 176,620 tonnes of ore were extracted between 1996 and 2007. Infrastructure remaining on the site from previous mining activities included a tailings pond in the valley of the Dvoinoye River between the two pits, a waste rock pile east of the West Pit, and a number of site facilities.

Currently, the mine is in development. The Feasibility Study assumes the development of the deposit through underground mining at an estimated production of 1000 tonnes of ore per day with potential expansion to up to 1500 t/d.

A number of deposits have been identified in the area (Figure 3), of which the most promising is the Zone 37 deposit, located along the north bank of the Dvoinoye River approximately 1 km west of the existing mill site and former tailings facility near the existing West Pit. Deposits in other Zones are considered to be of minor importance.

The Project currently consists of further development of the Zone 37 deposit through underground mining.

Ore processing will be undertaken at the existing processing facility at Kupol. Therefore, the Project includes an all weather transportation corridor from the Dvoinoye mine site to the Kupol mine site, located approximately 112 km to the south. The existing processing and tailings facilities at Kupol will need to be upgraded as a result, and these changes are addressed in the Addendum to the Kupol ESIA, which is provided in a separate document. 1.1 Scope of Work Northern Gold has retained the services of Golder Consulting (Russia) to complete an ESIA for the Dvoinoye Project that meets international standards as developed by the IFC/World Bank. This report presents the ESIA consistent with the IFC standards.

The ESIA scope of work includes:  Regulatory framework review;  Detailed project description;  Baseline studies on the physical, biological and socio-economic environment;

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 Summary of public consultation and information disclosure;  Environmental and socio-economic impact assessment;  Impact mitigation assessment; and  Environmental and social action plans.

1.2 Report Organization This report address the environmental and social impacts associated with the Project through the following sections.

Section 2: Regulatory Framework. The legal and regulatory environment under which the Project is undertaken is addressed in this section.

Section 3: Project Description. This section describes the various activities included in the Project. A description of each activity is provided, and includes the construction, operation, closure and post-closure phases. The project description serves to identify the activities interacting with the environment and needing to be addressed in the impact assessment.

Section 4: Existing Conditions. The existing physical, biological and socio-economic conditions are described in this section. This description serves to establish the baseline conditions against which likely effects of the Project will be assessed.

Section 5: Impact Assessment Methodology. The approach used to assess the environmental impacts is described in this section.

Section 6: Socio-Economic Impact Assessment Methodology. The approach used to assess the socio-economic impacts from the project is described in this section.

Section 7: Socio-Economic Impact Assessment: The socio-economic impacts from the project are described in this section.

Section 8: Environmental Impact Assessment. The environmental impacts of the project activities described in Section 3: Project Description is assessed using the assessment framework described in Section 5.

Section 9: Environmental and Social Action Plan. This section identifies the mitigation and management measures to be implemented to ensure that adverse impacts on the environment are minimized and that potential benefits are maximized. In addition, the monitoring programs that will be used to confirm the impact assessments, confirm the effectiveness of mitigation measures and, if necessary, modify the environmental management plans are described.

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2.0 REGULATORY REQUIREMENTS 2.1 Russian Regulatory Requirements The environmental review and approval procedure in the Russian Federation is highly regulated and constantly evolving. This procedure is referred to as OVOS, which is a Russian abbreviation for ESIA. The OVOS process for the Dvoinoye Project is conducted in parallel with the current ESIA study, by an independent Russian consulting company. While the methods of assessment or data presentation in OVOS may be different from those in the ESIA, the fundamental conclusions of the two studies are typically the same.

This section presents a brief summary of the OVOS procedure, including public consultation. 2.1.1 Russian Participation in International Treaties Russia is party to various international treaties which aim to protect the environment. These include, for example:  Vienna Convention for the Protection of the Ozone Layer, 1985;  Convention on Long-range Transboundary Air Pollution, 1992;  Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal;  The Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter;  Convention on the Transboundary Effects of Industrial Accidents;  Convention on Biodiversity;  Convention on Wetlands of International Importance especially as Waterfowl Habitat;  Convention on the Protection and Use of Transboundary Watercourses and International Lakes done at Helsinki on 17 March 1992;  United Nations Framework Convention on Climate Change;  United Nations Convention to Combat Desertification;  Convention on environmental impact assessment in a transboundary context;  Convention concerning the protection of the world cultural and natural heritage; and  Stockholm Convention on Persistent Organic Pollutants of 2001. A detailed discussion of the Russian participation in international environmental treaties is provided in the Regulatory Review (RREC, 2007 C). 2.1.2 Federal Regulations of the OVOS Process The specific guideline that defines the environmental impact assessment process in Russia, Regulations on Environmental Impact Assessment of Intended Economic and Other Activities in the Russian Federation, (OVOS Guidelines), was introduced by the State Committee of Environmental Protection through the Executive Order No. 372 (May 2000). It was introduced to implement the federal law “About Ecological Expertise” and to define a set of rules for environmental review and approval in Russia. These OVOS Guidelines are currently in force. They

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provide the overall regulatory framework and procedure for OVOS studies and approval process. The environmental studies at the Dvoinoye Project have been designed to meet the requirements of the OVOS Guidelines.

According to the currently effective OVOS Guidelines, the environmental impact assessment contains three steps:  Step 1: Preliminary impact assessment and definition of technical requirements for OVOS (similar to the Scoping Study in Western Practice).  Step 2: OVOS investigations and preparation of Draft OVOS report.  Step 3: Finalizing and integration of the OVOS documents into a Feasibility Study Report, which is submitted to the State Ecological Expertise.

Overall, the Russian OVOS submission contains similar types of information to an international Environmental Impact Assessment (EIA): the purpose of the project, project alternatives, description of the baseline environmental conditions, assessment of potential environmental impacts, proposed mitigation measures, contingency plans, and proposed operational and post-closure monitoring programs. There are, however, several differences that make Russian and international environmental assessment distinct. These include, for example, different focus of public consultation, different role of the project proponent and local authorities in public consultation process. In addition, there is a strong emphasis on the economic implications of environmental releases and land use in Russian OVOS; a cost is attached to the release of different chemicals and the usage of different types of land (e.g., there is a high cost associated with using the riparian zone by constructing a conventional tailings basin, high fees for deforestation, which depend on the forest category).

Relevant environmental regulations that affect preparation and submission of project documentation include:  SP 11-101-95. Procedure of development, coordination, approval and composing of feasibility studies for construction of enterprises, buildings and structures. Ministry of Construction, 1995.  SP 11-102-97, Engineering and environmental investigations for construction. Ministry of Construction, 1997.  Instructions on environmental assessment of business and other activities, Ministry of Environment, 1995.  Requirements to environmental monitoring of mining resources, Ministry of Environment, 2000. 2.1.3 Public Participation The OVOS process, like the international EIA process, requires public participation and review. The public is involved at all three OVOS steps outlined above. The minimum duration for information disclosure and solicitation of public comments is established by regulations at all steps of the OVOS (e.g., a minimum of 30 days is given to public to comment on the OVOS Terms of Reference and the Draft OVOS Submission itself).

During the first two stages, public participation involves advertising the proposed development in the media, consultation meetings, seminars, provision of OVOS documents to the libraries and local authorities for public access, or other forms of discussions with stakeholders.

The last stage of the OVOS process is a formal review of the documents by a panel of experts, referred to as Ecological Expertise. There are two types of ecological expertise:

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 the State Ecological Expertise, which is a mandatory review and approval process by the special review panel of the OVOS submission; and  the Public Ecological Expertise. The Public Ecological Expertise is not mandatory. It is carried out by the interested parties (citizens, public organizations, or local authorities). Public Ecological Expertise must be registered by the State (within seven days of application submission). If there are several parties interested in the Public Expertise, a single joint review panel will be selected. The parties carrying out the Public Ecological Expertise must advise the public about the beginning and the results of the review. The law also enables the State to decline the application for the Public Ecological Expertise under certain circumstances (e.g., confidentiality). Financing of the Public Ecological Expertise is the responsibility of the public organization requesting the review. 2.1.4 Recent Changes in Russian OVOS Regulations As of January 1, 2007, the Russian OVOS review procedure has been changed substantially by due to modifications to the Municipal Construction Code. A new agency, GlavGosJekspertiza, was established to replace several review agencies previously involved with the environmental review. Some experts interpreted the new Code so that the environmental assessment procedure could be modified to the certain extent 2.1.5 Environmental standards 2.1.5.1 Air Quality and Noise The ambient air quality in the Russian federation is regulated and protected under the Federal Law “On Protection of Ambient Air” No.96-FZ, adopted on May 4, 1999. Under the federal laws, specific air quality guidelines have been established:

 Sanitary standards. GN 2.1.6.1338-03. Maximum Acceptable Concentrations (MAC) of contaminants in ambient air of populated areas. Adopted on May 21, 2003.  Sanitary standards. GN 2.1.6.1983-05 Maximum Acceptable Concentrations (MAC) of contaminants in ambient air of populated areas (amendments and revisions #2 to GN 2.1.6.1338-03). Adopted on November 3, 2005.  Sanitary standards. GN 2.1.6.1339-03. Identifies approximate safe levels of influence (OBUV) of pollutants in ambient air of populated areas. Adopted on May 21, 2003.  Sanitary standards. SN 2.2.4/2.1.8.562-96. Noise at the work places, in homes, and public buildings and in residential areas. Adopted on October 31, 1996.  Construction Rules and Standards SNiP 23-03-2003 Protection from noise. Adopted on June 30, 2003.  Sanitary standards. SN 2.2.4/2.1.8.566-96. Industrial vibration, vibration in homes and public buildings. Adopted on October 31, 1996. 2.1.5.2 Water Water resources in Russia are regulated and protected under several federal laws, including  The “Water Code of the Russian Federation”, No. 74-FZ, adopted on June 3, 2006.

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 “On sanitary and epidemiological well-being of the population”, No. 53-FZ adopted on March 30, 1999.  “On Environmental protection”, No. 7-FZ, adopted on January 10, 2002.  Several other federal laws. Specific water quality standards for drinking water, aquatic life protection, and ground water were established under the federal laws. The key water quality guidelines applicable to the Dvoinoye Project are:  List of Fisheries Guidelines, Maximum Acceptable Concentrations and Approximate Safe Thresholds for water bodies with fisheries. M., VNIRO, 1990. Adopted on April 28, 1999.  Urban Drainage, Sanitary Protection of Water Bodies. Sanitary Norms and Regulations. SanPiN 2.1.5.980- 00. Hygienic requirements to surface water protection. Adopted on January 1, 2001.  Sanitary standards GN 2.1.5.1315-03 Maximum Acceptable Concentrations (MAC) of chemicals in drinking and recreation waters. Adopted on April 27, 2003.  Sanitary-epidemiological rules and standards. SANPIN 2.1.4.1074-01. Drinking water. Water quality requirements for the centralized drinking water distribution systems. Quality control. Adopted on September 26, 2001  Sanitary standards. GN 2.1.5.1315-03 Maximum Acceptable Concentrations (MAC) of chemicals in water bodies used for drinking water supply and recreation. Adopted on in April 27, 2003. 2.1.5.3 Wastewater Treatment and utilization of wastewaters is regulated by the following guideline:  Sanitary-epidemiological rules and standards. SANPIN 2.1.7.573-96. Hygienic requirements to utilization of waste waters and their sediments for irrigation and fertilization. Adopted on October 31, 1996. 2.1.5.4 Soil The land use and soil quality in the Russian federation are regulated under several federal laws, including:  The Land Code No.136-FZ, dated October 25, 2001.  The Municipal Construction Code No.190-FZ, dated December 29, 2004.  The Forest Code No.200-FZ, dated October 25, 2001. Under the federal laws, specific soil quality guidelines were established:  Sanitary standards. GN 2.1.7.2041-06. Maximum Allowed Concentrations (MAC) of chemical materials in soil. Adopted on January 19, 2006.  Sanitary Rules SP 2.6.1.798-99. Handling of minerals and materials with elevated content of natural radionuclides. Adopted on December 23, 1999.

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2.1.5.5 Radiation The radiation safety in the Russian federation is regulated by various laws and guidelines. The guideline applicable to the Dvoinoye Project is:  Sanitary Rules SP 2.6.1.758-99. Standards of radiation safety NRB-99. Adopted on July 2, 1999. 2.2 IFC/World Bank The principal international environmental and social requirements that the project should meet include the Equator Principles and the International Finance Corporation (IFC) policies and Performance Standards. The Equator Principles are applied by the majority of the large banks of the world for projects with a capital cost greater than US $50 Million. The IFC Performance Standards and Environmental, Health and Safety Guidelines are the basis of compliance with the Equator Principles. The IFC Performance Standards relevant to the project are as follows:  Assessment and Management of Environmental and Social Risks and Impacts (PS 1);  Labour and Working Conditions (PS 2);  Resource Efficiency and Pollution Prevention (PS 3);  Community Health, Safety and Security (PS 4);  Land Acquisition and Involuntary Resettlement (PS 5);  Biodiversity Conservation and Sustainable Management of Living Natural Resources (PS 6);  Indigenous Peoples (PS 7); and  Cultural Heritage (PS 8). Monitoring of the predicted effects on the social and natural environments is required, as is an adaptive feedback mechanism to take corrective actions where warranted. A reporting system and schedule will need to be established to convey the results of the monitoring and correction actions to management, employees, local communities, regulators and other stakeholders. World Bank (IFC) ESIA Standards The World Bank standards require that ESIAs be prepared following the steps outlined in the World Bank Operational Manual and supporting documents for “Category A” projects, requiring full environmental impact assessments. These include:  Policy, Legal and Administrative Framework, which identifies the local, national and international framework under which the project is undertaken;  Project Description, which identifies the different project activities. Under this step, those project activities that can directly affect the environment are identified. This provides a means by which the project activities are screened to eliminate from further consideration those project activities that would not result in environmental effects. The process serves to focus the assessment on those activities that may have an impact on the physical or human environment. The specific project activities are linked through potential pathways of effect to potential receptors in the environment. The approach is based on the risk assessment

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principles that in order for there to be a potential impact, there needs to be a source of impact (i.e., a project activity), a pathway to the environment, and a receptor or receptors that could be affected. The latter include not just specific species of organisms, but broader ecosystem features, such as habitat;  Baseline Data are collected for the components that are identified as potentially affected by the project through the preceding step;  Environmental and Social Impacts are assessed based on the quantitative data and qualitative information collected in the Baseline studies;  Analysis of Alternatives includes an assessment of alternative means of project delivery to mitigate the predicted impacts. These may involve changes in processes to other technological changes. As well, the alternative of not undertaking the project also needs to be assessed;  Environmental and Social Action Plan describes the management actions to be taken to prevent and/or mitigate any environmental and social effects, and to develop monitoring plans and response plans to address potential concerns; and  Appendices that provide supporting technical documentation for the conduct of the ESIA, including the individuals and organizations contacted; records of consultations with the various groups contacted; the relevant data used in the ESIA; and a list of all associated reports or documents.

The detailed IFC standards that apply to EIAs may be found here. 2.3 Environmental Design Limits The following tables summarize the Regulations applicable to the Project. The Russian Maximum Acceptable Concentrations (MACs) based on protection of fisheries resources are used for water quality. In addition, the tables include regulatory limits established by the WHO or IFC, where these are available. Since the project must meet both Russian and IFC requirements, both are included. The environmental design limits (EDLs) selected for this Project are based on the Russian regulations. Where these are not available, international standards/criteria are used.

Most jurisdictions have developed guidelines for generic use (i.e., in all environments under all exposure conditions and for all receptor species), and by necessity the guidelines are conservatively developed. In many cases, this has resulted in guidelines that are over-protective, since they do not account for local differences in exposure conditions, species that may be affected, or toxicity modifying factors. Many guidelines are based on the results of tests conducted under laboratory conditions that do not account for natural exposure conditions. For example, water quality guidelines are typically based on laboratory toxicity tests where naive laboratory organisms are exposed to substances such as metals that are added in highly soluble form, to waters that are generally lacking in the ligands that occur in natural waters that can complex and render biologically unavailable, a large portion of the metal. As a result, many jurisdictions now recommend the development of site-specific criteria that take into account local environmental conditions that can affect exposure. As a result, exceedances of generic guidelines cannot be considered as indicative of an adverse effect. Rather, exceedance of these guidelines is considered as a trigger for additional toxicity assessment. This often relies on a risk-based approach that considers the environmental concentration of a substance relative to the local exposure conditions, and effects based studies on environmental receptors that are locally relevant.

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Therefore, in this assessment, where predicted concentrations in media are below the EDLs, no impacts are predicted on receptor species that could be exposed via reasonable pathways. Where predicted concentrations exceed the EDLs, the potential effect on receptors is assessed to determine the potential for adverse impact, and identify appropriate mitigation measures.

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Table 2.3-1: Summary of Air Emission Standards

World Health Organization (WHO) Russian IFC Guidelines Environment Regulations(1) Parameter Unit al Design Global update 2005 (6) Limit Values* Interim Interim Interim MAC (2) MAC (3) General (4) Mining (5) Guideline Target-3 Target-2 Target-1

Carbon Monoxide (CO)

Peak 24-hour µg/m³ 5,000 5,000 — — — — — — —

Average 24-hour µg/m³ 3,000 — 3000 — — — — — —

Ozone (O3)

Maximum 8-hour µg/m³ 100 — — — — 100 — — 160

Particulate Matter

Total Suspended particulate (TSP)

Average 24-hour µg/m³ 150 — 150 — — — — — —

Peak 24-hour µg/m³ 500 500 — — — — — — —

PM10 (nominally <10 µm diameter)

Average Annual µg/m³ 50 — 60 — (7) — (8) 20 30 50 70

Maximum 24-hour µg/m³ 100 300 — — (7) — (8) 50 75 100 150

PM2.5 (nominally <2.5 µm diameter)

Average Annual µg/m³ 25 — 35 — (7) — (8) 10 15 25 35

Maximum 24-hour µg/m³ 50 150 — — (7) — (8) 25 38 50 75

Nitrogen Dioxide (NO2)

Average Annual µg/m³ 40 — — — (7) — (9) 40 — — —

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World Health Organization (WHO) Russian IFC Guidelines Environment Regulations(1) Parameter Unit al Design Global update 2005 (6) Limit Values* Interim Interim Interim MAC (2) MAC (3) General (4) Mining (5) Guideline Target-3 Target-2 Target-1

Average 24-hour µg/m³ 40 — 40 — — — — — —

Peak 24-hour µg/m³ 200 200 — — — — — — —

Maximum 1-hour µg/m³ 200 — — — (7) — (9) 200 — — —

Sulphur Dioxide (SO2)

Average 24-hour µg/m³ 50 — 50 — — — — — —

Peak 24-hour µg/m³ 500 500 — — (7) — (9) — — — —

Maximum 24-hour µg/m³ 125 — — — — 20 — 50 125

Maximum 10-minute µg/m³ 500 — — — (7) — (9) 500 — — —

Notes: * Most stringent of Russian or International standards proposed. To be evaluated and revised if necessary based on consultation with the owners representative. (1) – Health Standards (HN2.1.6. 1338-03) Maximum Allowable Concentration (MAC) in ambient are in residential areas. Health Standards (HN 2.1.6. 1983-05) Supplement No. 2 to HN 2.1.6 1338-03. Health Standards (HN 2.1.6 2604-10) Supplement No. 8 to HN 2.1.6. 1338-03. (2) - MAC - Maximum Allowable Concentration, one-time maximum daily (3) - MAC - Maximum Allowable Concentration, average daily. (4) - IFC Environmental Health and Safety Guidelines, April 30, 2007. (5) - IFC Environmental Health and Safety Guidelines for Mining, December 10, 2007. (6) - WHO Global Update (2005). The global update includes guidelines for protecting health and achievable interim targets for measuring progress (October 2005). (7) - IFC provides no value for this, but refers to WHO Global Update 2005. (8) - IFC provides no value for this, but suggests that all dust emissions should be minimized through housekeeping and dust management practices. (9) - IFC provides no value for this, but refers to the General EHS Guideline

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Table 2.3-2: Summary of Air Emission Standards World Health IFC Guidelines Organization (WHO) Environmental General Environmental, Parameter Units Design Limit Health and Safety Guidelines Values (i) (1)(2) Global Update 2005 (3) Small Facilities (3 to 50 MW)

Particulate Matter

Opacity % — — —

Thermal electricity generation kg/MWh — — —

Liquid fuelled engines mg/m³ 50 (4) 50 (4) —

Liquid fuelled boilers mg/m³ 50 (5) 50 (5) —

Solid fuelled boilers mg/m³ 50 (5) 50 (5) —

Off-road diesel engines g/kWh — — —

Dry Gas, Excess O2 content

Gas fuelled engines % 15 15 —

Liquid fuelled engines % 15 15 —

Gas fuelled combustion turbine (3 to <15 MWth) % 15 15 —

Gas fuelled combustion turbine (15 to <50 MWth) % 15 15 —

Liquid fuelled combustion turbine (3 to <15 MWth) % 15 15 —

Liquid fuelled combustion turbine (15 to <50 MWth) % 15 15 —

Gas fuelled boilers % 3 3 —

Liquid fuelled boilers % 3 3 —

Solid fuelled boilers % 6 6 —

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World Health IFC Guidelines Organization (WHO) Environmental General Environmental, Parameter Units Design Limit Health and Safety Guidelines Values (i) (1)(2) Global Update 2005 (3) Small Facilities (3 to 50 MW) Carbon Monoxide (CO)

Stationary combustion turbines ppm — — —

Industrial heaters and boilers g/GJ input — — —

Off-road diesel engines g/kWh — — —

Oxides of Nitrogen (NOX) expressed as NO2

Solid fuelled boilers mg/m³ 650 650 —

Oil / liquid fired boiler mg/m³ 460 460 —

Gas fired boiler mg/m³ 320 320 —

Gas fired combustion turbine (3 to <15 MWth) for electricity ppm 42 42 —

Gas fired combustion turbine (3 to <15 MWth) for mechanical power ppm 100 100 —

Gas fired combustion turbine (15 to <50 MWth) ppm 25 25 —

Liquid fuelled combustion turbine (3 to <15 MWth) for electricity ppm 96 96 —

Liquid fuelled combustion turbine (3 to <15 MWth) for mechanical ppm 150 150 — power

Liquid fuelled combustion turbine (15 to <50 MWth) ppm 74 74 —

Gas fired engines mg/m³ 200 (6) 200 (6) —

Liquid fired engines mg/m³ 1460 (7) 1460 (7) —

Oil / liquid fired boiler mg/m³ 2000 2,000 —

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World Health IFC Guidelines Organization (WHO) Environmental General Environmental, Parameter Units Design Limit Health and Safety Guidelines Values (i) (1)(2) Global Update 2005 (3) Small Facilities (3 to 50 MW) Gas fired boiler mg/m³ — — —

Gas fired combustion turbine (3 to <15 MWth) for mechanical power mg/m³ — — —

Gas fired combustion turbine (15 to <50 MWth) ppm — — —

Liquid fuelled combustion turbine (3 to < 15 MWth) % 0.5 (8) 0.5 (8) —

Liquid fuelled combustion turbine (15 to < 50 MWth) % 0.5 (8) 0.5 (8) —

g/GJ Liquid and Gas Fuelled engines (non-peaking units) — — — output

Liquid fired engines % 1.5 (9) 1.5 (9) —

Most stringent of International standards proposed. To be evaluated and revised if necessary based on consultation with the owners representative * Unless specifically stated otherwise, metric units are used throughout the table (e.g., "t" refers to a metric ton [i.e., tonne], or 1,000 kg) ** Only emission standards associated with the larger potential sources have been included. (1) International Finance Corporation General Environmental, Health and Safety Guidelines (April 30 2007). (2) Emission controls, as set out in these Guidelines should be implemented for Project design purposes. (3) WHO Global Update (2005). The global update includes guidelines for protecting health and achievable interim targets for measuring progress (October 2005). (4) or up to 100 if justified by project specific considerations. (5) - or up to 150 if justified by environmental assessment. (6) for spark ignition. 400 mg/m3 for dual fuel and 1600 mg/m3 for compression ignition. (7) if bore diameter < 400 mm, or up to 1600 if justified to maintain high energy efficiency. If bore diameter > 400 mm, 1850 mg/m3. (8) or lower if commercially available without significant excess fuel cost. (9) or up to 3.0 percent Sulfur if justified by project specific considerations.

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Table 2.3-3: Regulatory Limits for Noise IFC (World Bank Group) Guidelines Environmental Russian (4) Parameter Unit Design Limit Regulations (2)(3) Values (i) General Environmental, Health and Safety Residential and Institutional Receptors Day (7:00 - 22:00) dB(A) 55 55 55 Night (22:00 - 7:00) dB(A) 45 45 45 Industrial and Commercial Receptors Day (7:00 - 22:00) dB(A) 70 70 70 Night (22:00 - 7:00) dB(A) 70 75 70 Most stringent of International standards proposed. To be evaluated and revised if necessary based on consultation with the owners representative 1 - The table contains only Environmental Health and Safety values, not Occupational Health and Safety values. 2 - Health Regulations (SN 2.2.4-2.1.8.562-96) Noise in industrial, commercial and residential places. Ministry of Health, Russia, 1996. 3 - In these regulations Day corresponds to 7:00 - 23:00, and Night 23:00 - 7:00. 4 - International Finance Corporation, General Environmental, Health and Safety Guidelines (April 2007).

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Table 2.3-4: Environmental Design Limit Values for Water Quality

WHO Health Canada Russian Regulations CCME Water Guidelines Guidelines Guidelines

Freshwater Environmental Surface Water Groundwater Agricultural Guidelines (6) Quality Guidelines Parameter Unit Design Limit Quality Quality Values (1) (7) Drinking Drinking Water MAC for Water (4) (5) MAC for potable and Protection of Irrigation Livestock fisheries (2) underground Aquatic Life water (3)

Physio-Chemical pH 6.5-8.5 6.5-8.5 6-9 6.5 - 9.5 (8) 6.5 - 8.5 — — 6.5 - 9

BOD mg/L 2 2 — — — — — —

Oxygen Demand % — — — — — — — —

Dissolved Oxygen mg/L ≥6 ≥6 — — — — — 5.5 -9.5 (9) 500 - 3500 Total Dissolved Solids mg/L 1000 — 1000-1500 1200 (10) ≤ 500 (10) 3000 — (11) Total Suspended Solids mg/L +0.25 - +0.75 +0.25 - +0.75 1.5 — — — — 50

Floating Solids mg/L — — — — — — — —

Turbidity NTU — — 2.6 — narrative (12) — — narrative (13)

Colour TCU — — — — 15 (10) — — narrative (14) Major Ions Calcium mg/L 180 180 — — — — — —

Chloride mg/L 300 300 350 250 (10) 250 (10) 100 - 700 (11) — —

Fluoride / Fluorine mg/L 0.05 0.05 1.2-1.5 1.5 1.5 1 1 - 2 —

Potassium mg/L 50 50 — — — — — —

Magnesium mg/L 40 40 50 — — — — —

Sodium mg/L 120 120 200 — 200 (10) — — —

Sulphate mg/L 100 100 500 500 (15) 500 (10) — 1000 —

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WHO Health Canada Russian Regulations CCME Water Guidelines Guidelines Guidelines

Freshwater Environmental Surface Water Groundwater Agricultural Guidelines (6) Quality Guidelines Parameter Unit Design Limit Quality Quality Values (1) (7) Drinking Drinking Water MAC for Water (4) (5) MAC for potable and Protection of Irrigation Livestock fisheries (2) underground Aquatic Life water (3)

Sulphide mg/L 0.005 0.005 0.003 — — — — —

Hardness mg/L — — — — — — — —

Cyanide-Total mg/L 0.035 0.05 0.035 0.07 0.2 — — —

Ferrocyanide mg/L — — 1.25 — — — — —

Thiocyanide Na/K mg/L 0.1 0.19/0.15 0.1 — — — — —

Metals

Aluminium mg/L 0.04 0.04 0.5 0.1 - 0.2 (16) 0.1 - 0.2 (17) 5 5 0.005-0.1 (18)

Antimony mg/L — — 0.05 0.02 0.006 — — —

Arsenic mg/L 0.05 0.05 0.05 0.01 (P) (19) 0.01 0.1 0.025 0.005

Barium mg/L 0.7 0.74 0.7 0.7 1 — — —

Beryllium mg/L 0.0002 0.0003 0.0002 — — 0.1 0.1 —

Bismuth mg/L 0.1 — 0.1 — — — — —

Boron mg/L 0.5 0.5 0.5 0.5 (T) (20) 5 0.5 - 6 5 — 0.01 (T, A) Bromate mg/L 0.01 — — (20), (21) 0.01 — — —

Cadmium mg/L 0.001 0.005 0.001 0.003 0.005 0.0051 0.08 0.00001

Chromium (Hex) mg/L 0.02 0.02 0.05 — — 0.008 0.05 0.001

Chromium (Tetr) mg/L 0.05 0.07 0.5 — — — — —

Chromium (Tot) mg/L 0.05 — — 0.05 (P) (19) 0.05 — — —

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WHO Health Canada Russian Regulations CCME Water Guidelines Guidelines Guidelines

Freshwater Environmental Surface Water Groundwater Agricultural Guidelines (6) Quality Guidelines Parameter Unit Design Limit Quality Quality Values (1) (7) Drinking Drinking Water MAC for Water (4) (5) MAC for potable and Protection of Irrigation Livestock fisheries (2) underground Aquatic Life water (3)

Cobalt mg/L 0.01 0.01 0.1 — — 0.05 1 —

Copper mg/L 0.001 0.001 1 2 1 (10) 0.2 - 1 (22) 0.5 - 5 (23) 0.002 - 0.004 (24)

Iron (Total) mg/L 0.1 0.1 0.3 — 0.3 (10) 5 — 0.3

Lead mg/L 0.006 0.006 0.03 0.01 0.01 0.2 0.1 0.001 - 0.007 (25)

Lithium 0.08 0.08 0.03 — — 2.5 — —

Manganese mg/L 0.01 0.01 0.1-0.5 0.4 (C) (26) 0.05 (10) 0.2 — —

Mercury mg/L 0.00001 0.00001 0.0005 0.006 0.001 — 0.003 0.000026 0.01 - 0.05 Molybdenum mg/L 0.001 0.001 0.25 0.07 — (27) 0.5 0.073

Nickel mg/L 0.01 0.01 0.1 0.07 — 0.2 1 0.025 - 0.150 (28) 0.02 - 0.05 Selenium mg/L 0.002 0.002 0.01 0.01 0.01 (29) 0.05 0.001

Silicon mg/L 10 — 10 — — — — —

Silver mg/L 0.05 — 0.05 0.1 (30) — — — 0.0001

Strontium mg/L 0.4 0.4 7 — — — — —

Sulphur mg/L 0.05 (31) — — — 0.05 (31) — — —

Tellurium mg/L 0.003 0.003 0.01 — — — — —

Thallium mg/L 0.0001 — 0.0001 — — — — 0.0008 0.015 (P, T) Uranium mg/L 0.01 — — (19)(20) 0.02 0.01 0.2 —

Vanadium mg/L 0.01 0.01 0.1 — — 0.1 0.1 —

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WHO Health Canada Russian Regulations CCME Water Guidelines Guidelines Guidelines

Freshwater Environmental Surface Water Groundwater Agricultural Guidelines (6) Quality Guidelines Parameter Unit Design Limit Quality Quality Values (1) (7) Drinking Drinking Water MAC for Water (4) (5) MAC for potable and Protection of Irrigation Livestock fisheries (2) underground Aquatic Life water (3)

Zinc mg/L 0.01 0.01 5 — 5 (10) 1 - 5 (32) 50 0.03

Nutrients

Nitrate-N mg/L 40 40 45 11 10 — — 13

Nitrate + Nitrite mg/L — — — — — — 100 —

Nitrite mg/L 0.08 0.08 3.3 1 — — 10 0.06

Ammonia mg/L 0.5 0.5 — — — — — 0.019 (33)

Phosphorus (Tot) mg/L 0.0001 — 0.0001 — — — — —

Phosphate mg/L 0.2 0.2 3.5 — — — — —

Organics

Oils and Grease mg/L — — — — — — — —

Detergents mg/L 0.5 0.5 0.5 — — — — — Total Petroleum Hydrocarbons mg/L 0.05 0.05 0.1 — — — — —

Phenols mg/L 0.001 0.001 0.25 — — — 0.002 —

Micro-organisms per Escherichia coli 100mL non detect — — non detect non detect 100 — — per Total coliform 100mL non detect — — non detect non detect 1000 — —

(1) - Most stringent of Russian or International standards proposed, with North American standards used only if no Russian or International Standards available. To be evaluated and revised if necessary based on consultation with the owners representative.

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Table 2.3-4 (continued)

(2) - Standards of fisheries water quality. Russian Fisheries Agency (Rosrybolovstvo), 2010. (3) Health Standards (HN 2.1.5.1315-03). MACs of chemical elements in potable and household waters. Ministry of Health, 2003. Sanitary Regulations and Norms (SanPiN 2.1.4.1074-01) Potable water. Health requirements to potable water supply systems. Quality control (4) - WHO, 2006. Guidelines for Drinking Water, 3rd Edition, Vol1. Incorporation first addendum. Geneva 2006. The International Finance Corporation (IFC) uses the same values." (5) - Health Canada Guidelines for Canadian Drinking Water (March, 2007)." (6) - Canadian Council of Environmental Ministers (CCME) Canadian Environmental Quality Guidelines (2005). (7) - Canadian Council of Environmental Ministers (CCME) Guidelines for the Protection of Aquatic Life, July 2006. (8) - pH has no direct impact on consumers but is one of the most important operational water quality parameters, the optimum pH often being in the range 6.5 - 9.5." (9) - Warm-water biota: early life stages = 6000 µg/L ; other life stages = 5500 µg/L. Cold-water biota: early life stages = 9500 µg/L ; other life stages = 6500 µg/L." (10) - AO - Aesthetic objective. (11) - Depending on crop. (12) - Where possible, filtration systems should be designed and operated to reduce turbidity levels as low as possible, with a treated water turbidity target of less than 0.1 NTU at all times. Where this is not achievable, the treated water turbidity levels from individual filters: 1. For chemically assisted filtration, shall be less than or equal to 0.3 NTU in at least 95% of the measurements made, or at least 95% of the time each calendar month, and shall not exceed 1.0 NTU at any time. 2. For slow sand or diatomaceous earth filtration, shall be less than or equal to 1.0 NTU in at least 95% of the measurements made, or at least 95% of the time each calendar month, and shall not exceed 3.0 NTU at any time. 3. For membrane filtration, shall be less than or equal to 0.1 NTU in at least 99% of the measurements made, or at least 99% of the time each calendar month, and shall not exceed 0.3 NTU at any time. If membrane filtration is the sole treatment technology employed, some form of virus inactivation* should follow the filtration process. (13) - Clear flows: Maximum increase of 8 NTUs from background levels for a short-term exposure (e.g., 24-h period). Maximum average increase of 2 NTUs from background levels for a longer term exposure (e.g., 30-d period). (14) - The guideline for colour is such that the mean absorbance shall not be significantly higher than the seasonally adjusted expected value for the system under consideration. (15) - There is no health-based guideline; however it is recommended that health authorities be notified when concentrations reach this level. (16) - There is no health-based guideline due to insufficient data; however under good operating conditions, concentrations of 0.1 mg/L or less in large water treatment facilities and 0.2 mg/L or less in smaller facilities can be achieved. (17) - Applies only to drinking water treatment plants using aluminium-based coagulants. The operational guidance values of 0.1 mg/L apply to conventional treatment plants, and 0.2 mg/L applies to other types of treatment systems. (19) - P - Provisional guideline value, as there is evidence of a hazard, but the available information on health effects is limited. (20) - T - Provisional guideline value because calculated guideline value is below the level that can be achieved through practical treatment methods. (21) - A - Provisional guideline value because calculated guideline value is below the achievable quantification level. (31) - As sulphide (H2S). (33) - The guideline for ammonia depends on temperature and pH, refer to fact sheet. 34) - Not in consecutive months.

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Table 2.3-5: Summary of Limits for Liquid Effluent

IFC (World Bank Group) Effluent Design Limit Parameter Unit Guidelines Values (1)

Mining (2)

Physio-Chemical

pH 6 - 9 6 - 9

BOD mg/L 50 50

COD mg/L 150 150

Conductivity µS/cm — —

Total Suspended Solids mg/L 50 50

Total Dissolved Solids mg/L — —

Temperature °C + 3 (4) + 3 (4)

Major Ions

Chloride mg/L — —

Fluoride mg/L — —

Sulphate mg/L — —

Free Cyanide mg/L 0.1 0.1

Total Cyanide mg/L 1 1

WAD Cyanide mg/L 0.5 0.5

Total Metals

Aluminum mg/L — —

Arsenic mg/L 0.1 0.1

Boron mg/L — —

Barium mg/L — —

Cadmium mg/L 0.05 0.05

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IFC (World Bank Group) Effluent Design Limit Parameter Unit Guidelines Values (1)

Mining (2)

Chromium (VI) mg/L 0.1 0.1

Total Chromium mg/L — —

Cobalt mg/L — —

Copper mg/L 0.3 0.3

Iron (Total) mg/L 2 2

Lead mg/L 0.2 0.2

Manganese mg/L — —

Mercury mg/L 0.002 0.002

Molybdenum mg/L — —

Nickel mg/L 0.5 0.5

Selenium mg/L — —

Silver mg/L — —

Sulphur mg/L — —

Tin mg/L — —

Uranium mg/L — —

Vanadium mg/L — —

Zinc mg/L 0.5 0.5

Total Metals mg/L — —

Nutrients

Nitrate-N mg/L — —

Nitrite-N mg/L — —

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IFC (World Bank Group) Effluent Design Limit Parameter Unit Guidelines Values (1)

Mining (2)

Ammonia-N mg/L — —

Phosphate mg/L — —

Phosphorus mg/L — —

Organics

Oil and Greases mg/l 10 10

Phenols mg/l 0.5 0.5

Micro-organisms

Total Coliforms per 100mL — —

Escherichia coli per 100mL — —

1 - IFC values are used as initial target values; however, discharges to surface water or groundwater will also have to consider environmental design limit values as identified in Table 3. Total concentrations are assumed unless stated otherwise. 2 - International Finance Corporation (World Bank Group), Revised Environmental, Health and Safety Guidelines for Mining (December 2007). 4 - Effluents may not increase the temperature of the receiving water body by more than this value.

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Table 2.3-6: Environmental Design Limit Values for Soils and Sediments

Russian Soil Quality Regulations CCME Sediment Quality Guidelines

Approximate Permissible Background MAC (2) Freshwater Sediments Marine Sediments Parameter (1) Unit Concentration (3), total

Degraded sandy Degraded Non-degraded Non-degraded Total Solid Content Mobile Elements acidic soils neutral soils Conditions soils Conditions (4) Conditions (5) Conditions (5) (4)

Sulphur mg/kg 160 — — — — —

Nitrate mg/kg 130 — — — — —

Phosphate mg/kg 200 — — — — —

Gasoline mg/kg 0.1 — — — — —

Antimony mg/kg 4.5 — — — — —

Arsenic mg/kg 2 — 2.0 5.0 10.0 17.0 5.9 41.6 7.24

Cadmium mg/kg — — 0.5 1 2 3.5 0.6 4.2 0.7

Chromium (VI) mg/kg 0.1 — — — — —

Chromium (III) mg/kg — 6 — — — —

Chromium (Total) mg/kg — — 90.0 37.3 160 52.3

Cobalt mg/kg — 5 — — — —

Copper mg/kg — 3 33 66 132 197 36 108 18.7

Iron mg/kg — — — — — —

Lead mg/kg 32 6 32 65 130 91.3 35.0 112 30.2

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Russian Soil Quality Regulations CCME Sediment Quality Guidelines

Approximate Permissible Background MAC (2) Freshwater Sediments Marine Sediments Parameter (1) Unit Concentration (3), total

Degraded sandy Degraded Non-degraded Non-degraded Total Solid Content Mobile Elements acidic soils neutral soils Conditions soils Conditions (4) Conditions (5) Conditions (5) (4)

Manganese (6) mg/kg — 300-700 — — — —

Manganese (7) mg/kg 1500 60-140 — — — —

Mercury mg/kg 2.1 — 0.486 0.170 0.70 0.13

Nickel ppm — 4 20 40 80 36 (8) 18 (8) 51.6 (8) 20.9 (8)

Vanadium mg/kg 150 — — — — —

Zinc mg/kg 23 23 55 110 220 315 123 271 124

Notes:

(1) - Total concentrations have been assumed unless stated otherwise. (2) - Health Standards (HN 2.1.7.2041-06.) Maximum Allowable Concentrations of chemical substances in soils. Rospotrebnadsor, 2006. (3) - Health Standards (HN 2.1.7.2511-09) Approximate Permissible Concentrations of chemical substances in soils. (4) - Canadian Council of Ministries of the Environment Guidelines, Updated 2002; Freshwater PEL (Probable Effect Level). (5) - Canadian Council of Ministries of the Environment Guidelines, Updated 2002; Freshwater ISQG (Interim Sediment Quality Guideline). (6) - For different types and conditions of soil, extracted by H2SO4. (7) - For different types and conditions of soil, extracted by acetate-ammonium buffer solution. (8) - No CCME values exist. US National Oceanic and Atmospheric Administration (NOAA) (dry basis) have been selected. Health Regulations (SP 2.6.1.798-99) Handling minerals with high radionuclide concentrations. Ministry of Health, Russia, 1999

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3.0 PROJECT DESCRIPTION The Project Description provided in this section is based on the Feasibility Study Report (Hatch, March 2012), supplemented by additional information collected as part of the on-going baseline studies and through consultations with Northern Gold. It covers the main stages of the project life: construction, operations, closure and post-closure. 3.1 Project Location The Project is located in the Chaunsky district of the Chukotka Autonomous Okrug. The site is approximately 130 km southeast of the Town of Bilibino and approximately 260 km southwest of the Town of Pevek (Figure 2).

The Project is located along the valley of the upper reaches of the Dvoinoye River, in an alpine area, at an elevation of approximately 900 m above sea level (masl), north of the Arctic Circle. The terrain is mountainous, with rock slide and avalanche areas.

The Project area is characterized as arctic tundra. Steep mountain slopes in the area are sparsely vegetated with grasses and sedges due to thin soils. Scree/talus slopes characterize the mountain sides, and vegetation occurs only in isolated patches. Denser, low growing vegetation (grasses, herbs) occurs in the river valleys, and includes a variety of species characteristic of the tundra, as well as some shrubs that occur mainly along river banks.

In the Project area, the Dvoinoye River flows to the southeast through the site, and then turns towards the northeast near the southeast end of the former mine site (Figure 4). From here, the Dvoinoye River flows north-northeast and joins the Levy Yarakvaam River approximately 25 km downstream (north) of the existing mine site. The Pravy Yarakvaam River is located to the south of the existing mine and initially flows to the southeast before turning to the northeast, joining the Levy Yarakvaam River approximately 20 km downstream of the confluence with the Dvoinoye River (Figure 4). The Pravy Yarakvaam River joins the Levy Yarakvaam River downstream of the confluence of the Sredny Yarakvaam River and Dvoinoye River. Lake Goluboye is located along the Sredny Yarakvaam River, approximately 14 km downstream of the mine site (the Sredny Yarakvaam River does not drain directly from the Project site). There is no existing infrastructure located along the Pravy Yarakvaam River, but for the expansion of the mine new facilities will be constructed in the valley of the Pravy Yarakvaam River, including the accommodations complex, offices, storage areas, a water treatment facility, and the explosives store (the existing and proposed mine and supporting infrastructure are shown on Figure 5).

The Project consists of development of an underground mine. As part of the Project, the existing above ground developments (2 open pits, waste rock dumps, tailings areas) have been closed. New portals will be developed for the proposed underground mine near the existing West Pit. Currently, the upper reach of the Dvoinoye River flows through the former West Pit (Photo 2). Development of the mine includes a temporary diversion of the Dvoinoye River around the West Pit and pumping of water from the Pit. The former tailings facility is located along the north bank of the Dvoinoye River approximately 1 km downstream of the West Pit (Photo 1). A closure plan was developed for the former tailings area and was implemented in 2011. (Details on closure of the former tailings area are provided in Appendix A). The East Pit is located along a small tributary (Zhila Creek) of the Dvoinoye River 750 m northeast of the tailings facility and is also addressed in the closure plan for the former mine site.

The existing accommodations will be expanded for use during the construction phase. A new accommodations complex will be built in the valley of the Pravy Yarakvaam River, to the southeast of the existing mine site, for use during the operations phase.

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The Project is located in an isolated area and needs to be entirely self sufficient. Supplies can only be shipped in to the port at Pevek during the ice free period. Therefore, most of the supplies necessary for operation of the mine must be transported to site during the short ice free period, and stockpiled at the site. This includes fuel storage areas for diesel fuel for operation of the electrical generating station and the mining equipment, explosives stores, and camp supplies. Personnel will be flown in on a rotational basis via the Kupol mine where helicopter support is provided. While Pevek is the main landing port for material and equipment destined for Dvoinoye, supplies will also be transported from Magadan via winter and summer roads. 3.2 Project Life Cycle On August 27, 2010, Kinross acquired Northern Gold, which owned the Dvoinoye Deposit and started the exploration program. The proposed project life cycle is as follows:  Exploration: 2010-2012;  Development: 2011-2017 (development is scheduled to continue during mining);  Construction: 2011-2013;  Mining: 2013-2020 (8 years);  Ore processing: 2013-2020; and  Closure: 2020-2022. 3.3 Construction Stage During the construction phase, equipment and material will be transported to the Port of Pevek where it will be stored until it can be transported via winter road to the site.

Clearing, grubbing, and site levelling will be undertaken where infrastructure is to be placed. Site drainage will be constructed in the initial stages. Drainage will be directed to treatment facilities to ensure that runoff does not cause erosion, flooding, or contamination in downstream areas.

In the initial stage, existing access roads will be upgraded and new access roads, where required, constructed. Access roads will be required for borrow areas, which will be opened to provide access to construction materials. Pads will need to be constructed to support some of the structures, and levelling of the ground surface through cut and fill will be required in some areas. The excavated areas will provide materials for construction of the berms for the fuelling facility and explosives plant, as well as pads for various site infrastructure (e.g., temporary ore and waste rock stockpiles). During these activities, erosion protection will be constructed to limit sediment transport to adjacent watercourses where erosion has been identified as an issue. The area is classified as an Arctic desert (discussed in Section 4), and as a result of low precipitation and cold temperatures, erosion will not be a concern in many areas.

The Project is located at higher elevations in rocky terrain and as a result soils are generally lacking in the Project area. Where soils exist, the soils removed during opening of these areas will be stockpiled for future use in rehabilitation. Since there is limited vegetation on site, and since most of the upland areas are comprised of rock, removal of soils and vegetation will be limited to those areas where there is vegetation. These typically occur only in the river valleys at lower elevations. Any removed soils fertile soils (if identified) will be stockpiled and protected

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against erosion for future use in reclamation. Baseline studies have confirmed that there is a lack of fertile soils in most of the area around the Project.

Stockpile and laydown areas will be prepared for equipment and supplies that are brought to site. These are temporary use areas that will be rehabilitated upon completion of construction. Temporary accommodation for construction workers and temporary offices for the construction camp will be in the existing camp area that will be expanded to accommodate additional workers. The existing offices will continue to be used during the construction phase, while new accommodations and office facilities are constructed.

Currently, there are two surface water supply sources permitted by the local authorities:  Reservoir at the Dvoinoye River. The annual intake for 2010 was 10,500 m3; and  Ametyst Creek. The annual intake for 2010 was 11,200 m3. The permits for both water supply sources were issued in December 2009 and are valid until September 30, 2013.

In 2011, a groundwater supply source was identified for the camp (Severnoe Zoloto, 2011). Two wells (active and stand-by) are located in the Pravy Yarakvaam River valley, approximately 1 km downstream of the camp. Both wells draw water from the talik in the fractured zone of the upper carbonaceous rock.

The site infrastructure, including the construction of a water supply pipeline, storage and maintenance areas, permanent accommodations and support facilities such as a paramedic station and offices will be constructed. Construction of facilities where potentially hazardous materials are stored or used, such as fuels and lubricants will include mitigation measures, such as impermeable surfaces and spills containment and clean-up equipment, in order to minimize potential environmental impacts. Fuel storage areas will be constructed and will include berming to contain any spills. A pad to prevent seepage of spilled materials into the underlying soil/rock will be constructed. Spills containment and cleanup materials will be maintained on-site.

Vehicle and machinery maintenance facilities (located both at the portal building and the surface maintenance facility) will have drainage systems constructed that direct water (e.g., wash water) to the treatment facilities.

Waste management systems, including a sewage treatment system for domestic sewage, and a new landfill for solid waste disposal are constructed. The sewage treatment system will continue to use the existing facilities until the new system has been constructed.

Existing pits and the tailings facility from previous mining operations will be closed according to applicable regulations. The existing tailings facility was closed during the summer of 2011. Details on closure of the existing facilities are provided in Appendix A.

Construction of the all weather road to Kupol will be undertaken. Road construction will require berming to protect the permafrost, and prevent slumping of the road. Borrow areas will be identified, and reclaimed upon completion. Some borrow areas will need to be kept open to provide materials for on-going maintenance of the road. In addition, maintenance facilities will be constructed along the road to service and maintain the road in a suitable condition for all-weather used by heavy trucks. 3.4 Operation Stage During the operations phase, the process of removing the ore through underground mining begins.

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The Project as currently defined consists of an underground mine, with development focusing on the Zone 37 deposit (Figure 3). Total project ore tonnage in the Zone 37 deposit that will be mined over the life-of-mine is estimated as 2,108,000 tonnes. The average gold grade is 17.46 g/t, with an average recovery of 95.2%. In addition, silver is recovered in the process, with an average silver grade 21.02 g/t, and a recovery of 78.5% yielding an estimated 1,104,000 ounces of gold and 1,140,000 ounces of silver. The expected Project life-of-mine is 8 years (Hatch 2012).

During operations, ore will be brought to surface and placed in stockpiles for shipment to Kupol. Waste rock that is not used immediately as backfill will be brought to surface and stored in temporary stockpiles at the Rockfill waste stockpile. Some of the waste rock will be used for further processing into cemented rock backfill, with the remainder used as rock fill. The West Pit will be drained, with water pumped to the Dvoinoye River.

Supplies for the mine operations and supporting infrastructure will be shipped to site as needed. 3.5 Closure Stage The closure phase includes a list of activities that are designed to ensure that the Project site is closed in a manner that reduces the potential impacts on the social and natural environment. In the closure phase, the mining activities are terminated and dismantling and closure of the site begins. Closure involves the progressive decommissioning of the site through the removal of infrastructure that will not be needed in the post-closure phase, and the closing of waste management areas in an environmentally acceptable manner. Closure activities typically require up to 2 years to complete. Details on closure activities are provided in Appendix A.

During the closure phase, the storage, warehousing and maintenance areas are dismantled, any potentially hazardous materials such as fuels, oils, lubricants, chemicals and reagents are removed from the site by licensed contractors, and any contaminated soils are remediated. The infrastructure is demolished, and all inert demolition debris will be disposed of appropriately.

Equipment in the underground workings will be removed, where salvage of equipment is practicable. Equipment that cannot be salvaged will be left in place and will be drained of all fluids. Equipment components that could retain residual fluids will be removed, as will vehicle tires. Contaminated soils will be remediated.

Waste disposal areas, such as the landfill and sewage treatment system will be decommissioned.

All closed areas that will not be used in the post-closure phase will be rehabilitated. If there are soils available in the stockpiles created during the construction phase, they will be used as a source of cover material. The closure plan for Kupol will need to be modified to address modifications made as a result of processing the Dvoinoye ore. These include the ore stockpiles, tailings facility, and stormwater management systems. 3.6 Project Components The mine development plan as described in the Feasibility Study involves the following (Hatch, March 2012):  Mining production rate of up to 1000 t/d with expansion up to 1500 t/d with ramp up and ramp down periods;  Dual ramp access via surface portals (East and West Portals);  Ore from the underground mine will be brought to surface via truck and will be temporarily stored on site on constructed pads;

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 Waste rock to be used for cemented and non-cemented rock fill for backfilling in the underground mine;  Transport of ore by truck via an all season road to the existing processing facilities at Kupol; and  Upgrading of the processing facilities at Kupol to process the Dvoinoye ore. Supporting infrastructure for the Project includes:  Portal building that also houses the workshop, store and offices;  An accommodation camp;  Fuel storage and supply;  Power generation and supply;  Water supply and treatment;  Administrative facilities, including gatehouse and security; and  Explosives plant. The operations phase will be similar to the construction phase in that development of the underground mine will involve on-going transport of equipment and supplies to the site, followed by transferral or installation underground. Underground mining activities are supported by facilities for fuelling and servicing underground equipment.

The Project components are discussed separately in the following sub-sections. 3.6.1 Underground Mine The underground mine will be developed through advancement of ramps and drifts from the portals. Access to the mine is through two portal areas: an east portal and a west portal (Figure 5a).

The portal area includes the two portals, surface ventilation fans, fuelling areas, ore stockpiles, cemented rock fill plant and associated facilities, and the portal building. The portal building is located to the east of the East Portal and includes a vehicle maintenance and repair shop for the mining vehicles, emergency vehicle parking, an electrical substation, and offices.

Groundwater infiltration into the mine is not expected since preliminary drilling indicates there is limited or no free water, and permafrost extends to below the lowest planned mining horizon (Hatch 2012). The small amount of water used during production will be removed during the mucking process.

Further underground mine development will proceed through development of drifts and ramps that will require underground blasting. Explosives will be transported to the work site on a just-in-time basis, so that no explosives are stored in the mine. Explosives will be transported underground to the development headings in a dedicated explosives transport truck. During full production, blast times are predicted to occur four times daily: during lunch break and at end of shift on the day and night shifts.

Mined ore will be brought to surface uncrushed via truck haulage and stockpiled at the portal area for shipment by truck to Kupol. Mine vehicles will be equipped with low emissions engines, will operate on low sulphur fuels and

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will be equipped with diesel particulate filters to control emissions. Vehicles will undergo regular maintenance to ensure emissions control measures are operating properly.

Two stockpiles will be developed for shipment of ore to Kupol (Figure 5a). A high grade stockpile will be developed for priority shipment of high grade ore. A low grade stockpile will be developed for shipment to Kupol as truck capacity permits. The ore stockpiles will be protected with berms to control runoff. Runoff and seepage will be directed to the stormwater management system for treatment prior to discharge or re-use.

Waste rock brought to surface will be temporarily placed in the rockfill waste stockpile before being moved to the cemented rock fill (CRF) plant for processing into cemented rock backfill that will be used in the underground mine. The rockfill waste stockpile will be located adjacent to the CRF plant near the East Portal (Figure 5a). The CRF plant consists of two buildings: an aggregate preparation building and a cement preparation and truck loading building. The rockfill waste stockpile will also be equipped with ditching to collect seepage and runoff. Transport of cemented rock backfill underground is planned to be via the West Portal.

During operations, the West Pit will be drained for mine safety reasons before mining of the ore body under the pit commences. The pit currently contains approximately 62,000-75,000 m3 of water. Water quality in the pit indicates that the pit water can be pumped directly to the Dvoinoye River. The Dvoinoye River currently flows through the West Pit, and a temporary diversion channel will be constructed to divert spring runoff south around the pit. The small tributary from the south (Pashkin Kluch Creek) that currently flows through the East Portal area into the West Pit will also be diverted around the pit. The diversions will be lined (due to presence of fractures in the rock) and bermed. Both watercourses will flow through previously disturbed areas, and may receive runoff and seepage from waste rock and ore stockpiles, and working areas around the portals. Sediment traps will be included in the diversion plans, with additional treatment included as required. 3.6.2 Ore Processing at Kupol An all weather haul road will be constructed from the Dvoinoye mine to the existing processing facilities at Kupol (Figures 6a to 6d). Ore from Dvoinoye will be transported to the Kupol facility using dump truck and trailer combinations with a 49 t payload capacity. A fleet of 11 trucks will be required to support the proposed mine production rate of 1000-1500 t/d. Ore delivered to the site from Dvoinoye will be stockpiled in either a single stockpile of approximately 91,000 t capacity or two stockpiles of approximately 46,000 t capacity. At the proposed upgraded throughput of 4500 t/d, the Dvoinoye ore will comprise approximately 22% of the total throughput at Kupol. The stockpile(s) will be constructed within the existing Kupol site, on already disturbed lands. Stockpiles will have seepage/runoff collection ditching that will connect with the existing storm water management system at Kupol.

Modifications are necessary to the processing equipment at Kupol to accommodate the increased throughput from addition of the Dvoinoye ore. The capacity of the mill will be expanded from the original design of 3000 t/d to 4500 t/d. Tests on the Dvoinoye ore indicate that processing of this material will result in less consumption of reagents, and therefore, will require less cyanide use than the existing Kupol ore. Tests showed that a slight increase in grind size to 73 µm, and a decrease in leach time from 90 hrs. to 80 hrs., resulted in similar gold recoveries to that currently attained for the Kupol ore (Hatch 2012). As a result of these tests, upgrades to the processing plant at Kupol were identified, that included changes to the SAG mill screen, the Ball Mill cyclones, the Primary Sampler, pumps and pump motors, thickeners, as well as piping and electrical systems.

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Changes to the existing tailings facility include raising the tailings dam height, and relocation of the seepage collection ditches as the dams are raised. Currently, non-acid generating (NAG) waste rock from Kupol has been used to construct the tailings dams. During the final years of mine life, raising the dams will require quarried rock since the reduction of mining at Kupol will result in less NAG rock being generated. The tailings management facility is currently equipped with a seepage collection system, and a reclaim pump to transfer seepage back into the tailings pond.

The process plant is currently equipped to capture all emissions from the plant. The system includes a wet scrubber in the crusher building, baghouse dust collector in the refinery, a scrubber and fan to remove cyanide vapour, and dust collectors and scrubbers in the assay laboratories. 3.6.3 Explosives Store The explosives store will be located approximately 7 km east by road from the mine and about 2 km from the new accommodations complex (Figure 5). The facility will be protected by fencing and barbed wire and all explosives will be stored in the containers in which they were shipped to site. This location is advantageous because of the natural physiography that provides a natural barrier between the explosives store and the mine site. The proposed facility is also 5 km from the Village of Yar.

The explosives store will be equipped with an ANFO mixing facility. The Feasibility Study notes that explosives will be delivered to the faces and stopes on an as-needed just-in-time basis; no explosives will be stored at the mine. The existing explosives store near the existing mine site (Figure 5) will be decommissioned during the construction phase. The explosives store has been designed to hold 300 t of ammonium nitrate-fuel oil (ANFO) and ammonite explosive, 80t of ammonia nitrate and 3 t of initiators. The facility includes the explosives store, distribution building, preparation plant and laboratory.

The accommodations and office complex are located outside of the blast radius of the storage facility. 3.6.4 Power Supply All electrical power will be provided by on-site generators. There is no off-site electrical power source. The main electrical powerhouse will be located in the area of the accommodations and office complex at the south end of the site (Figures 5 and 5c).

As noted in the Feasibility Study, during construction, 3 diesel generators will be available on-site (2 x 545 kW and a third as backup). Two of these generators will remain on site during operations as backup supply at the mine to provide emergency power for the ventilation units. The generators will be housed in a separate generator building located near the East Portal. As well, a 1 MW generator will be available for the accommodation camp (Hatch, March 2012). Before the permanent power station is commissioned, diesel-fired boilers will be used to provide heating.

During operations, the main power will be supplied by 4 diesel generators of 1.825 MW each and two 545 kW diesel generators. Under normal operations, two units will be used to supply power, one unit will be on standby, and one unit will be undergoing maintenance. An on-site power distribution network with substations will be constructed. Waste heat will be recovered from the generator sets and will be used to heat site facilities.

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Backup power to supply the accommodations and office complex will be provided by three 545 kW diesel generators. Power will be supplied from the main powerhouse via a 13.5kV power cable. The transmission line will follow the site access road to the mine portal area. 3.6.5 Fuel Supply Liquid fuel will be required for the electrical generators and mobile mine equipment. Fuel will be transported to site via ship to the port of Pevek, and from there by truck to the Dvoinoye site. A fuel storage area will be constructed to provide sufficient storage to support 6 months of operation, located near the accommodations and office complexes (Figures 5 and 5c). Fuel storage requirements include 9000 m3 of diesel fuel in three 3000m3 storage tanks, 50 m3 of gasoline, and 100 m3 of oils (in containers). Fuel storage areas will be lined, bermed and provided with spill cleanup materials. The lined and bermed area has sufficient capacity to contain more than 9000 m3 of fuel. Details of the fuel storage facility and containment systems are shown on Figure 5d. The fuel storage area includes fuel unloading and loading systems.

The vehicle fuelling system will be on a constructed concrete pad, graded to drain spills to a sump for collection and disposal. The fuel storage and distribution system will have built-in fire protection systems with automatic shutoff valves, and flame and explosion proof valves on all storage tanks.

Diesel fuel will be supplied to the main electrical powerhouse, the backup powerhouse and the temporary boiler house via pipeline. Pipes will be seamless welded steel, heat traced and insulated, with a minimum ground clearance of 1m. Road crossings will be underground through reinforced concrete culverts.

Additional fuel and lubricant storage areas will be provided at the mine portal area to service above ground and underground equipment. Equipment travelling to surface will be serviced at dispensing stations in the portal areas. Underground equipment will be serviced by underground fuel transfer trucks. 3.6.6 Water Supply Water is required for process use, domestic use and fire-fighting. Estimated daily demand is 178 m3/day for domestic water and 55 m3/day for underground mining equipment (Hatch 2012).

The Project is located in an area of continuous permafrost, and as a result, sources of freshwater are limited. The streams in the Project area are classified as arctic nival streams that are dry (frozen) for most of the year, and seasonally flow as a result of snow melt and rainfall. Due to permafrost conditions, groundwater contribution to stream flow is limited to the shallow thaw zone during the short summer, and isolated taliks that occur in the river valleys.

A suitable supply of domestic water has been identified from taliks in the valley of the Pravy Yarakvaam River approximately 3 km from the accommodations complex. Testing has indicated radon levels in the water are elevated and therefore the water supply system includes aeration treatment to reduce radon levels in the water. Water will be pumped from the wells to the co-located aeration unit, from where it is pumped to the fresh water and fire and service water storage tanks.

The water supply facility is located south of the fuel storage area (Figure 5c). The facility contains two 700 m3 storage tanks for fire water housed in a heated structure. Potable water will be stored in five 19 m3 capacity tanks in insulated and heated containers. Water for the accommodations and office complexes will be distributed in the

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utility corridors connecting these facilities. The facilities are heated and provide sheltered access for personnel between these facilities.

Process and fire water for the mine and portal will be distributed by tanker truck from the main water supply. The water distribution system includes supply of water to the underground mine for use on drills, bolters and diamond drills. Water will be supplied to the underground mine from a main heated tank at the surface from which it is distributed via a heat traced and insulated pipeline to a second heated tank at the 900 Level. Daily water consumption in the mine is estimated as 55 m3/d. 3.6.7 Storm Water Management Storm water (includes both rainfall runoff and snow melt) will be diverted around facilities to avoid contamination of the storm water. Non-contact storm water will be discharged directly to local watercourses. Storm water that has come into contact with site facilities will be directed to the storm water treatment plant. This includes runoff from vehicle wash and maintenance areas, the solid domestic waste area and the production waste landfill area.

Drainage ditches will direct stormwater runoff to the stormwater treatment system. Stormwater runoff from areas not connected to the stormwater collection system will be directed to pits from which the water will be collected by tank truck and transported to the treatment facility. The treatment facility consists of an underground tank equipped with sorption filters, oil trap and UV treatment unit. Treated water will be discharged to the Pravy Yarakvaam River.

The waste rock and the ore stockpiles will be protected with berms to control runoff. Runoff and seepage will be directed to the stormwater management system for treatment prior to discharge or re-use. 3.6.8 Waste Management 3.6.8.1 Mine Waste Rock Mine waste rock will be used as backfill in the mine. Cemented and non-cemented rock fill will be used as backfill as needed. Some areas will not require cemented rock fill, and in these areas, waste rock from the development headings will be moved directly to stopes that do not require cemented rock fill.

Waste rock destined for use as cemented rock fill will be transported to surface and will be initially stored in temporary disposal areas (i.e., the Rockfill waste stockpile, Figure 5a), on constructed pads, until it is needed as backfill. A cemented rock fill (CRF) plant will be constructed near the East Portal. The CRF plant will be supplied with rock fill from the aggregate plant.

The existing waste rock at surface from previous mining operations will be used to supplement waste rock generated during underground mining. The existing waste rock will be used as backfill in the final years of mining.

The Feasibility Study predicts that all waste rock generated by underground mining will be used as backfill, and that all existing waste rock from previous operations will also be used as backfill. As a result, at end of mine life, it is expected that there will be no waste rock left at surface.

Waste rock brought to surface, will be stored on constructed pads. Both new waste rock areas and existing waste rock from previous mining operations will be equipped with seepage and runoff collection since waste rock is expected to contain blasting residues and potentially may also leach some metals.

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3.6.8.2 Tailings Management Ore will be shipped by truck from Dvoinoye to the existing processing facilities at Kupol. Therefore, tailings generated will be disposed of in the existing tailings management facility at Kupol. Studies have shown that the existing tailings dam at Kupol will need to be raised to 565 m to accommodate tailings from Dvoinoye ore.

Due to operation of the Dvoinoye site from 1995 to 2007, tailings were generated on-site at Dvoinoye, and were stored in a tailings management facility located adjacent to the Dvoinoye River. The TMF consisted of two ponds: a flotation tailings pond, and a smaller cyanide tailings pond (Photo 1). A closure plan was developed for the existing tailings facility and the closure works were completed in 2011. The activities undertaken are summarized in Appendix A. 3.6.8.3 Organic and Solid Waste The existing 5 ha site, located 1500 m into the northeastern reach of the Dvoinoye valley adjacent to the West Pit will be closed during the construction phase (Figure 5). A new landfill site for disposal of organic and solid wastes will be opened approximately 1 km east of the portal area on the south side of the Dvoinoye River, west of Rogach Creek (Figure 5 and 5b). The landfill is designed to accommodate domestic and industrial solid wastes that meet the Russian federal waste classifications categories of Class III through Class V. The waste classes are defined as:  Class III: used lubricants, sludge resulting from oil residue removal from tanks, automobile exhaust filters (section for Class III wastes will be lined);  Class IV: oily cleaning materials, and sand, car tires, construction debris, welding slag, solidified waste plastic, domestic garbage, medial waste, mechanical and biological water purification sludges, cesspool sludge and household domestic sewage; and  Class V: waste rock, drilling mud, wood waste, scrap paper and cardboard, ferrous and non-ferrous scrap, waste plastics and other domestic wastes.

Separate areas will be prepared within the landfill site to accommodate the different classes of wastes. The landfill design is shown on Figure 5b.

Waste minimization includes:  Use of used oils for heating; and  Use of waste tires as building materials. Where possible materials will be re-used and recycled to minimize the amount of waste that needs to be disposed of in the landfill. 3.6.8.4 Hazardous Waste Hazardous waste (Class I and II wastes under the Russian federal waste classification system) will be stored in containers and shipped off-site for proper disposal. These wastes include mercury containing wastes, and used batteries containing sulphuric acid.

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3.6.8.5 Sewage Treatment A temporary on-site biological sewage treatment facility with a capacity to treat 100 m3/day has been constructed for the construction phase. The facility is locate din the valley of the Pravy Yarakvaam River near the temporary accommodations camp. The permanent treatment system will be sized to treat 200 m3/d of non-industrial waste.The biological treatment facility will be located in the valley of the Pravy Yarakvaam River, southeast of the permanent accommodations and office complex. Treated sewage would be released either to the Pravy Yarakvaam River or the Dvoinoye River at a location yet to be determined.

Sewage from the accommodations complex, the administration complex, powerhouse and truck shop will be piped to the sewage treatment plant. Piping will be insulated and heat traced to prevent freezing. Treated sewage will be tested prior to discharge to local watercourses. Solid waste from the treatment plant will be disposed of in the solid waste landfill.

Sewage from portal complex, gatehouse and other ancillary facilities will be collected by sewage trucks and will be transported to the sewage treatment plant. 3.6.9 Access Roads Access to site is via an ice road during winter that runs from Pevek to Kupol, a distance of approximately 380 km. During summer there is access to the Federal road connecting Pevek and Bilibino. Northern Gold has constructed an all weather road of 48 km length connecting Dvoinoye with the Federal road between Pevek and Bilibino. However, the Federal road is generally in poor condition, and there is a weight restriction on the road of 10t. Therefore, the current plan calls for shipment of the majority of equipment and supplies to the Dvoinoye site via the winter road. The existing laydown areas at the port of Pevek will be used for temporary storage until the equipment and supplies can be transported to the mine site.

An all season road is being constructed from Dvoinoye to Kupol that generally follows the route of the existing winter road (Figures 6a to 6d). The road will be used for all season transport of ore from Dvoinoye to Kupol. The proposed road alignment is shown on Figures 6a to 6d. The road design width is 12m. A total of 9 dump truck and trailer combinations (42 t) will be used to transport ore to Kupol (a total of 11 truck-trailer combinations will be used). An estimated 36 trips per truck per day will be required to transport 1000 t/d of ore. Currently, winter road traffic involves 41 trips per day from Pevek to Kupol for supplies (26 containers and 15 fuel trucks) and 9 trips per day for shipment of supplies (7 containers and 2 fuel trucks) to Dvoinoye. These trips are limited to the period when the winter road is open.

On-site access roads will be upgraded where there are existing roads, and new roads will be constructed where required. Small stream crossings (intermittent watercourses draining to the Dvoinoye River) will be built as grade crossings. Larger stream crossings will have culverts installed. 3.6.10 Accommodation and Offices The accommodation and office complex is located approximately 2 km southeast of the existing mine site, along the north side of the Pravy Yarakvaam River valley (Figure 5). The offices include administrative offices, a paramedic station, assay laboratory, mine rescue, and warehousing facilities.

The accommodation facilities are designed to accommodate 356 persons. Accommodations are provided by modular units transported to site. The complex will include kitchen and dining facilities, medical facilities with on- site doctor, laundry facilities, gymnasium/exercise facilities, recreation facilities in addition to accommodations.

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Predicted daily water needs for domestic (potable) water as 178 m3/day. The estimated available reserve from the aquifer in the valley of the Pravy Yarakvaam River is 600 m3/day, and therefore sufficient water to meet domestic and mine water (55 m3/day) requirements can be met from local taliks. Domestic sewage treatment is expected to be similar at approximately 200 m3/day.

A separate administration/office complex will be constructed close to the accommodation complex, and will be connected to the accommodation complex by a utility corridor that will provide sheltered access between the facilities. 3.6.11 Truck Maintenance Facility A facility for maintaining trucks and emergency vehicles for medial emergencies and firefighting will be constructed near the accommodations and office complexes. The facility will have garages for emergency vehicles, vehicle wash bay and maintenance bays and associated facilities. 3.6.12 Helicopter Pad The existing helicopter pad will be decommissioned, and a new pad constructed close to the security facilities. The pad will be constructed of compacted fill. Fuelling of the helicopter will take place at Kupol, and therefore there are no fuelling facilities at the site. 3.6.13 Labour Requirements Labour requirements for the mine include crews to carry out drilling, blasting, mucking, hauling (ore and backfill), as well as support personnel. The Feasibility Study Report outlines expected figures for the mine through 2020, summarised in Table 3.6-1. Table 3.6-1: Number of Positions to be Filled by Year Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 Nationals 409 633 664 674 680 605 489 446 372 Expatriates 13 14 14 14 14 10 9 2 2 Total 422 647 678 688 694 615 498 448 374 Source: Hatch, 2012

While there is no formal commitment to maintain certain hiring targets or percentages from the indigenous population, local hiring (including indigenous populations) will be considered a recruiting priority for Dvoinoye. The Dvoinoye Project will strive to hire indigenous people during the construction phase and there is opportunity to hire indigenous people in the areas of camp catering and housekeeping and exploration (Hatch, 2012). 3.7 Assessment of Alternatives In developing the Feasibility Study, several alternatives to constructing and operating the mine have been considered. These are described in the following subsections.

In addition, the “do nothing” or zero alternative (not constructing the project) is assessed in the ESIA. 3.7.1 Ore Processing Two alternatives have been considered for processing of the Dvoinoye ore:

1) Transport the ore by truck to Kupol for processing (Base Case).

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2) Processing of ore at Dvoinoye.

Current base design for the Kupol mill is 3000 t/d which would have to be increased for processing of additional ore (1000 t/d) from Dvoinoye. This would require a number of modifications to the current processing mill, primarily increasing the capacity of the existing machinery. The alternative considered would be additional processing options at Kupol to increase the rate to 4,000 t/d (3000 t/d from Kupol + 1000 t/d from Dvoinoye) or 4,500 t/d (3000 t/d from Kupol + 1500 t/d from Dvoinoye).

Processing of ore at Kupol would have the environmental benefit of minimizing the habitat disturbance at Dvoinoye. Since processing of the ore at Kupol would not result in an expansion of the process plant foot print, but would simply involve upgrade of some equipment, there would be no additional habitat loss.

Transport of ore to Kupol will require the construction of an ore stockpile for the Dvoinoye ore. The Dvoinoye ore will likely be stored on the existing Kupol stockpile pad to minimize loss of habitat.

Processing of the ore at Dvoinoye would require construction of a new processing facility since the existing facility would not be adequate. This would increase the footprint of the disturbed area, since the site would need to accommodate a processing plant and tailings facility. Processing of the ore at Dvoinoye would also increase air emissions locally. 3.7.2 Ore Transport to Kupol The Base Case for ore transport is the construction of an all season road. This would require upgrading the existing winter road and construction of new sections, as well as on-going maintenance during the operations phase. Construction of an all weather road will permit use of larger trucks, on a regular schedule throughout the year. This in turn would result in the need for smaller ore stockpiles at Dvoinoye and Kupol.

The alternative involves shipment of ore along the existing winter road. Ore would be shipped during the period the winter road is operational. Due to weight and speed restrictions shipping will use smaller vehicles, but will likely require more trucks, and more frequent traffic during the winter.

The use of the winter road would have less impact on terrestrial and aquatic habitats since no permanent road bed or stream crossings are constructed, but this would need to be balanced against the loss of habitat to ore stockpiles at Dvoinoye and Kupol and the potential impacts on soils, groundwater and adjacent surface water due to seepage. Since the all season road would follow the alignment of the existing winter road, there is minimal additional habitat disturbance. 3.7.3 Landfill Site Three options were considered for the landfill site. The landfill site will be used to dispose of domestic wastes, hydrocarbon contaminated soils, and some industrial materials.

Option 1: disposal in the former tailings facility;

Option 2: disposal in the former scrap metal storage area; and

Option 3: disposal in a new site located adjacent to (southeast) of the existing scrap metal storage area.

Option 3 was selected, since development of a new disposal site permitted the area to be engineered to accept the various classes of waste in an environmentally acceptable manner.

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The landfill will included a lined cell to accommodate Class III wastes, and will be bermed to prevent leachate from affecting the active groundwater zone, and thereby potentially impacting local surface water courses. Ditching will control runoff to prevent potential impacts to surface water. 3.8 Project Summary Tables 3.8-1 through 3.8-3 summarize the activities to be undertaken during the construction, operation and closure of the mine, and the potential environmental interactions that will be addressed in the Impact Assessment in Sections 7 and 8.

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Table 3.8-1: Construction Phase Activities Potential Environmental and Socio-Economic Project Activity Description Interactions

Site preparation The site is prepared prior to construction of the mine components.  Clearing and grubbing  Vegetation is removed prior to construction of infrastructure. Vegetation is  Limited loss of vegetation and terrestrial habitat in sparse and restricted to low-lying areas in stream valleys. affected areas.  Temporary noise, dust, air quality from equipment.  Access roads  Site access roads are constructed to site infrastructure components  Loss of habitat in affected areas (minor loss due to (portals, fuel storage, electrical generators, borrow areas, sparse vegetation). accommodations and office areas).  Dust and noise due to increased road traffic.  Containment facilities  Containment structures (dams, berms) for fuel and explosives storage are  Loss of habitat in affected areas (minor loss due to constructed using existing fill and borrow materials. sparse vegetation).  Effects on permafrost due to thawing/seepage.  Ground preparation and  Soil/rock removal/excavation for site preparation from all areas where  Potential for increased erosion and sedimentation. levelling infrastructure is to be placed.  Effects on permafrost and soil and groundwater  Levelling (cut and fill) where required. movement.  Soil stockpiling  Soils, where available, will be stockpiled in designated areas for use in  Stockpiles to be protected against erosion as future site rehabilitation. Soils not suitable for re-use to be disposed of needed. appropriately.  Borrow Materials  Borrow areas for sand/gravel/rock are opened to provide construction  Areas will be progressively rehabilitated during materials. operations and closure.  Temporary noise, dust, air quality from equipment. Infrastructure Construction The components supporting the mine operation are constructed.  Stockpiling and Laydown  Construction materials are brought to site and stockpiled in laydown areas.  Hazards due to road traffic. Some stockpile and laydown areas will be progressively rehabilitated at the end of the Construction Phase or early in the Operations Phase. Other areas will continue to be used throughout the Operations Phase.  Ground preparation  Soil/rock removal/excavation for construction of infrastructure. Soils  Temporary loss of habitat in affected areas. suitable for re-use to be placed in stockpiles.  Temporary noise, dust air quality from equipment.  Pads, footings to be constructed for infrastructure.  Water supply  Construction of water supply pipeline from taliks.  Local reduction in stream flows from loss of  Construction of pumping and storage facilities. seasonal groundwater flow.  Route will be rehabilitated upon completion of pipeline.  Loss of small areas of river valley habitat in storage and pumping facilities.

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Potential Environmental and Socio-Economic Project Activity Description Interactions  Electrical supply  Construction of backup electrical supply, including generators and  Loss of habitat in areas where equipment installed distribution system. (minor loss due to sparse vegetation).  Maintenance  Establishment of maintenance facilities for construction equipment.  Potential fuel/lubricant spills could affect shallow Maintenance areas will have spills containment and clean-up. groundwater and nearby surface waters.  Temporary noise, dust, air quality during construction.  Infrastructure  Construction of infrastructure, including ore stockpiles and transfer  Limited loss of some habitat in construction areas. Construction facilities, permanent accommodation, offices, storage and warehousing. Habitat will be reclaimed upon closure.  Temporary noise during construction.  Aerodrome  Construction of helicopter landing field.  Potential dust and air quality concerns. Miscellaneous

 Temporary  Expansion of existing accommodation for construction workers.  Potential for erosion and sedimentation from site Accommodation preparation. Waste Management Components of solid and liquid waste management are constructed. Systems  Waste management  Construction of solid and liquid waste management systems, including  Nuisance conditions that could attract unwanted systems domestic sewage, solid waste landfill and incinerator for construction wildlife. phase and operations phase. Mine Workings Underground mine workings will be constructed progressively during the Operations Phase.  Removal of waste rock  Preparation of temporary waste rock pad/dump.  Erosion and runoff from waste rock could affect local streams and groundwater/permafrost.  Temporary noise, dust, air quality during construction.  Mining equipment  Underground and above-ground equipment is brought to site.  Temporary noise, dust, air quality during construction. Ore Processing at Kupol Temporary stockpile areas will be needed to hold ore from Dvoinoye for processing.

 Construction of ore  Clearing of vegetation and construction of pad.  Loss of terrestrial habitat. stockpile pad (in the event the existing pads cannot accommodate the additional ore)

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Potential Environmental and Socio-Economic Project Activity Description Interactions

Tailings Disposal Facility at The tailings disposal facilities and supporting components are developed at Kupol. Kupol

 TDF Containment  Raising of the TDF containment berm to accommodate additional tailings.  No additional loss of habitat.. All Weather Road from All weather road for trucking of ore from Dvoinoye to Kupol for processing Dvoinoye to Kupol  Road base preparation  Clearing of vegetation and import of fill materials to raise and widen the  Loss of terrestrial habitat. road.  Potential spills to soils of fuels/lubricants, and  Clearing of vegetation from borrow areas and excavation of materials for effects on groundwater. road construction.  Construction of road maintenance facilities, including heavy equipment and fuel storage.  Stream crossings  Ditching to channel runoff to local streams.  Disturbance of fish habitat and sensitive life  Sedimentation ponds to control sediment transport to local streams. stages.  Construction of bridges and installation of culverts.  Increased sedimentation in streams.

Table 3.8-2: Operations Phase Activities Potential Environmental and Socio-Economic Project Activity Description Interactions

Underground Mine Ramps and stopes are advanced as ore is mined.

 Blasting/Excavation  Basting of rock using ANFO. Explosives delivered to the mine as needed,  Dust from blasting and fumes from vehicles. with no storage of explosives in the mine.  Water quality concerns due to dust (TSS) and blasting residues.  Waste rock removal  Some waste rock is used directly as backfill in the mine  Dust from material handling and transport.  Waste rock removed to surface is stored in the temporary rock fill  Water seeping from waste rock may be stockpile for processing into cemented rock fill at the CRF. contaminated with suspended solids and  Stockpile is constructed on a pad with ditching to control runoff and blasting residues. Potential seepage to seepage. groundwater and surface water.  Ore removal  Ore is stockpiled for transfer to trucks for transport to the processing  Water seeping from ore stockpiles may be plant at Kupol. Two stockpiles are constructed: high grade stockpile and contaminated with suspended solids and

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Potential Environmental and Socio-Economic Project Activity Description Interactions low grade stockpile. Stockpiles are constructed on pads with ditching to blasting residues. Potential seepage to control runoff and seepage groundwater and surface water.  Advance ramp portal and  Removal of waste rock to surface stockpiles.  Dust, runoff from waste rock handling. shafts  Stabilization of ramps, shafts.   Diversion of Dvoinoye  Temporary diversion channel will be constructed around the West Pit to  Water quality from discharge of pit water. River around West Pit divert spring snowmelt in the Dvoinoye River around the pit.  The West Pit will be drained through pumping of pit water to the Dvoinoye River.  Install/advance utilities  Advancing of underground works during operations will be similar to a  Dust, runoff from some materials (e.g., aggregate, construction activity with requirements for laydown and assembly areas concrete). for materials associated with electrical, ventilation, refrigeration,  Construction materials waste generation. compressed air, dewatering.  Prepare mineralization  Removal of waste rock and installation of underground equipment.  Dust, runoff from waste rock handling. access  Backfilling  Backfill plant (CRF) uses waste rock.  Crushing and handling may generate dust.  Mobile equipment  Underground and surface motorized equipment fuelling, lubrication,  Air quality effects of exhaust. operation maintenance.  Potential fuel or lubricant spills affecting air and  Surface storage of fuel and lubricants. water quality, mitigated by spills containment and  All areas will have spills containment. treatment prior to discharge.  Compressed air  Operation of compressed air generators.  Noise  Ventilation  Ventilation shafts and equipment are operated.  Noise Dvoinoye-Kupol Road Ongoing maintenance of the road.

 Road Maintenance  Grading of road surface, replenishment of surfacing from borrow areas.  Sedimentation of local streams from erosion.  Servicing and maintenance of heavy road equipment.  Maintenance of drainage systems, sedimentation ponds, culverts and bridges. Ore Processing – at Kupol Crushing, grinding, and processing to produce doré.

 Ore Stockpiling  Ore from Dvoinoye will be stockpiled in separate stockpiles.  Dust from stockpile.  Seepage to groundwater and surface waters.  Ore Crushing  Transfer of ore to temporary stockpile.  Dust collection is incorporated into primary  Stockpile feeds to primary crushing circuit to jaw crusher. crusher.

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Potential Environmental and Socio-Economic Project Activity Description Interactions  Ore grinding  Ore from primary crushing transferred to SAG mill & mixed with process  Potential water quality. water. Slurry from SAG mill feeds to Ball Mill, from which it moves to the Knelson concentrator and further processing.  Ore processing  Gravity separation in Knelson concentrator with subsequent melting.  Air quality mitigated by electrostatic precipitators  Thickening, aeration, cyanide leaching, cyanide destruction using calcium and dust collection (baghouse). hypochlorite, and smelting cycles –. Air fed to electrostatic precipitator and baghouse. Tailings Disposal at Kupol Tailings from processing of Dvoinoye ore disposed of in the existing Kupol tailings storage facility.  Tailings storage facility  TSF will store gravity separation tailings and some cyanide tailings  Seepage water will be collected and pumped back (TSF) (expected cyanide concentration in process stream is <5 ppm and to the TSF. Excess water will be re-used. thiocyanate (SCN) of less than 10 ppm due to cyanide destruction).  TSF has a downgradient collection pond to collect any seepage from the TSF. Seepage will be pumped back to the TSF.  Excess water from the TSF will be re-used in the process plant. Water will be pumped back to the process plant through a pipeline.  Surface drainage in the area will be diverted around the TSF. Ancillary Facilities Additional support facilities for the mine

 Service Water  Central distribution point; piped throughout mine headings.  Water quality, mitigated by treatment.  Access and Interior  Support vehicular traffic during operations phase.  Noise, vibration, emissions. Roads  Heli pad  Helicopter access throughout operations phase.  Noise, vibration.  Boiler plant  Hot water for domestic use will be generated through a combination of  Air quality due to emissions from liquid-fuel electrically and liquid fuel-fired boilers. boilers.  Electrical power – diesel  Two of four units will be operating at any one time, with 1 unit in standby  Air quality, noise. generators and 1 undergoing maintenance.  Fuel storage  Fuel will be brought to site via ship to Pevek, and via winter road to site.  Spills could affect soil, groundwater and local Storage includes 9000 m3 diesel, 50m3 gasoline and 100 m3 oils and surface water quality. lubricants. Spills containment is inherent in the design.  Explosives  Explosives will be stored at a specially constructed site 7 km east of the  Loss of chemicals and explosives could affect soil, main site, and will be shipped to work areas as needed. groundwater and surface water quality. Mitigated by off-site storage and appropriate containment.

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Potential Environmental and Socio-Economic Project Activity Description Interactions  Waste Management  Hazardous and non-hazardous solid waste management facilities,  Air quality, mitigated by waste separation and use including incinerator and landfill. Solid waste disposal will use existing 5 of appropriate disposal. ha facility.  Water quality, mitigated by waste separation and landfill design.  Attraction of nuisance wildlife, mitigated by waste separation and handling, including appropriate containers, cover, etc.  Workforce  Accommodations, ablutions facilities, kitchen, medical station.  Water quality, mitigated by wastewater treatment Accommodations facility.

 Offices, etc.  Offices, warehouse, workshops, maintenance facilities, etc.  Air quality, mitigated by proper storage, use of  Waste water from maintenance areas discharged to storm water system, materials. which is equipped with grit and oil-water separators.  Water quality, mitigated by wastewater treatment facility and zero discharge.  Soil and groundwater quality, mitigated by secondary containment of fuels, lubricants and chemicals, control of site runoff, oil-water separators, etc.

 Potable water  Domestic water supplied from ice lenses in Dvoinoye River valley.  Drawdown of local aquifer.  Sewage treatment  Effluent treatment facility discharging to local watercourse.  Water quality, mitigated by treatment.

Table 3.8-3: Closure Phase Activities

Project Activity Description Potential Environmental and Socio-Economic Interactions Tailings Disposal Facility at Kupol  Tailings Storage Facility  Addressed in Kupol Closure Plan  TSF Access Roads  Addressed in Kupol Closure Plan. Existing Tailings Disposal Facility at Dvoinoye Note: Measures completed in 2011  Tailings Storage Facility  Remove slurry lines, water reclaim lines and pump system and haul to  Minimize seepage to surface water Infrastructure (completed landfill. in 2011)

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Project Activity Description Potential Environmental and Socio-Economic Interactions  Tailings Storage Facility -  Cut a channel through the dam to prevent future ponding.  Minimize seepage to surface water Gravity and Flotation  Re-grade the tailings area using excess dam fill (plus some waste rock) to Tailings Cell (completed form an insulating thermal cover min 1.0m thick. in 2011)  Use waste rock to form an erosion protection prism on the river side.  Tailings Storage Facility -  Cut a channel through the dam to prevent future ponding.  Minimize seepage to surface water Cyanidation Tailings Cell  Use waste rock to form an insulating thermal cover > 1.5 m thick, including (completed in 2011) an internal synthetic anti-percolation element (i.e. a 1.5 mm HDPE geomembrane with geotextile above and below).  TSF Access Roads  The roads will be maintained for monitoring, inspection and maintenance  Provide access, but control erosion and (completed in 2011) into the Post-Closure Phase. sedimentation. Existing Mill at Dvoinoye  Mill Building and  Cleanup and removal of any salvageable components or materials.  Rehabilitation of processing plant area will make Contents  Demolition of all above ground structures. habitat lost during construction and operation  Inert demolition debris will be disposed of in proposed industrial landfill. available.  Cleanup and decommission of gold bearing equipment will be done  Reduce potential for hydrocarbon contamination separately at no charge by a third party. of surface water  Cleanup and decommission of non-gold bearing equipment.  Puncture exposed slabs and cover with a granular soil layer greater than 0.5 m.  Environmental Site Assessment (Phase 2 ESA) to identify any areas and extent of hydrocarbon contamination.  Dispose of hydrocarbon contaminated soil in the new industrial landfill. Existing Open Pits  East Pit and West Pit  Rock mechanics study to define “safe-lines” for each pit.  Reduce potential hazard to public and ungulates.  Construction of 2.5 m high soil barriers around the open pits. Existing Waste Rock Dumps  Waste rock will be used  All waste rock will be used as backfill by end of mine life.  Consider potential ARD-ML impacts to surface as rock fill in water. underground mine. Other Existing Facilities  Existing Heli Pad and  To be decommissioned as part of site development (before closure).  Prevent hydrocarbon contamination of surface Explosives Storage water All Weather Road to Kupol  Road Maintenance  Road will be maintained for heavy vehicle use until Kupol site is  Control erosion and sedimentation of local decommissioned and closed. streams.

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Project Activity Description Potential Environmental and Socio-Economic Interactions  Road will be maintained for light vehicle use after closure for future monitoring and maintaining of the Kupol site Offices and Accommodations  Accommodation Complex  To be closed during final stages of Closure.  Reclamation of disturbed areas.  Salvageable components will be removed from site.  Complex will be dismantled.  Inert demolition debris will be disposed in the industrial landfill.  Offices  Salvageable components will be removed from site.  Reclamation of disturbed areas  Offices will be dismantled.  Inert materials will be disposed in the industrial landfill.  Storage and Warehouse  Any remaining fuels, lubricants or supplies will be removed from the site by  Potential for future spills or releases is eliminated licensed contractors. by removal of fuels and lubricants.  Salvageable components will be removed from site.  Rehabilitation of storage and warehouse areas  Cut up steel tanks into strips and dispose in the industrial landfill. will make habitat lost during construction and  Buildings will be demolished to grade. operation available.  Inert demolition debris will be disposed in the industrial landfill.  Portal Complex / Shop  Any remaining fuels, lubricants or supplies will be removed from the site by  Potential for future spills or releases is eliminated licensed contractors. by removal of fuel and lubricants.  Salvageable components will be removed from site.  Rehabilitation of portal complex will make habitat  Buildings will be demolished to grade. lost during construction and operation available.  Inert demolition debris will be disposed in the industrial landfill. Water Supply System  Water Supply System  To be closed at the final stage of closure.  Small areas of habitat lost during construction and  The supply pipeline will be decommissioned, and pumping and above- operation will be restored. ground distribution system components will be dismantled.  Puncture floor slabs and cover with 0.5 m of rock fill.  Components not removed from site for salvage will be disposed of in the industrial landfill. Ancillary  Heli Pad and explosives  To be closed during the final stage of closure.  Prevent potential hydrocarbon contamination of area (new)  Phase 2 ESA to identify any areas and extent of hydrocarbon surface waters. contamination.  Dispose of hydrocarbon contaminated soil in the new industrial landfill. Waste Management Systems  Industrial landfill  Re-grade and compact top of waste to shed water.  Leachate discharge to surface water.

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Project Activity Description Potential Environmental and Socio-Economic Interactions  Cover facility with >1.5 m of waste rock to act as an insulating thermal  Erosion by river under flood. cover.  Sewage System  The on-site biologic treatment system will be decommissioned and  Small areas of habitat lost will be reclaimed. demolished in the final phase of closure.  Water treatment plant will be salvaged if possible.  Inert demolition debris will be disposed in the industrial landfill.  Puncture floor slabs and cover with 0.5 m of rock fill.  Site Drainage  The on-site storm water treatment tank will be decommissioned, backfilled  Small areas of habitat lost will be reclaimed. and demolished to grade once monitoring indicates acceptable quality  Post-closure site runoff will be of acceptable inflows. quality.  Ditching to be retained upon closure and will be armoured for erosion protection Borrow Areas  Borrow Areas  Will be progressively closed during construction and operations.  Rehabilitation of borrow areas will make habitat  Any remaining areas at closure will be closed and rehabilitated (including lost during construction and operations. contouring of slopes to stable configuration and re-establishment of drainage to blend in with the local landscape). Power Supply System  Power Supply  The power supply (generators and transformers) will be dismantled and  Small areas of habitat lost will be reclaimed. removed.  Prevent potential hydrocarbon contamination of  Superstructure to be dismantled. surface waters.  Inert demolition debris will be disposed in the industrial landfill.  Phase 2 ESA to identify any areas and extent of hydrocarbon contamination.  Dispose of hydrocarbon contaminated soil in the new industrial landfill. Mine Workings  Underground Mine  Progressive backfilling of the underground mine with waste rock will occur  Remove potential hazard to public due to collapse during operations (as required for ground support). to surface.  Rock mechanics assessment of crown pillar stability prior to closure.  Stabilize crown pillars if necessary by backfilling or blasting.

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Project Activity Description Potential Environmental and Socio-Economic Interactions  Underground Equipment  Mobile equipment with salvage value will be removed for salvage.  Reduce potential for hydrocarbon contamination  Equipment not suitable for salvage will remain underground. Equipment of groundwater or surface water. will be drained of fuels and oils, gearboxes and tires will be removed, and  Remediation of contaminated areas will eliminate equipment cleaned and decontaminated. potential exposure.  Fuels, oils, lubricants, solvents, hazardous materials, storage containers, wastes and tires will be removed to surface for safe disposal.  Electrical transformers and substations will be removed to surface for salvage or disposal.  Diesel electric power supply equipment will be decommissioned and disposed.  An environmental audit will be conducted to determine if areas of contamination remain that require remediation.  Identified areas will be cleaned and remediated as appropriate.  Portals, Passes and  The ramp portal(s) will be filled in with rock.  Will prevent humans or wildlife from entering into Raises  All vent raises and fill passes will be capped. underground mine workings.  Ventilation equipment will be decommissioned.  Ore Pad  Remaining ore and surface skim of granular pad to be shipped to Kupol for  Reduce potential for metal contamination of milling. surface waters.  Cover the surface with > 0.3 m of soil.  Small areas of habitat lost will be reclaimed

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4.0 EXISTING ENVIRONMENT Before determining impacts, the existing conditions in the Project area are assessed to provide the baseline conditions against which changes associated with the Project are considered. Since mining activities have been undertaken at the site in the past, the assessment of existing conditions includes an assessment of the potential impacts these activities may have had on the local environment.

The assessment of existing conditions is based upon information from a variety of sources that include:  Kinross Gold Corp. Dvoinoye Project Scoping Study. Report by Hatch, January 2011.  Environmental and Social Impact Assessment Kupol Gold Project, Fareast Russia. Report by BEMA Gold Corp., March 2006.  Technical Report: Engineering and Environmental Survey. Construction of an underground mine and infrastructure at Dvoinoye. Report by VNII-1. March 2011.  Technical Report: Engineering and Environmental Survey. All Weather Road Kupol – Dvoinoye – Yarakvaam. Report by VNII-1. March 2011.  Zoobenthos of watercourses in the area of the Dvoinoye Project. Report by VNII-1, March 2011.  Report on the Aquatic Environment Along the Dvoinoye-Kupol Road. Report by VNII-1, March 2011.  Evaluation of Avalanche and Mudflow Hazards at Dvoinoye Mine of the Chaunsky District, Chukotka Autonomous Area. Report by FE “Kloyma BHEM”, 2010.  Dvoinoye Project Evaluation of Tailings Storage Options at Kupol. Memorandum from AMEC to Clayr Alexander, 29 November 2010.  Report on Changes in the Socio-economic Situation in the Chukotka Autonomous District (Okrug) from 2007 – 2010. Report by DNV, 2010.  Brief Report on the Effectiveness of the Chukotka Mining and Geological Company” in the Chukotka Autonomous District (Okrug). Report by DNV, 2010.  Assessment of Social Impact Associated with the Development of the Dvoinoye Deposit by CJSC CMGC. Report by DNV, 2010.

The review of existing conditions is based entirely upon a desktop review of the available studies conducted by third parties. Golder has not conducted a site investigation or field verification of the information provided and cannot verify the accuracy of the baseline information.

The following subsections provide an overview of the existing conditions at the site, and along the proposed route of the all-weather road. As noted above, the assessment of existing conditions has been compiled from existing data, of which the primary source is the Engineering and Environmental Survey. Construction of underground mine and infrastructure at Dvoinoye (VNII-1, 2011). The information in the following sections has largely been derived from the baseline information provided in the above-noted report, supplemented by other sources where available.

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4.1 Physiography 4.1.1 Mine Site The Project site is located in the Ilirneyskomu Mountain Range, which is part of the Chukchi Anyui tundra plateau. The region is transected by the Okhotsk-Chukotka volcanic belt, characterized by low mountains which reach heights of 500-1500 m. The Project is in an area of continuous permafrost that extends up to depths of 200 m to >500 m. Permafrost is one the of most significant factors to be considered in the Project area, affecting local physiography, soils, vegetation, stream type and flow regimes, and consequently, biological communities as well.

A number of factors have influenced the formation of local landscapes, of which the most significant are:  A cold-humid climate with long cold winters and short cool summers;  Mountainous terrain dissected by numerous river valleys;  The presence of continuous permafrost, and associated cryogenic processes; and  Widespread distribution of bare rock and loose soils/sediments. These processes have lead to the evolution of a landscape dominated by erosional processes that, in turn, have resulted in the formation of shallow valleys with flat, rocky sides, filled with clastic and unconsolidated glacial, gravitational (erosion) and fluvial deposits. The physiographic features are shown on Figure 7.

The steep slopes of the mountain ranges contribute clastic sediments due to weathering of parent rock. Sediments range in size from rock to clay-sized fractions. The mountain slopes are characterized by erosional gullies, rocky outcrops and alluvial fans (Photo 3). While temperatures in the rocky slopes are below zero, the rocks generally do not contain ice.

Watercourses drain the valley bottoms, which are comprised of alluvial soils (generally sand-gravel mix) up to 5 m thick in places. Seasonal thawing is usually limited to the upper 1 m.

Two main landscape types dominate in the area of the Project:  Arctic desert and tundra – generally at elevations of 900-1100 masl, characterized in the upper elevations by steep rocky slopes and in the lower elevations by alluvial fans, and discontinuous patches of vegetation dominated by mosses and lichens (Photo 4); and  River valleys - generally at elevations of 800-900 masl, characterized by relatively gentle slopes with alluvial deposits, and more-or-less continuous shrub-grassland vegetation (Photo 5).

The mine site also contains landscapes altered by previous mining activities. These contain disturbed areas, lacking in vegetation, and are subject to on-going erosional forces.

The major terrain modifying processes in the Project area that could be affected by Project activities are:  Nival processes that result in variable erosion of landscapes, creating hollows, scarps, cirques, etc. Nival processes tend to be more pronounced on south-facing slopes, and can result in considerable scarification of the landscape, affecting vegetation cover through slope movements.

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 Slope processes, often driven by nival processes that result in down-slope transport of sediments that result in the formation of alluvial deposits in the river valleys. These processes account for the generally sparse vegetation cover on mountain slopes, and the accumulation of sediments that support denser vegetation cover in the river valleys.  Permafrost affects terrain through freeze-thaw cycles that can result in ground heaving, solifluction of soils, loss of vegetation cover, and ultimately downslope transport. Permafrost is particularly susceptible to human activity, where denudation of the surface through vegetation clearing can increase thawing and soil movement. 4.1.2 All-Weather Road Much of the road alignment for the Dvoinoye-Kupol Road traverses the same physiographic conditions as noted at the mine site. Nonetheless, there are substantial differences. The physiography along the existing winter road alignment is shown on Figures 8a to 8m.

While the mine site is located at higher elevations near the headwaters of the local rivers (approximately 900 masl), the road alignment crosses a more varied terrain. Close to the Project site, the physiography is similar to the mine, characterized by low mountains, and narrow river valleys. These areas are characterized by arctic-alpine desert and tundra on cryologically influenced stony deposits along exposed bedrock slopes. Further downslope along the Pravy Yarakvaam River, the river valley widens, and is characterized by a network of braided river channels before climbing into higher terrain at the drainage divide between the Pravy Yarakvaam River and the Tytliutin River.

As the road crosses into the Tytliutin River drainage system, the elevations decrease and areas of intermontane, hilly and flat glacial plains predominate. The valley of the Tytliutin River is wide and flat and is criss-crossed by a network of stream channels. As the road alignment descends to lower elevations along the valley of the Tytliutin River and reaches a local low point at Lake Tytyl (approximately 600 masl), tundra, meadows and swamps become more common. These have formed in valleys in areas of alluvial deposits.

Lake Tytyl is one of the largest lakes in the study area. The road traverses the eastern margin of the lake along a flat to hilly glacial plain interspersed with tundra, meadow and swamps.

South of Lake Tytyl, the road alignment follows along relatively low hills (approximately 520 masl) along hilly and flat glacial plains, occasionally descending into river valleys characterized by alluvial deposits, until the decent into the valley of the Maly Anuy River (approximately 450 masl). This area is characterized by low elevations with extensive alluvial deposits. The valley is characterized by poor drainage with the result that there are extensive wetland areas. The river and associated wetlands form a wide valley 1-2 km wide. South of the Maly Anuy River, as the terrain raises again to low mountains, the road traverses along hilly glacial plain, descending once more to alluvial deposits characterized by meadows and wetlands where it crosses the Starichnaya River before turning east into the Kupol site (approximately 750 masl). 4.2 Climate and Meteorology Golder has reviewed two sources of information on climate and meteorology:  Scoping Study Report (HATCH, January 2011); and  Environmental Investigations Report (VNII-1, 2011).

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The Environmental Investigations Report (VNII-1, 2011) provides a more detailed discussion of climate and meteorology (included as Appendix D-1). The report identifies two regional meteorological stations in the vicinity of the Project: Ilirney and Enmuveem (VNII-1, 2011)  The Ilirney Station is located approximately 45 km northwest of the site, at an elevation of 426 m above sea level. Its coordinates are 67020' N- latitude; 168011' E- longitude. The station was opened in 1944.  The Envumeem Station is located approximately 245 km southeast of the site, at an elevation of 78 m above sea level. Its coordinates are 66o23' N- latitude; 173°20' E- longitude. The station was opened in 1942.

For comparison, the Dvoinoye site elevation is approximately 800-1000 m above sea level (masl). The weather records from the Ilirney Station were used in both reports to characterize the climatic conditions at the project site.

Key information about these stations is summarized in Table 4.2-1 below. The locations of the meteorological stations are shown on Figure 9 Table 4.2-1: Regional Meteorological Stations

Years of Operation Station Distance from Elevation1, Station Name Coordinates ID Project Site masl Open Closed

67015’ N 25248 Ilirney 40 km SW 325 1944 Active 167058’ E 68007’ N 25138 Ostrovnoye 307 km W 98 1933 Active 164010’ E 66°23′ N 25336 Enmuveem 245 km SE 78 1942 Active 173°20′ E 1 The Dvoinoye site elevation is approximately 800-1000 m above sea level (masl).

The Ilirney Station was considered to be the most representative of the Project site conditions. Other stations were used as a secondary source of information to supplement the Ilirney weather records as required (VNII-1, 2012). Air Temperature The average annual and monthly air temperatures are summarized in Table 4.2-2. Table 4.2-2: Average Monthly and Annual Temperature Records at Ilirney Meteorological Station Air Temperature Soil Temperature Month Average Absolute Maximum Absolute Minimum

Jan -33.4 -3 -59 -34.7 Feb -33.2 1 -63 -34.7 Mar -28.9 3 -58 -28.1 Apr -18.2 6 -47 -18.1 May -2.6 25 -36 -2.9 Jun 9.4 30 -15 13.4

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Air Temperature Soil Temperature Month Average Absolute Maximum Absolute Minimum

Jul 12.1 33 -6 16.2 Aug 8.5 30 -11 9.8 Sep 0.6 20 -23 0.5 Oct -14.5 15 -40 -15.7 Nov -28.5 1 -51 -28.1 Dec -33.2 6 -58 -36.5 Annual -13.5 33 -63 -13.2

Source: Environmental Investigations Report (VNII-1, 2011), Appendix to Section 3.3, with reference to the governmental publication USSR Climate Reference Book published in 1968

In spring, the average temperature rises above zero in the third 10-day period of May; in the fall the temperature falls below zero in the third 10-day period of September (it is common to use 10-day periods rather than weeks in the Russian hydrological practice). The duration of the no-frost period is 60 days.

Wind Speed and Direction The prevailing winds are easterly and westerly. The average monthly wind speed varies from 0.9 m/s to 2.4 m/s. The wind speed information is summarized in the table below. Table 4.2-3: Average and Maximum Monthly Wind Speed Wind Speed, m/s Month Average Maximum

Jan 0.9 20 Feb 0.9 20 Mar 0.9 20 Apr 1.3 20 May 1.9 21 Jun 2.4 17 Jul 2.1 18 Aug 1.9 21 Sep 1.8 14 Oct 1.2 17 Nov 0.9 21 Dec 9 20

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Wind Speed, m/s Month Average Maximum

Annual 1.4 21

The prevailing wind direction is from the northeast. The average wind speed is 2-3 m/s, gusting up to 35-40 m/s. In winter, blizzards are common and last typically for one day, but may occasionally last up to 3-5 days. The average number of days with blizzard per year is 16 (VNII-1, 2011).

The distribution of wind direction is illustrated below. Table 4.2-4: Annual Distribution of Wind Direction (%) - Ilirney Station N NE E SE S SW W NW Calm 10 3 31 14 8 3 19 12 55

Precipitation The precipitation in the region is driven by the cyclone activity and the atmospheric fronts. The average annual precipitation is 240 mm. The lowest amount of precipitation occurs in March-April.

The largest amount of precipitation falls in July and August (about 20% of the annual amount falls in each month). The snow accumulation ranges from 0.1 to 0.3 m in the exposed areas to 1.5 m in the valleys (due to drifting). The permanent snow cover forms in the last 10 days of September; the ground clears of snow in the late May- early June. Table 4.2-5: Monthly Precipitation - Ilirney Station Monthly Precipitation, mm Month Total Liquid Solid Mixed Jan 17 17 Feb 10 10 Mar 8 8 Apr 8 8 May 7 1 5 1 Jun 19 13 2 4 Jul 49 44 5 Aug 45 37 1 7 Sep 24 6 9 9 Oct 19 1 17 1 Nov 19 19 Dec 15 15

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Monthly Precipitation, mm Month Total Liquid Solid Mixed Annual 240 102 111 27

The first snow starts falling in September. In mid September the first snow cover forms, but usually melts shortly during warm spells. A permanent snow cover establishes in early October and melts in early June. The period of snow cover lasts for 246 days.

The snow accumulation and water equivalent are summarized in the table below. Table 4.2-6: Snow Accumulation and Water Equivalent- Ilirney Station Snow Parameter Oct Nov Dec Jan Feb Mar Apr Average Max Min

Snow depth at month end, cm 10 19 25 29 32 32 31 38 68 21 Snow water equivalent, mm 14 25 40 50 60 68 72 89 130 48

Air Humidity The average air humidity is 71%, with the maximum of 76-80% in September-December and minimum of 57-62% in May-June. Monthly air humidity is summarized below. Table 4.2-7: Air Humidity – Ilirney Station Air Humidity. Month %

Jan 75 Feb 74 Mar 69 Apr 67 May 62 Jun 57 Jul 65 Aug 73 Sep 76 Oct 80 Nov 78 Dec 76 Annual 71 4.3 Air Quality and Noise Existing air quality at the Project site is based on a sample collected in 2010. The air quality monitoring network in Chukotka is scarce. The State Hydrometeorological Agency provides an assessment of baseline air quality

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using standard Russian procedure. The following parameters and results were reported by VNII-1 with reference to the letter from the State Hydrometeorological agency:  Sulphur dioxide - 0.011 mg.m3;  Nitrogen dioxide - 0.056 mg/m3;  Particulates - 0.14 mg/m3;  Carbon dioxide - 1.8 mg/m3; and  Hydrogen sulphide - 0.004 mg/m3. The results indicate that background air quality is within acceptable levels.

Noise levels have not been assessed. Since there is on-going activity at the site, background noise levels will need to be based on regional conditions. 4.4 Geology The Dvoinoye deposit is located at the Far Northeast of Asia above the Arctic Circle in the following physical, geographic and administrative regions:  The Anuisko-Chukotskoye upland (Rakita 1970); and  The Chaunsky Region of the Chukotka autonomous District which is a part of the Federal Fareast District (the economic Region).

The ore body coordinates are as follows: longitude-169,000, and latitude-67, 00. It is covered by maps of the following nomenclature: Q-59-15-A-б-2, Б-а-1.

The Dvoinoye deposit is located within the Ilirmeisky massif. The massif is situated in the zone of the Mesozoic structure at junction of the Anuiskaya folded system and Okhotsko-Chukotsky volcanic belt (Shilo 1970). The gold and silver deposit is classified as a shallow epithermal one.

Considering regional orography, the Dvoinoye deposit belongs to the Anuiasky upland consisting of the system of ridges separated by relatively low areas of latitudinal orientation.

The Dvoinoye deposit is localized at the junction of the Ilirneisky massif and the southern part of the Tytylveemskaya trough (Severnoe Zoloto, 2005, Zolotoptoekt 2009). The Ilirneisky massif is a regional type tectonic structure consisting of gabbro diabase, spilite, tuff and hyperbasite.

The Tytylveemskaya trough is an asymmetric intrusive-effusive structure comprised of the low Cretaceous age volcanic deposits.

Deposit stratigraphy is characterized by the presence of upper structural stage (the low and middle layers of the

Tytylveemskaya suite) and the late Quaternary and Holocene deposits (Figure 3.) The low layers (K1 tt1) consist of various volcanic rocks such as lava, lava breccia, clastolava, and tuff which are of andesite, decite, sometimes basalt composition. These layers make up a monocline with west and northwest dip ranging from 100 to 520.

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The middle layers (K1tt2) consist of acidic volcanic rocks (tuff, tuff lava and lava breccia) of rhyolite composition. They occur with inclination and are widespread on the north and northeast flanks of the ore body. The total thickness of these deposits ranges from 280 m to 290 m.

Magmatic formations are presented by the various deposits of the low Cretaceous intrusive complex.

The loose Quaternary deposits are widespread on water divides, slopes and river valleys. They include post glacial alluvial (aQiv), eluvial-deluvial (edQiv), deluvial solifluction (dsQiv), upper Quaternary glacial (gQiii) and fluvioglacial (fgQiii) deposits. The total thickness of the loose Quaternary deposits is usually a few meters.

Tectonic conditions are characterized by presence of numerous faults of various orientations which divide the ore body into separate blocks. 4.4.1 Geological and Permafrost Hydrogeological Conditions The Dvoinoye deposit is located in the following engineering geological and permafrost hydrogeological regions/districts:  The Chukotsky engineering geological Region (Chapovsky 1977);  The South-Chukotsky geocryological Region (Ershov 1989);  The permafrost District III (Kalabin 1960); and  The Evensko-Chaunsky superbasin of the Okchotsko-Chukotsky hydrogeological Province (Tolstikhin, 1972).

The main feature of the area under study is the presence of continuous permafrost occurring throughout the Project area with the exception of valley bottom taliks. Permafrost thickness varies from 100-200 m within valley bottoms to 200-450 m at higher elevations. During the summer the upper permafrost boundary is defined by the thickness of the thaw layer. The rock temperature at the depth of 15-30 m varies from - 30C to - 50C. The boundary of the zone with mean annual rock temperature fluctuations is not deeper than 10-13 m from ground surface. 4.4.1.1 Composition and properties of unconsolidated deposits and bedrocks Engineering geological and permafrost hydrogeological conditions at the construction sites are fully defined by local relief and geomorphology.

The existing mine site and proposed supporting infrastructure are located in the south east segment of the Project site, along the lower slopes and valley bottoms of the Dvoinoye and Pravy Yarakvaam Rivers. This area includes the existing mine site in the valley of the Dvoinoye River, and the proposed accommodations, office and storage complex in the valley of the Pravy Yarakvaam River. Ground surface elevations vary from 828 m to 901 m (Figure 3).

River valleys have a trough-like profile with flattened valley bottoms due to accumulation of alluvial deposits (Photo 6). Valley bottoms are dry and consist of alluvial deposits of detritus, gravel, rock, cobble and boulders up to 30- 50 cm in diameter. Valley slopes are moderately steep and also consist of rock rubble ranging from sand/gravel sized to boulders.

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At the existing mine site the Upper Quaternary fluvioglacial deposits (fgQIII) lie 7 m to 13 m below the surface. They consist of large detritus and boulders and are classified as the EGU I category deposits. In the valley of the Pravy Yarakvaam River in the area of the proposed electrical power station and office/accommodation complexes, fluvioglacial deposits lie 4.3 m below the surface; these are underlain by the Upper Cretaceous (K1) quartz syenite intrusions which are classified as the category EGU II deposits.

The depth of seasonal thawing ranges from 0.2 m to 3 m in the stream valleys and 2-2.5 m on the watershed divides (VNII-1, 2011). During the winter the thaw layer is completely frozen. At all of the proposed infrastructure sites, soils are slightly saline with the exception of the proposed fuel storage site where soils are non-saline.

The unconsolidated permafrost soils are heaved; their ice content is uneven and ranges from 0.2 m to 0.6 m and more. According to the standards, soils are defined as icy, very icy and extremely icy (State Standards. Soils Classifications).

Icy inclusions are present as nests, crusts, lenses and layers with thickness ranging from 0.1 mm to 2-5 cm. Cryogenic texture is basal and sometimes crustal. Engineering geological exploration wells at the proposed fuel storage site, the electrical power station site, and the accommodation camp site encountered lenses of ice 0.7 m to 2.3 m thick.

The permafrost bedrock (syenites) encountered in the exploration well at the garage site is characterized by low ice content (less than 0.1) and fissure cryogenic texture.

Mine Portal and West Pit (the north-west segment of the deposit) is located on a valley slope of the Dvoinoye River. Site elevations range from 987 m to 1010 m (Figure 3).

The valley has a V-shaped profile with steep slopes covered with detritus and rock rubble ranging from sand/gravel sized to boulders. These deposits were completely disturbed by the previous exploration and mining works and form the loose manmade fill layer (tQIV) which is classified as the category EGU III deposit. At the portal construction site this layer is underlain by the Upper Cretaceous (K1) effusions consisting of quartz andesites. Their categories range from EGU IY to EGU YI.

The permafrost bedrocks (andesites) are encountered at depth ranging from 0.8 m to 5.2 m. Their structure is medium crystalline, texture is porphyritic, and they are of dark grey color. The upper segment of the bedrock is weathered and disintegrated and could be classified as low strength material. The weathered bedrock thickness ranges from 1.6 m to 4.5 m. The bedrock is dissected by numerous micro fissures of various directions and open fissures with opening ranges from 0.1*n mm to 2-10 mm and more. Fissures are filled with clay, film and lenses of ice; micro fissures are filled with quartz and film of ferric hydroxide. The permafrost bedrocks have cryogenic fissure texture; their ice content is less than 0.01.

The loose technogenic permafrost fill consists of a mix of detritus, rubble, boulders, sand and silt; its thickness varies from 3.5 m to 5.2 m. Fill is characterized by low ice content and massive and/or crust cryogenic texture. 4.4.1.2 Geocryological properties and the thermal regime of deposits At the proposed support infrastructure site in the valley of the Pravy Yarakvaam River temperatures immediately below the active zone range from -4.2 °С to -8.4 °С. At a depth of 10 mbgs temperatures ranges from -7.0 °С tо -8.4 °С.

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At the mine portal site temperatures immediately below the active zone range from -4.2 °С to -6.5 °С. At the depth of 9 m temperature is -6.5 °С.

The active zone thickness depends on slope exposure, soil/rock lithological composition, snow cover thickness, topsoil thickness, precipitation, and air temperature. The active zone thickness ranges from 0.2 m to 0.3 m in river valleys and is up to 2.0-2.5 m in the rocky water divide areas. The maximum active zone thickness is observed in August-late September. During the winter the active zone is completely frozen. 4.5 Geochemistry Previous testing on waste rock from the Dvoinoye open pit mine site indicate that the waste rock and ore host visible sulphide minerals and one of the two samples analyzed was classified as potentially acid generating based on the criteria established by MEND (2010). The results of a preliminary ARD study conducted in December 2010 indicate sulphur grades are generally less than 0.2%; however, concentrations of up to 2.3% sulphur have been reported in the waste rock.

Additional samples for geochemical testing were collected in 2011. These included 14 ore samples and 50 waste rock samples collected by Northern Gold from drill cores from the deposit, and 20 samples collected by Golder from drill cores for testing of low grade ore and waste rock. Details on the geochemical testing program including sample locations and depths are provided in Appendix B. Samples of waste rock in the proposed mine are summarized in Table 4.5-1. Table 4.5-1: Drill Core Waste Rock Samples Lithology No. of Samples Ore zone 9 Altered andesite 8 Andesite 15 Low grade ore/footwall 8 Low grade ore/hanging wall 9 Syenite 14 Altered syenite 2 Rhyolite 13 Dacite 1

In addition, 13 samples of tailings were collected from the former tailings facility, and the sampling locations are provided in Appendix B. Samples were also collected from the existing waste rock pile near the West Pit, and the sampling is summarized in Table 4.5-2.

Table 4.5-2: Summary of Existing Waste Rock Pile Sampling Lithology No. of Samples Andesite 14 Syenite 2

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Geochemical testing included trace element analysis, acid-base accounting, acid potential, neutralization potential and short term leach tests. A subset of samples was also selected for kinetic testing.

Summaries of the elemental composition of the rock samples analyzed are provided in Tables 4.5-3 to 4.5-5. Table 4.5-3: Summary of Elemental Composition of Underground Waste Rock and Ore Ag As Al Cd Cu Fe Mo Mn Pb Sb Zn Rock Type µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g Average Crustal 950 0.075 1.8 82,300 3 60 56,300 1.2 14 0.2 70 Abundance Altered Andesite (n=8) Minimum < 2 10 58,800 < 1 2.6 7,600 1 300 9 < 5 17 Maximum 2.0 530 79,000 1.0 57 60,300 8 1,270 29 11 73 Average 2.0 109 69,625 1.0 28 28,612 3.6 4.2 19 6.9 41 Andesite (n=15) Minimum < 2 5 59,300 < 1 2.8 8,200 <1 148 3 < 5 12 Maximum 3.0 241 92,100 < 1 84 61,700 7 1,680 34 10 125 Average 2.1 62 70,427 < 1 31 27,547 2.7 580 22 6.7 47 Syenite (n=16) Minimum < 2 5 53,500 < 1 3.3 9,400 2 256 13 < 5 19 Maximum < 2 284 82,400 < 1 50 36,800 21 814 59 8 91 Average < 2 50 65,031 < 1 16 19,394 5.6 488 29 5.2 46 Rhyolite (n=14) Minimum < 2 6 57,600 < 1 3.5 9,100 <1 79 8 < 5 16 Maximum 2.0 198 76,700 1.0 46 27,300 18 599 53 13 211 Average 2.0 66 66,764 1.0 17 18,200 5.6 372 27 6.1 43 Low Grade Ore / Footwall (n=8) Minimum < 2 33 33,800 < 1 14 16,900 3 77 15 < 5 5.7 Maximum 3.0 203 66,300 2.0 110 19,900 20 208 31 17 161 Average 2.1 93 53,425 1.13 31 18,600 9.8 125 26 8.6 30 Low Grade Ore / Hanging Wall (n=9) Minimum < 2 60 53,100 < 1 13 19,400 <1 140 14 < 5 28 Maximum 3.0 113 69,800 < 1 65 54,200 5 1,100 34 9.0 60 Average 2.1 84 61,322 < 1 36 32,333 2 808 23 5.9 50 Ore Zone (n=9) Minimum < 10 7 7,000 < 1 7.3 8,200 <1 392 28 11 53 Maximum < 10 177 33,900 46 2560 15,700 <1 2,060 1,900 72 3,430 Average < 10 49 17,167 11 479 10,689 <1 905 458 29 782

Table 4.5-4: Summary of Elemental Composition of Existing Waste Rock Pile Ag As Al Cd Cu Fe Mo Mn Pb Sb Zn Rock Type µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g Average Crustal 950 0.075 1.8 82,300 3 60 56,300 1.2 14 0.2 70 Abundance

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Ag As Al Cd Cu Fe Mo Mn Pb Sb Zn Rock Type µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g Waste Rock Pile (n=16) Minimum < 2 51 63,800 < 1 16 20,000 2 413 16 < 5 38 Maximum 4.0 293 76,600 < 1 40 27,000 9 871 65 17 110 Average 2.3 122 71,519 < 1 26 24,256 5.4 4.3 41 8.8 67

Table 4.5-5: Summary of Elemental Composition of Tailings from the TMF Ag As Al Cd Cu Fe Mo Mn Pb Sb Zn Rock Type µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g µg/g Average Crustal 950 0.075 1.8 82,300 3 60 56,300 1.2 14 0.2 70 Abundance Tailings Management Facility Samples (n=13) Minimum 5.0 26 25,200 < 1 26 10,600 1 275 24 13 36 Maximum 9.0 79 65,200 3.0 161 39,400 4 908 170 51 283 Average 8.6 44 37,682 1.3 59 18,931 2.5 4.4 68 38 110

Note: Bolded values exceed the average crustal abundance as presented in Price (1997).

The results of the acid-base accounting are provided in Tables 4.5-6 to 4.5-8. Complete details are provided in Appendix B. Table 4.5-6: Summary of Acid Base Accounting (ABA) Results of Underground Waste Rock and Ore

Rock Sulphur Species (wt %) CO3 Potentials (t CaCO3/1000t) NPR CaNPR Type Total Sulphide (wt %) NP AP CaNP Altered Andesite (n=8) Minimum 0.05 0.02 0.13 1.6 1.4 2.17 0.14 0.02 Maximum 3.49 3.1 1.68 173.4 96.9 28.0 12 2.14 Average 1.17 0.98 0.43 37.5 34.0 7.23 3.55 0.91 Andesite (n=15) Minimum 0.03 0.02 0.02 9.1 1 0.33 0.14 0.01 Maximum 4.52 4.09 1.27 130.8 128 21.2 26.8 7.34 Average 1.28 1.09 0.50 38.27 38.09 8.28 5.56 1.52 Syenite (n=16) Minimum 0.02 0.01 0.11 3.2 0.7 1.83 0.10 0.04 Maximum 2.5 1.78 1.69 110.9 78 28.2 61.8 17.8 Average 0.44 0.32 0.50 28.7 13.2 8.27 13.16 3.86 Rhyolite (n=14) Minimum 0.04 0.03 0.11 3.3 1.4 1.83 0.06 0.04 Maximum 2.43 1.66 0.57 33.6 75.8 9.51 14 3.81 Average 0.76 0.55 0.29 16.7 23.2 4.80 3.45 0.98 Low Grade Ore / Footwall (n=8) Minimum 1.26 0.89 0.03 0.2 34.7 0.50 0.004 0.01 Maximum 1.79 1.37 0.72 21 55.8 12.01 0.48 0.27 Average 1.53 1.18 0.17 8.25 42.5 2.90 0.21 0.07 Low Grade Ore / Hanging Wall (n=9) Minimum 0.51 0.34 0.04 8.2 10.5 0.67 0.20 0.03

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Rock Sulphur Species (wt %) CO3 Potentials (t CaCO3/1000t) NPR CaNPR Type Total Sulphide (wt %) NP AP CaNP Maximum 1.73 1.4 0.23 27.5 43.8 3.84 0.99 0.17 Average 1.15 0.87 0.11 14 27.1 1.83 0.61 0.08 Ore Zone( n=9) Minimum 0.01 0.01 0.32 24.3 0.4 5.34 1.00 0.22 Maximum 1.02 0.78 2.94 229.9 24.4 49.0 574.8 122.6 Average 0.21 0.16 1.02 79.8 4.88 16.98 96.6 20.4

Table 4.5-7: Summary of Acid Base Accounting (ABA) of Existing Waste Rock Pile

Sulphur Species (wt %) CO3 Potentials (t CaCO3/1000t) Rock NPR CaNPR Type (wt Total Sulphide NP AP CaNP %) Waste Rock Pile (n=16) Minimum 0.1 0.05 0.09 3.2 1.5 1.50 0.43 0.12 Maximum 1.57 1.32 0.41 19.4 41.3 6.8 3.8 2.97 Average 0.47 0.33 0.22 10.5 10.3 3.66 1.65 0.71

Table 4.5-8: Summary of Acid Base Accounting (ABA) of Tailings from the TMF

Sulphur Species (wt %) CO3 Potentials (t CaCO3/1000t) Rock Type NPR CaNPR Total Sulphide (wt %) NP AP CaNP Tailings Management Facility Samples (n=13) Minimum 0.1 0.07 0.02 15.7 2.3 0.33 1.23 0.08 Maximum 0.62 0.49 0.58 39.9 15.2 9.7 7.35 1.76 Average 0.36 0.26 0.30 24.1 8.1 5.05 3.72 0.73

Acid generation potential is commonly interpreted according to NP/AP (NPR) ratio according to the guidelines recommended by MEND (2009) and described below:

Table 4.5-9: Acid Generation Potential Classification Acid Generation Potential Criteria Comments

Potentially Acid Generating NPR < 1 Potentially acid generating unless sulphide minerals are non-reactive (PAG)

Possibly acid generating if NP is insufficiently reactive or is depleted at a rate Uncertain 1 < NPR < 2 faster than sulphides.

Non-Acid Generating 2 < NPR Not expected to generate acidity (non-PAG)

For several reasons, no single NPR or sulphur concentration is universally applicable with respect to acid generation prediction. Bulk NP is typically used for the evaluation as the criteria are based on precedent data, most of which were developed using the bulk NP. The use of CaNP in the evaluation provides added understanding of potential neutralization mechanisms. The actual threshold values for a particular test sample

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are material specific, and could depend on several factors, including chemical and mineralogical composition (i.e., presence and amounts of acid generation and neutralization minerals), morphology (i.e., grain size, texture and crystallinity) and site-specific exposure conditions.

The neutralization potential (NP) represents the bulk amount of acidity that the sample can potentially consume or neutralize. The NP is determined by acidifying the sample with sulphuric acid, followed by back-titration using a known buffer to determine the potential amount of acid that can be buffered. Negative NP values indicate that samples contained stored acidity in the form of soluble phases that contribute acidity on dissolution. The carbonate neutralization potential (CaNP) is a calculated value that represents the bulk amount of acidity that the sample can potentially consume through the dissolution of carbonate minerals. The CaNP is calculated from the carbonate content (wt% as CO3) as measured during ABA testing. NP and CaNP are typically compared for the purpose of evaluating the mineralogical source of neutralization potential in a sample. The difference between the NP and CaNP is that the NP represents the ‘bulk’ neutralization potential of all minerals, including carbonate aluminosilicate, silicate and/or other minerals, whereas CaNP is solely based on the carbonate content of a sample. If the NP is approximately equal to the CaNP, the NP is likely attributable to the dissolution of carbonate minerals. In cases where the NP is significantly greater than CaNP, the NP could be overestimated due to the partial dissolution of silicate minerals.

Approximately 48% of the underground waste rock and ore material tested was classified as potentially acid- generating (PAG) based on the neutralizing potential ratio (NPR), and an additional 9% of the samples were classified as PAG when calculating the CaNPR (Carbonate neutralizing potential ratio) using carbonate content. In particular, lithologies in contact with the ore zone, including the altered andesite and low grade ore, reported elevated sulphide concentrations with relatively low neutralization potentials.

A total of 25% of the waste rock pile samples was classified as PAG based on the NPR, and an additional 56% were classified as PAG when calculating the CaNPR using carbonate content.

The proportion of material collected from the existing waste rock pile that was classified as PAG based on NPR (25%) is similar to the proportions reported for the underground andesite (33%) and syenite (25%).

Sulphide-sulphur content was the primary factor affecting the classification of waste rock pile and underground waste rock. All samples classified as PAG based on NPR values below 1 reported greater than 0.3% sulphide- sulphur and only 5% of samples reporting greater than 0.3% sulphide-sulphur were classified as non-PAG.

None of the TMF tailings samples were classified as PAG based on the NPR; however 77% were classified as PAG when calculating the CaNPR using carbonate content. Generally, sulphide-sulphur and carbonate concentrations were lower than those reported in the waste rock and ore samples. Four of the TMF tailings samples reported sulphide-sulphur concentrations exceeding 0.3%; however the NPR values were greater than one for all four samples.

With the exception of base metals, the composition of the existing waste rock is similar to the composition of the underground waste rock and low grade ore.

Results of the short term leach tests show that aluminum concentrations were greater than the EDL criterion in the underground altered andesite and andesite samples. Manganese concentrations were greater than the EDL criterion in the leachates for most samples, including underground waste rock and ore, existing waste rock and

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TMF tailings. As noted in Section 4.7 and 4.8, manganese concentrations were also elevated in groundwater samples and surface water samples downstream of the existing waste rock piles and the former tailings facility.

Despite the presence of acid generation potential in both the waste rock and tailings, and the apparent visual evidence showing oxidation of these materials, there appears to be sufficient buffering capacity such that short term leach tests from these materials have pH values near neutral.

Kinetic testing of waste rock and ore samples is on-going. The results from the initial 6 weeks of testing are summarized in Table 4.5-10.

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Table 4.5-10: Summary of Kinetic Testing Results to Week 6 Waste Rock (6 Cells) Ore (1 Cell) Low Grade Ore (1 Cell) 75th 75th 75th Analyte Unit Minimum Maximum Average Minimum Maximum Average Minimum Maximum Average Percentile Percentile Percentile pH units 5.45 8.51 7.38 7.6075 6.61 8.74 7.8 8.14 6.45 8.23 7.4 7.6 Conductivity µS/cm 30 686 95.8 97 31 87 51.7 58.25 37 121 68.7 88.75 mg/L as Alkalinity 2 28 13.9 17 12 29 17.5 20.25 9 26 13 14.5 CaCO3 mg/L as Acidity 2 20 2.5 2 2 2 2 2 2 2 2 2 CaCO3 Sulphate mg/L 0.5 350 25.7 16.25 1.2 9.8 3.89 5.43 5.2 28 13.25 19 Fluoride mg/L 0.06 0.43 0.18 0.23 0.07 0.2 0.13 0.17 0.19 0.41 0.31 0.36 Chloride mg/L 0.2 3.5 0.38 0.325 0.2 3.3 0.92 1 0.2 3.3 0.98 1.3 Nitrite (as N) mg/L 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 Nitrate (as N) mg/L 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 Ammonia+ mg/L 0.1 0.2 0.11 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Ammonium (N) Phosphorus mg/L 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 (total reactive) Chromium VI µg/L 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Chromium III mg/L 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 Mercury mg/L 0.0001 0.0001 0.00010 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 Silver mg/L 0.00001 0.00001 0.00001 0.00001 0.00001 0.00001 0.00001 0.00001 0.00001 0.00001 0.00001 0.00001 Aluminum mg/L 0.0036 0.134 0.05 0.067 0.0129 0.0242 0.017 0.0178 0.0501 0.154 0.079 0.075 Arsenic mg/L 0.0003 0.038 0.0077 0.007 0.0048 0.008 0.006 0.006 0.0059 0.0085 0.0071 0.0077 Barium mg/L 0.0007 0.051 0.0098 0.00975 0.0004 0.0012 0.0007 0.0009 0.0039 0.0101 0.0057 0.0059 Beryllium mg/L 0.00002 0.0114 0.00035 0.00002 0.00002 0.00002 0.00002 0.00002 0.00002 0.00002 0.00002 0.00002 Boron mg/L 0.0017 0.047 0.010 0.0085 0.0089 0.0303 0.018 0.021 0.0092 0.0179 0.014 0.017 Bismuth mg/L 0.00001 0.00012 0.00002 0.00001 0.00001 0.00005 0.00002 0.00001 0.00001 0.00005 0.00002 0.00001 Calcium mg/L 3 69.3 10.96 7.32 2.27 3.64 2.76 3.08 3.57 4.15 3.89 4.06 Cadmium mg/L 0.000003 0.000194 0.000010 0.000003 0.000003 0.000006 0.000004 0.000003 0.000003 0.000005 0.000003 0.000003 Cobalt mg/L 0.000002 0.213 0.008 0.00023 0.000002 0.000085 0.000039 0.000062 0.000002 0.000111 0.00006 0.000089 Chromium mg/L 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 Copper mg/L 0.0005 0.025 0.002 0.0006 0.0005 0.001 0.0007 0.0008 0.0005 0.0009 0.0006 0.0008

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Waste Rock (6 Cells) Ore (1 Cell) Low Grade Ore (1 Cell) 75th 75th 75th Analyte Unit Minimum Maximum Average Minimum Maximum Average Minimum Maximum Average Percentile Percentile Percentile Iron mg/L 0.003 9.68 0.27 0.003 0.003 0.003 0.003 0.003 0.003 0.013 0.0048 0.004 Potassium mg/L 0.51 17.4 2.84 3.1375 0.702 1.65 1.038 1.178 1.6 4.09 2.39 2.38 Lithium mg/L 0.003 0.074 0.015 0.0155 0.012 0.06 0.033 0.0478 0.025 0.092 0.057 0.077 Magnesium mg/L 0.496 31.3 4.3 2.9 1.09 1.73 1.275 1.33 1.01 1.7 1.48 1.6 Manganese mg/L 0.0079 1.11 0.11 0.03 0.00885 0.0164 0.013 0.015 0.00701 0.015 0.011 0.012 Molybdenum mg/L 0.0022 0.09 0.02 0.03 0.005 0.03 0.02 0.02 0.006 0.04 0.02 0.02 Sodium mg/L 0.26 10 3.17 4.5 2.65 10.9 6.25 8.43 1.57 14.5 7.7 12.8 Nickel mg/L 0.0001 0.17 0.006 0.0004 0.0001 0.0001 0.0001 0.0001 0.0001 0.0002 0.00012 0.0001 Phosphorus mg/L 0.009 0.016 0.009 0.009 0.009 0.015 0.01 0.009 0.009 0.017 0.010 0.009 Lead mg/L 0.00002 0.002 0.0002 0.0002 0.0001 0.0006 0.0003 0.0003 0.00002 0.00005 0.00003 0.000045 Antimony mg/L 0.0008 0.0044 0.0021 0.0023 0.004 0.009 0.006 0.006 0.002 0.0036 0.003 0.003 Selenium mg/L 0.001 0.01 0.0021 0.0023 0.001 0.002 0.0012 0.001 0.001 0.001 0.001 0.001 Silicon mg/L 0.65 1.32 0.88 0.92 0.6 1.2 0.84 1.08 0.66 1.2 0.79 0.76 Tin mg/L 0.00015 0.00294 0.0008 0.0009 0.00034 0.00162 0.00078 0.001 0.00018 0.0015 0.0005 0.0005 Strontium mg/L 0.0553 0.839 0.187 0.20 0.117 0.198 0.14 0.153 0.147 0.21 0.19 0.21 Titanium mg/L 0.0001 0.0008 0.0002 0.0002 0.0001 0.0007 0.0002 0.0001 0.0001 0.0008 0.0003 0.00035 Thallium mg/L 0.00002 0.00047 0.00005 0.00003 0.00002 0.00003 0.00002 0.00002 0.00002 0.00003 0.00002 0.00002 Uranium mg/L 0.000463 0.0793 0.016 0.025 0.000019 0.00018 0.0001 0.00017 0.000023 0.00052 0.00034 0.0004 Vanadium mg/L 0.00003 0.00044 0.00017 0.0002 0.0004 0.0006 0.0005 0.0005 0.0014 0.0024 0.0018 0.0021 Tungsten mg/L 0.00003 0.0025 0.0004 0.0005 0.00012 0.00048 0.00032 0.00039 0.0011 0.003 0.0017 0.0021 Yttrium mg/L 0.000006 0.00621 0.0002 0.00005 0.000001 0.000005 0.000002 0.0000028 0.000005 0.00001 0.000008 0.000009 Zinc mg/L 0.002 0.02 0.0028 0.002 0.002 0.002 0.002 0.002 0.002 0.002 0.002 0.002

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The results of the kinetic testing to date show that mean concentrations of aluminum, copper and manganese slightly exceed the EDLs. Aluminum and copper concentrations in the leachate from the waste rock samples are similar to concentrations in the Dvoinoye River downstream of the existing waste rock piles (water quality in the Dvoinoye River is discussed in Section 4.8). 4.6 Hydrogeology The continuous development of permafrost determines the specifics of the hydrogeological conditions of the Project territory. Several aquifers and water bearing complexes are defined in the area under study:

The aquifer in the post glacial and Upper Quaternary deposits within the active zone. The aquifer consists of boulders, detritus with sand and silt, and contains porous and porous-interbedded waters. The aquifer is widely spread in the upper segment of loose deposits within flood plains, flood plain terraces at various elevations and flat slopes of water divides. The upper permafrost boundary acts as a low aquitard. The aquifer thickness ranges from 0.5 m to 1.5 m and defined by the thickness of the active (thawing) zone which depends on the exposure of the slope and the lithological composition of the active zone. According to the Chaun laboratory (USSR), the estimated depth of seasonal thawing is 2.0 to 3.2 m. The aquifer occurs only during the summer period. The groundwater regime is unstable and depends on rainfall which is the main source of recharge to the aquifer. The aquifer discharges into the underlying aquifer in the post-glacial alluvial deposits within flood plain taliks or directly into rivers and creeks.

In 2011-2012 seven 3 m deep monitoring wells were drilled within the Dvoinoye River and Pravy Yarakvaam River floodplains within Project area as part of the hydrogeological monitoring system for the Project area. Wells were equipped for measuring water levels and sampling the groundwater.

The aquifer in the post-glacial alluvial deposits within flood plain taliks. The aquifer consists of gravel, pebbles, detritus with sand-clay fill, and contains porous-interbedded waters. This aquifer is located within the Dvoinoye River and Pravy Yarakvaam River flood plain taliks, which extend into the mouth areas of the tributaries to these rivers. The taliks are generally 100-200 meters in length, and no more than 20 meters in width. The aquifer thickness is defined by the thickness of the loose deposits and range from 2-3 to 100 m. In the Dvoinoye River channel, 36 m upstream of the mouth of Ametyst Creek, the thickness of the loose deposit is 5 m. A water supply well №2 drilled in December, 1994 near the confluence of the Dvoinoye River and Ametyst Creek, penetrated a deep talik. The upper segment, which consisted of alluvial deposits, was dry.

Aquifer recharge from the river commences in June during snowmelt. The aquifer is discharged either into the river or into the underlying complex in the Cretaceous deposits. Direct discharges into the river are not observed at the proposed mine or infrastructure sites. The nearest discharge (icing) on the Dvoinoye River is located at a distance of 8 km downstream from the site; the nearest icing on the Pravy Yarakvaam River is located at a distance of 6 km downstream from the site.

The water bearing complex in the Cretaceous deposits within flood plain taliks. The aquifer contains fissure and fissure-vein waters. Groundwater recharge occurs from the overlying alluvial aquifer within deep taliks and directly from the rivers. Groundwater from this complex could be used for water supply. Apparently, the 24 m deep well №2 mentioned above, was advanced in this complex and provided water supply for domestic and industrial needs.

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Flood plain taliks are apparently discontinuous. Thirteen 25 m deep exploration wells were drilled in the 1990s within the Dvoinoye River flood plain between the mouth of Rogach Creek and the mouth of Ametyst Creek. None of the wells encountered groundwater.

Currently groundwater exploration drilling is conducted within the Pravy Yarakvaam River flood plain downstream of the proposed accommodation camp.

According to the hydrogeological report five wells were drilled in 2011-2012 within Dvoinoye River and Pravy Yarakvaam River floodplains within Project area for locating taliks. Deep taliks, at depths of 9.5 m and 14 m, were found in 2 of the wells (the remaining wells were dry). Pumping tests were conducted in these wells and calculated hydraulic conductivities of the water bearing zone varies from 1X10-5 to 5X10-5 m/s. These 2 wells were included in the hydrogeological monitoring system of Project area.

The water bearing complex in the Cretaceous deposits below the permafrost base. The aquifer contains fissure and fissure-vein sub-permafrost waters of sporadic occurrence. This complex is located in the water divide areas and on valley slopes and lies on the depth of 180-400 m. Water of the complex has high-pressure head of 100- 150 m. No discharges of this groundwater were recorded at the site.

During exploration works at the Dvoinoye ore body located within permafrost, no exploration wells encountered ground waters from this complex.

Elevated groundwater flow within this complex could be expected along the deep faults which coincide with the river channels. 4.6.1.1 Groundwater Sensitivity The groundwater quality in the active (seasonally thawing) zone is very susceptible to negative impacts which could be caused by open pits, tailing storage facilities, the proposed landfill, fuel storage, etc. The shallow aquifers discharge into the nearest surface water bodies and the alluvial aquifer. Therefore, deterioration of the groundwater quality in the active thaw zone could affect surface water and alluvial groundwater quality.

The post-glacial alluvial aquifer and low Cretaceous complex within taliks are the main sources of drinking water supply at the site. Both could be affected by various above ground activities such as open pits, tailings storage facilities, and other infrastructure and facilities. Impacts could occur directly or indirectly. The indirect impact could occur due to the fact that both the aquifer and complex are recharged from the rivers and creeks. Therefore, deterioration of surface water quality could cause deterioration of groundwater quality in either the aquifer or the complex, both of which are hydraulically connected.

The projected mining works which will be conducted within permafrost and below the deep taliks are not expected to influence the regime, balance and quality of this aquifer and complex.

The lowest sub permafrost water-bearing complex in the low Cretaceous deposits is not expected to be impacted by any above ground or underground activities at the site. 4.6.1.2 Groundwater Quality The only sampled well is the industrial water supply well №2 located in the Dvoinoye River valley near the mouth of Ametyst Creek. Neither the well borehole log nor the exact date of sampling is known. Apparently this well was

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advanced into the alluvial and Cretaceous deposits within the deep talik zone. The results of the chemical analyses of a single sample are presented in Table 4.6-1. Table 4.6-1: Groundwater Quality in Well No. 2 Parameters Units Concentration pH 6.5 TSS mg/L <2 TDS mg/L 224 BOD total mg/L 1.5 Na mg/L 3.1 K mg/L 0.42 Ca mg/L 46.1 Mg mg/L 9.0 NH3 mg/L 0.09 Fe total mg/L <0.01 HCO3 mg/L 22.0 Cl mg/L <1 SO4 mg/L 118.3 NO3 mg/L 8.9 NO2 mg/L 0.05 P mg/L <0.05 Cu mg/L 0.001 Zn mg/L 0.006 Pb mg/L 0.00004 Mn mg/L 0.016 Sr mg/L 0.23 Ni mg/L <0.01 Co mg/L <0.01 Cr mg/L <0.02 Sb mg/L <0.001 As mg/L <0.05 Ag mg/L <0.00001 Se mg/L <0.0003 Cd mg/L <0.001 Hardness mg/eqv/L 3.04 Carbonates mg/L <1 Al mg/L <0.04

Groundwater is of sulphate calcium type. Concentrations for metals are low. Slightly elevated concentrations for nitrate (8.9 mg/L) and sulphate (118 mg/L) could be attributed to some mining or other activities. Groundwater quality satisfies requirements for drinking and industrial water supply.

On the basis of the nine groundwater monitoring wells installed in 2011-2012, the hydrogeological monitoring system was created. The types of wells are described in Table 4.6-2. Locations of wells are shown on the Figure 10.

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Table 4.6-2: Monitoring Well Installations Well Well Monitoring Wells Purpose screen depth, m interval, m

shallow aquifer in the WC1-1 Background groundwater active (thaw) zone 3.0 1.0-3.0 WC1 quality within the talik in the WC1 low Cretaceous complex 14.4 No screen Potential impacts to groundwater quality in the shallow WC2 aquifer in the active (thaw) zone from the West pit and 3.0 0.5-2.0 waste rock storage areas.

Potential impact of the existing tailings facility on WC3 groundwater quality in the low Cretaceous aquifer within 9.5 6.5-9.5 the talik.

Potential impacts to groundwater quality in the shallow WC4 aquifer in the active (thaw) zone from the West pit and 15.0 0.8-2.8 existing tailings facility.

Potential impacts to groundwater quality in the shallow WC5 aquifer in the active (thaw) zone from projected 3.0 0.5-2.0 infrastructure.

Potential impact of landfill site on groundwater quality in SW1 3.0 0.5-2.0 the shallow aquifer in the active (thaw) zone.

Potential impacts of the existing explosives store on SW3 groundwater quality in the shallow aquifer in the active 3.0 0.5-2.0 (thaw) zone.

Potential impacts of the projected explosives storage on SW4 groundwater quality in the shallow aquifer in the active 3.0 0.5-2.0 (thaw) zone.

Groundwater samples at the wells where water was available (some wells were dry) were collected in June 2012. The results are provided in Table 4.6-3. Table 4.6-3: Groundwater Monitoring Results - June 2012 WC1-1 WC2 WC4 WC1 WC3 Sampling well Thaw Thaw Thaw Talik Zone Talik Zone Zone Zone Zone Date Sampled 6/5/2012 6/27/2012 6/27/2012 6/27/2012 26/05/2012 6/27/2012 6/28/2012 6/28/2012

Turbidity 46.4 12.9 260 850 3,7 11.6 140 2

pH 6.78 6.79 6.57 5.96 6.85 7.20 6.79 6.64

Suspended solids mg/L 60 38.0 222.0 280.0 8 60.0 64.0 <3

Solid residual mg 168 151.0 67.0 346.0 520 492 460 160

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WC1-1 WC2 WC4 WC1 WC3 Sampling well Thaw Thaw Thaw Talik Zone Talik Zone Zone Zone Zone Date Sampled 6/5/2012 6/27/2012 6/27/2012 6/27/2012 26/05/2012 6/27/2012 6/28/2012 6/28/2012 Petroleum compounds mg/L <0,05 <0.05 <0.05 <0.05 <0,05 <0.05 <0.05 <0.05 Anionic surface-active material <0,01 <0.01 <0.01 <0.01 0.01 0.01 <0.01 mg/L Phenols mg/L <0,002 <0.002 <0.002 <0.002 <0.002 <0.002 <0.002 Cyanides mg/L <0.05 <0.05 <0.05 Thiocyanates mg/L <0.05 <0.05 <0.05

BOD mg/L 1.5 1.6 1.1 1.2 1 2.4 2.0 0.5

COD mg/L 3.4 4.9 7.1 8.5 8.0 3.6

Sodium mg/L 3.7 4.7 2.0 5.3 11.5 11.0 8.5 4.10

Potassium mg/L 0.9 1.17 0.23 0.03 1.64 1.50 1.25 0.80

Calcium mg/L 23.2 24.5 7.0 51.6 90.2 91.8 78.0 20.0

Magnesium mg/L 5.3 10.0 1.3 13.2 15.8 19.5 8.4 6.7

Ammonium ion mg/L 0.06 0.5 <0.05 <0.05 0.4 1.2 <0.05 <0.05

Iron, total, mg/L <0,01 <0.01 <0.01 <0.01 0.02 0.01 0.01 0.01

Chloride ion, mg/L 1.6 1.9 1.5 4.5 1 5.2 2.6 3.8

Sulphate ion mg/L 76.8 84.3 19.1 168.6 276 241.6 220.9 70.7

Nitrate ion mg/L 2.75 1.4 1.0 10.0 0.20 15.6 17.0 5.9

Nitrite ion mg/L <0,02 0.04 <0.02 <0.02 <0,02 1.2 0.38 <0.02

Phosphate ion mg/L <0,05 <0.05 <0.05 <0.05 <0,05 <0.05 <0.05 <0.05

Copper mg/L <0,02 0.003 0.001 0.002 <0,02 0.003 0.003 0.002

Zinc mg/L <0,004 0.01 <0.004 0.02 0.05 <0.004 0.04 0.01

Lead mg/L <0,006 <0.001 <0.001 <0.001 <0,006 <0.001 <0.001 <0.001

Manganese mg/L 0.015 0.02 0.01 0.32 0.59 0.9 0.61 <0.01

Strontium mg/L 0.2 0.17 0.09 0.31 0.49 0.5 0.45 0.13

Nickel mg/L <0,01 <0.01 <0.01 <0.01 <0,01 <0.01 <0.01 <0.01

Cobalt mg/L <0,01 <0.01 <0.01 0.01 <0,01 0.015 0.014 <0.01

Chromium mg/L <0,02 <0.02 <0.02 <0.02 <0,02 <0.02 <0.02 <0.02

Arsenic mg/L <0,005 <0.05 <0.05 <0.05 <0,05 <0.05 <0.05 <0.05

Cadmium mg/L <0,001 <0.001 <0.001 <0.001 <0,001 <0.001 <0.001 <0.001

Hardness, (mg-eqv/L) 1.59 2.05 0.46 3.66 5.80 6.18 4.59 1.55

Hardness as mg CaCO3/L 31.8 41.0 9.2 73.2 116 123.6 91.8 31.0

The groundwater quality results show that ground waters range in hardness from soft waters upstream of the site (WC1-1) to moderately hard waters (WC1) with both calcium and sulphate accounting for the increased hardness. The results show that locally groundwater quality can be highly variable and strongly influenced by local geological

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conditions. Both copper and zinc were detected at concentrations similar to surface water (discussed in Section 4.8), and reinforce the earlier observation that surface and shallow ground waters are closely connected.

Groundwater quality downgradient from the West Pit (WC2) was slightly higher in calcium and sulphate, and resulted in slightly harder waters. Copper and zinc concentrations were similar to the upstream locations and suggest that leaching of metals from waste rock from pervious mining operation that are stored near the West Pit have had a negligible influence on groundwater quality at this location. The higher nitrate and manganese concentrations suggest potential influence associated with previous mining activity.

Higher water hardness, mainly as a consequence of higher calcium and sulphate concentrations, was characteristic of ground waters downgradient of the former tailings facility (WC3). Copper and zinc concentrations in groundwater samples were similar to levels at WC1. Nitrates, manganese and strontium concentrations suggest some transport of blasting residues and metals into the local aquifer has occurred as a consequence of past mining activity.

The well at WC4 represents downstream aquifer quality removed from any direct influence of past mining activity. Concentrations of all parameters were similar to upstream areas (i.e., WC1). 4.7 Hydrology The Dvoinoye Project is located along the Dvoinoye River near the headwaters. The Project as proposed is also adjacent to the upper reaches of the Pravy Yarakvaam River. Both are large rivers with year-round flow in the lower reaches, but within the upper reaches in the Project area, are small, seasonally flowing streams.

The Project site surface drainage consists of the Dvoinoye River and its tributaries: Oda, Rogach, Ametyst, Zhila, and Pashkin Kluch Creeks (Figure 5). The mine, including the surface portal infrastructure, the ore and waste stockpiles and the landfill site are located within the drainage of the upper Dvoinoye River. The fuel storage, electrical generating facility and the office and accommodations complex are located in the upper reaches of the Pravy Yarakvaam River (Figure 5).

There are no long-term hydrological records at the streams in the Project area. Field hydrological survey and spot flow measurements were carried out in the summer of 2010 and 2011. The survey provided stream channel data, but was not sufficient to derive long-terms hydrological characteristics. The hydrological characteristics of the Project streams, therefore, were calculated using statistical analysis of the flow records from the regional gauged watershed operated by the State Hydrometeorological Agency. The hydrological investigations and analysis were carried out by VNII-1 with the support of state agencies and scientific institutes of Magadan. In total 13 gauged watersheds with the flow records of 10 years or more were used to derive regional statistical hydrological characteristics (VNII-1, 2012).

The flow characteristics were calculated for the following stream cross-sections (XS) (Figure 11):  XS1: Pravy Yarakvaam downstream of the Project Infrastructure;  XS2: Dvoinoye River Downstream of the Mine;  XS3: Dvoinoye River Downstream of the Project Infrastructure; and  XS4: Oda Creek at the Mouth, Downstream of the Waste Rock Dumps.

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The watershed characteristics of these streams are summarized in the Table below. Table 4.7-1: Watershed Characteristics of Project Streams

Average Watercourse Slope Average Distance from (%) Watershed Watershed Watershed the Watercourse Area (km2) Elevation Slope Headwaters * Average (masl) (%) (km) Average Weighted

XS1: Pravy Yarakvaam 22.5 1040 274 8.0 46.3 23.1 XS2: Dvoinoye River 19.9 1080 235 8.6 41.0 20.5 Downstream of the Mine XS3: Dvoinoye River Downstream Of The 7.33 1010 150 2.4 88.5 44.3 Project Infrastructure XS4: Oda Creek at the 3.92 1010 150 2.3 88.5 44.3 Mouth

*masl – meters above sea level, Baltic System

Typical reported stream channel characteristics in the Dvoinoye and Pravy Yarakvaam Rivers (VNII-1, 2012) are summarized below. Table 4.7-2: Typical Flow Cross-Section Characteristics of Project Streams XS2: Dvoinoye XS3: Dvoinoye River XS1: Pravy Flow Characteristic River Downstream Downstream Of The Yarakvaam of the Mine Project Infrastructure

Drainage Area, km2 22.5 19.9 7.33 Flow Width, m Average 5 5.2 3.4 Dry flow 2.4 1.5 2.6 Flood flow 28.6 23.9 9.1 Flow Depth, m Average 0.07 0.06 0.13 Dry flow 0.03 0.02 0.07 Flood flow 0.33 0.32 0.44 Flow Velocity, m/s Average 0.36 0.34 0.23 Dry flow 0.25 0.2 0.38 Flood flow 1.29 1.28 1.08

Notes: the data for Oda Creek are not available. 4.7.1 Average Annual Flow The average annual rate of runoff for various return periods (exceedance probabilities) was calculated using regional correlations between the flow and the watershed characteristics. The following regional statistical relationship was derived:

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2 Average Annual rate of Runoff (L/s/km ): М = 1.98ln(Ib) – 3.97, where Ib is the average watershed slope.

The following average annual flow estimates in the cross-sections of interest were derived: Table 4.7-3: Average Annual Flow in Project Streams Average Exceedance probability Note 1, % Watercourse Note 2 М H Q 1 5 10 25 75 90 95 99 L/s/km2 mm/yr m3/s m3/s m3/s m3/s m3/s m3/s m3/s m3/s m3/s XS1: Pravy 7.14 225 0.16 0.22 0.20 0.19 0.18 0.14 0.13 0.12 0.11 Yarakvaam XS2: Dvoinoye River Downstream 6.84 216 0.14 0.19 0.17 0.17 0.15 0.13 0.12 0.11 0.099 of the Mine XS3: Dvoinoye River Downstream 5.95 188 0.044 0.061 0.055 0.053 0.048 0.039 0.036 0.034 0.030 of the Project Infrastructure XS4: Oda Creek at 5.95 188 0.024 0.033 0.029 0.028 0.027 0.021 0.019 0.018 0.016 the Mouth Notes: 1. The Coefficient of Variation, Cv, and the Coefficient of Skewness, Cs, are necessary for the calculation of the flows of various recurrence intervals. The Coefficient of variation, Cv, of the annual rate of runoff was estimated as: Cv = 3.126•10-7H2 – 7.97•10-4H + 0.64, where H is the average watershed elevation. The typical Cv in the Project streams is 0.14-0.15. The Coefficient of Skewness, Cs, of the annual rate of runoff was found to be approximately 2Cv, i.e. 0.3. 2. The estimated average annual runoff the project stream watersheds in the range of 188-225 mm/year (approximately 200 on average) is comparable with the average annual precipitation at Ilirney (240 mm). Some evapotranspiration losses from the watershed occur in summer months, but in such a cold climate these losses are not significant. The evapotranspiration losses are estimated to be approximately 40 mm/year (240mm/year – 200 mm/year). The annual runoff coefficient is approximately 85% (200 mm / 240 mm).

4.7.2 Seasonal Flow Distribution The main sources of stream flow are snowmelt, rainfall, and groundwater discharge from the active thaw zone (VNII-1, 2011). The surface flow starts in early June and ceases in early September. Most of the runoff (94%- 99% in large rivers and 100% in small creeks) takes place in May through September. The key features of the hydrological regime are:  High spring flood due to snow melt, which starts in late May - early June and lasts for 20-30 days. Approximately 66% of the annual surface runoff takes place during the flood season. The wettest season is June (40%-60% of the annual flow).  Typically 3-4 rainfall flood events take place in July and August. Intermittent creeks dry out during extended periods without rain and in dry years.  The ice cover typically forms in early October and remains for 240-260 days.

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The seasonal flow distribution in the project stream was calculated using regional flow records. The following seasonal flow values were derived (Table 4.7-4). The data show that over half of the seasonal flow occurs during June, as a result of snow melt and rainfall while during the winter months there is no flow in the area streams.

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Table 4.7-4: Seasonal Flow Distribution in Project Streams Flow Rate

Month Percentage XS3: Dvoinoye River XS2: Dvoinoye River XS4: Oda Creek at the of Annual XS1: Pravy Yarakvaam Downstream of the Project Downstream of the Mine Mouth Flow: Infrastructure

106m3/mth m3/s 106m3/mth m3/s 106m3/mth m3/s 106m3/mth m3/s May 17% 0.835 0.317 0.730 0.277 0.230 0.087 0.123 0.047 June 55% 2.781 1.055 2.433 0.923 0.765 0.290 0.409 0.155 July 5% 0.270 0.102 0.236 0.090 0.074 0.028 0.040 0.015 August 17% 0.834 0.316 0.730 0.277 0.230 0.087 0.123 0.047 September 6% 0.326 0.124 0.285 0.108 0.090 0.034 0.048 0.018 October 0% 0 0 0 0 0 0 0 0 November 0% 0 0 0 0 0 0 0 0 December 0% 0 0 0 0 0 0 0 0 January 0% 0 0 0 0 0 0 0 0 February 0% 0 0 0 0 0 0 0 0 March 0% 0 0 0 0 0 0 0 0 April 0% 0 0 0 0 0 0 0 0 Total 100% 5.046 0.160 4.415 0.140 1.388 0.044 0.742 0.024

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4.7.3 Low Flow During the cold season the local streams are frozen. Therefore, the low flow conditions were characterized for the portion of the year when there is flow in the rivers (spring-summer season, approximately from May through September).

In Russia, a commonly used characteristic of the low flow conditions is 30Q20 (average flow during 30 consecutive days with return period of 20 years, i.e. exceedance probability of 95%).

For small streams, the best regional correlation was found between the 30Q20 flows and the watershed area:

-3 0,333 Q95%=7,35·10 A (VNII-1, 2012)

The following low flow estimates were derived (Table 4.7-5) (VNII-1, 2012): Table 4.7-5: Minimum 30-Day Flow with Return Period of 20 Years During the Spring-Summer Season Minimum 30-day Flow with Return Period of 20 years (Exceedance Probability 95%) Watercourse Discharge, m3/s Rate of Runoff, L/s/km2

XS1: Pravy Yarakvaam 0.021 0.92 XS2: Dvoinoye River Downstream of 0.020 1.00 the Mine XS3: Dvoinoye River Downstream Of 0.014 1.95 The Project Infrastructure XS4: Oda Creek at the Mouth 0.011 2.89

4.7.4 Peak Flow The flood flow estimates were derived for spring flood and for summer rain storm events (VNII-1, 2012).

The flood flows were calculated for two recurrence intervals: 1 in 100 years (exceedance probability 1%) and 1 in 33 years (exceedance probability 3%).

For the spring flood analysis, watershed characteristics and flow records of the regional gauged watercourses were used to correlate the peak flows with the average annual flow and the watershed area. The following regional formulae were derived (VNII-1, 2012):

For the layer of spring flood:

0,67 0,62 H1%=57.4M and H3%=55.0M ,

Where: H1% - spring flood layer, in mm, with exceedance probability of 1% (return period 1 in 100 years)

H3% - spring flood layer, in mm, with exceedance probability of 3% (return period 1 in 33 years) M – average annual rate of runoff, in L/s/km2 (see Section 4.7.1).

The regional formulae for the peak spring discharges are as follows:

0.14 Q1% = (0.00406H1%1.00A)/(A + 1)

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0.14 Q3% = (0.00406H3%0.97A)/(A + 1)

Where H1% and H3% are defined above and A is the watershed area.

The rain storm flows were calculated using the standard Russian methodology and software (VNII-1, 2012). The estimated peak flood and rainstorm flows are summarized in Table 4.7-6. Table 4.7-6: Peak Flows in the Project Streams Exceedance Probability, %

1% (1 in 100 years) 3% (1 in 33 years) Watercourse Rain Spring Rain Spring Floods Floods Floods Floods

m3/s m3/s m3/s m3/s XS1: Pravy Yarakvaam 7.49 12.6 6.14 10.6 XS2: Dvoinoye River Downstream of 5.51 11.0 4.52 9.28 the Mine XS3: Dvoinoye River Downstream Of 4.18 4.19 3.43 3.57 The Project Infrastructure XS4: Oda Creek at the Mouth 2.13 2.42 1.74 2.05

4.8 Water Quality

Water quality is intimately related to the sustainability of aquatic life. In arctic environments, nutrient availability is often reduced, while local geologic conditions as well as human activities may enhance availability of certain metals. The low nutrient quality can also affect water quality through lack of complexing ligands that would serve to reduce the bioavailability of many metals in surface waters. Consequently, water quality in arctic streams can be significantly affected by local disturbances that translate into potential effects on aquatic biological communities. 4.8.1 Dvoinoye Mine Site Background water quality has been assessed at a number of sites upstream of the existing facilities on the Dvoinoye River, as well as downstream on the Dvoinoye and Yarakvaam Rivers. A summary of existing water quality with respect to the major parameters of concern is provided in Table 4.8-1. Sampling locations are shown on Figure 12.

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Table 4.8-1: Water Quality in Project Areas Rivers

Dv 2k Pashkin Kluch Dv 2 Dvoinoye River, 1000 m downstream of Dv 3 Dvoinoye River, 1500 m downstream of West Dv 4 Dvoinoye River, 1750 m downstream of West Pit Dv 1 Dvoinoye River WP West Pit Environmental Creek, at mouth West Pit Pit (downstream of Ametyst Ck.) (downstream of former tailings facility) Parameter Units design limit value

2-Jul-10 30-Jun-11 9-Aug-11 20-Sep-11 2-Jul-10 30-Jun-11 30-Jun-11 9-Aug-11 20-Sep-11 2-Jul-10 30-Jun-11 9-Aug-11 20-Sep-11 2-Jul-10 30-Jun-11 9-Aug-11 20-Sep-11 2-Jul-10 30-Jun-11 9-Aug-11 20-Sep-11

рН 6.5-8.5 6.43 6.27 6.37 6.18 6.98 6.45 6.44 6.64 6.62 6.63 6.34 6.59 6.48 6.41 6.32 6.48 6.36 6.98 6.54 6.58 6.78

TSS mg/L 10 4.0 <2 <2 <0,5 6.0 <2 12 <2 <0.5 2.0 <2 <2 <0,5 8.0 <2 <2 <0,5 64.0 2 <2 <0,5

TDS mg/L 1000 20.0 23 100 253.0 163.0 210 117 246 289.0 114.0 131 247 307.0 115.0 92 225 241.0 136.0 113 235 293.0

TPH mg/L 0.05 <0,05 <0.05 <0,05 <0,05 0.06 <0,05 <0,05 <0.05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05

CN mg/L 0.035 - - <0,05 <0,05 ------<0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05

CNS mg/L 0.1 - - <0,05 <0,05 ------<0,05 <0,05 <0,05 <0,05 <0,05 <0,05 0.94 <0,05 <0,05 <0,05

BOD, full mg/L 2 1.8 1.3 1.2 1.2 1.4 1.4 1.3 1.2 1.4 1.5 1.0 0.8 1.3 2.0 1.6 1.4 1.7 1.3 1.2 1.8 1.4

Na mg/L 120 0.3 0.25 0.91 1.9 0.83 1.34 0.77 1.10 2.2 0.92 1.04 1.20 3.0 1.1 0.95 1.40 2.7 3.4 1.1 2.4 4.7

K mg/L 50 0.09 0.26 0.16 0.55 0.57 2.40 2.30 0.67 0.70 0.38 2.30 0.53 0.51 0.40 0.84 0.60 0.48 1.35 0.6 0.61 0.85

Ca mg/L 180 2.9 2.8 17.23 35.7 23.0 22.2 14.6 32.06 43.7 17.4 16.7 35.27 49.2 18.5 16.8 34.4 44.6 20.5 16.3 36.1 46.8

Mg mg/L 40 0.5 0.6 3.65 7.4 10.3 10.7 5.25 13.37 12.5 7.3 7.05 9.72 10.5 6.8 3.75 10.94 4.6 7.7 5.8 9.72 13.1

+ NH4 mg/L 0.5 <0,05 <0,05 <0,05 <0,05 0.18 <0,05 <0.05 <0.05 <0.05 0.18 <0,05 <0,05 <0,05 0.29 <0,05 <0,05 <0,05 0.22 <0,05 <0,05 <0,05

Fe, tot mg/L 0.1 0.04 <0,01 <0,01 <0,01 0.07 <0,01 <0,01 <0,01 <0,01 0.13 <0,01 <0,01 <0,01 0.06 <0,01 <0,01 <0,01 0.18 <0,01 <0,01 <0,01

- HCO3 mg/L - 5.0 4 12.0 5.0 24.0 11 11 15.0 11.0 8.0 8 11.0 11.0 6.0 8 11.0 8.0 16.0 9 16.0 16.0

Cl- mg/L 300 <1 <1 <1 2.0 <1 1.6 <1 2.6 3.8 <1 2.6 2.6 2.6 <1 <1 2.4 2.6 1.2 2.0 2.6 5.0

2- SO4 mg/L 100 5.4 6 37.9 105 83.7 96.3 54 97.0 143 63.8 64.2 97.0 149 64.3 50.2 97.0 118.5 67.5 53.5 94.8 147.3

2- NO3 mg/L 40 0.55 0.45 2.2 4.6 3.25 2.2 1.05 3.8 4.6 3.75 2.3 7.6 8.0 2.85 1.5 5.2 5.6 3.3 2.08 6.20 7.4

- NO2 mg/L 0.08 0.025 <0.02 <0,02 <0,02 0.052 <0,02 0.02 <0,02 <0,02 0.045 <0,02 <0,02 <0,02 0.022 <0,02 <0,02 <0,02 0.08 0.13 <0,02 <0,02

3- PO4 mg/L 0.2 <0,05 <0.05 <0,05 <0,05 <0,05 <0,05 <0.05 <0.05 <0.05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05

Cu mg/L 0.001 0.001 <0.001 0.002 <0,001 0.002 0.002 0.001 0.002 <0,001 0.002 <0,001 0.001 <0,001 0.004 0.001 0.001 <0,001 0.046 0.001 0.002 <0,001

Zn mg/L 0.01 0.007 <0.004 0.008 0.004 0.04 <0,004 <0,004 <0,004 <0,004 0.02 0.01 <0,004 0.004 0.035 <0,004 0.004 0.010 0.013 <0,004 <0,004 <0,004

Pb mg/L 0.006 0.0010 - - - 0.0031 - - - 0.003 0.0030 - - - 0.0065 - - - 0.0009 - - -

Mn mg/L 0.01 <0,01 <0.01 <0,01 <0,01 0.28 0.1 0.01 0.05 0.02 0.03 0.07 0.06 0.01 0.07 0.04 0.02 0.10 0.08 0.02 0.02 0.04

Al mg/L 0.04 <0,04 - - - <0,04 - - - - <0,04 - - - <0,04 - - - 0.05 - - -

Sr mg/L 0.4 <0,05 - - - 0.13 - - - 0.14 0.09 - - - 0.09 - - - 0.09 - - -

Ni mg/L 0.01 <0,01 - - - <0,01 - - - <0,01 <0,01 - - - <0,01 - - - <0,01 - - -

Co mg/L 0.01 <0,01 - - - <0,01 - - - <0,01 <0,01 - - - <0,01 - - - <0,01 - - -

Cr mg/L 0.05 <0,02 - - - <0,02 - - - <0,02 <0,02 - - - <0,02 - - - <0,02 - - -

Sb mg/L 0.005 <0,001 - - - <0,001 - - - <0,001 <0,001 - - - <0,001 - - - <0,001 - - -

As mg/L 0.01 <0,05 - - - <0,05 - - - <0,05 <0,05 - - - <0,05 - - - <0,05 - - -

Hg mg/L 0.00001 0.00005 - - - 0.00004 - - - <0,0001 <0,0000 - - - <0,00001 - - - 0.00006 - - - 1 Se mg/L 0.002 <0,0003 - - - <0,0003 - - - <0,002 <0,0003 - - - <0,0003 - - - 0.001 - - -

Cd mg/L 0.001 <0,001 - - - <0,001 - - - <0,005 <0,001 - - - <0,001 - - - <0,001 - - -

mg- 7.0-10.0 0.186 0.189 1.16 2.39 1.994 1.987 1.16 2.7 3.208 1.468 1.413 2.6 3.318 1.482 1.147 2.6 2.604 1.656 1.29 2.6 3.412 equiv/L Hardness

CaCO3 9.3 9.4 58 119.5 99.7 99.4 58 135 160 73.4 70.6 130 165.9 74.1 57.4 130 130 82.8 64.5 130 190.6

2- CO3 mg/L - <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1

< Value = concentration is below the detection limit which is given as the value; - = not analyzed; exceedances of the environmental design criteria (EDC) are shown in highlighted text

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Ro2 Dv 5 Dvoinoye River, 2300 m downstream of Dv 6 Dvoinoye River, 200 m downstream of Dv 7 Dvoinoye river, 500m downstream of Environmental Od1 Oda Creek Od 2 Oda creek, control Rogach Am1 Ametyst Creek, upstream of former mine site West Pit former fuel storage former Explosives Storage Parameter Units design limit Creek value 2-Jul-10 30-Jun-11 9-Aug-11 20-Sep-11 2-Jul-10 30-Jun-11 9-Aug-11 20-Sep-11 2-Jul-10 30-Jun-11 9-Aug-11 20-Sep-11 30-Jun-11 9-Aug-11 2-Jul-10 30-Jun-11 9-Aug-11 30-Jun-11 2-Jul-10 30-Jun-11 9-Aug-11 20-Sep-11

рН 6.5-8.5 6.70 6.53 6.55 6.72 6.97 6.55 6.60 6.63 6.78 6.50 6.46 6.54 6.35 6.58 6.42 6.17 6.10 6.22 5.67 5.31 6.51 5.00

TSS mg/L 10 <2 8 <2 <0,5 54.0 4 <2 <0,5 2.0 <2 <2 <0,5 <2 <2 3.0 <2 <2 <2 <2 <2 <2 <0,5

TDS mg/L 1000 138.0 132 251 295.0 138.0 117 247 282.0 99.0 113 249 281.0 18 90 19.0 28 90 27 15.0 27 117 123.0

TPH mg/L 0.05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 - <0,05 <0,05 <0,05

CN mg/L 0.035 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 ------

CNS mg/L 0.1 <0,05 <0,05 <0,05 <0,05 0.07 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 ------

BOD, full mg/L 2 1.8 1.0 1.2 1.8 2.0 1.6 1.2 2.1 1.9 1.0 1.4 1.3 1.2 1.4 1.7 1.2 1.2 1.2 1.6 1.6 1.3 1.7

Na mg/L 120 2.5 2.0 2.6 5.1 2.7 1.9 2.5 4.6 1.4 1.2 2.3 4.4 0.21 0.56 0.23 0.28 0.91 0.20 0.12 0.30 0.50 0.7

K mg/L 50 0.75 1.1 0.61 0.80 0.73 0.97 0.56 0.75 0.47 1.0 0.55 0.76 0.10 0.12 0.13 0.15 0.26 0.16 0.05 0.13 0.10 0.21

Ca mg/L 180 21.5 17.9 40.1 44.8 26.0 17.2 36.1 47.9 17.4 16.0 34.06 41.4 3.26 1.7 2.6 2.9 16.83 5.3 2.0 2.6 0.72 19.20

Mg mg/L 40 6.3 6.0 7.29 13.0 6.9 4.2 13.4 7.9 5.3 4.2 14.58 13.2 0.44 0.63 0.9 0.92 2.19 1.16 0.4 0.64 5.39 5.2

+ NH4 mg/L 0.5 <0,05 <0,05 <0,05 <0,05 0.09 <0,05 <0,05 <0,05 0.20 <0,05 <0,05 <0,05 <0,05 <0,05 0.18 <0,05 <0,05 <0,05 0.13 <0,05 <0,05 <0,05

Fe, tot mg/L 0.1 0.08 <0,01 <0,01 <0,01 0.07 <0,01 <0,01 <0,01 <0,01 <0,01 <0,01 <0,01 <0,01 <0,01 0.04 <0,01 <0,01 <0,01 0.09 <0,01 <0,01 <0,01

- HCO3 mg/L - 11.0 9 11.0 15.0 16.0 8 18.0 13.0 11.0 8 21.0 13.0 4 9.0 5.0 5 5.0 4 3.0 2 9.0 <10

Cl- mg/L 300 <1 <1 2.3 3.1 <1 <1 2.1 2.0 <1 <1 1.9 2.4 <1 <1 <1 <1 1.2 <1 <1 <1 <1 <1

2- SO4 mg/L 100 70.7 63.8 105.8 146.4 75.7 54.7 108.0 141.2 55.3 53.7 109.0 141.5 7.2 1.5 7.0 7.3 40.2 14.2 4.4 6.8 12.3 65.2

2- NO3 mg/L 40 5.7 3.2 5.6 6.6 4.95 2.4 5.6 6.2 3.2 1.95 6.20 5.6 0.4 2.6 0.08 1 5.6 0.4 0.75 0.75 2.6 1.6

- NO2 mg/L 0.08 0.1 <0,02 <0,02 <0,02 0.085 <0,02 <0,02 <0,02 0.05 <0,02 <0,02 <0,02 <0,02 <0,02 0.035 <0,02 <0,02 <0,02 0.02 <0,02 <0,02 <0,02

3- PO4 mg/L 0.2 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05

Cu mg/L 0.001 0.004 0.002 0.001 <0,001 0.007 0.002 0.002 <0,001 <0,001 0.003 0.002 <0,001 0.001 0.002 0.003 <0,001 <0,001 <0,001 0.005 0.002 0.002 <0,001

Zn mg/L 0.01 0.018 <0,004 <0,004 <0,004 0.006 <0,004 <0,004 0.004 0.01 <0,004 <0,004 0.004 <0,004 <0,004 0.014 <0,004 <0,004 <0,004 0.01 0.004 0.012 0.011

Pb mg/L 0.006 0.0029 - - - 0.0009 - - - 0.0014 - - - - - 0.0012 - - - 0.0011 - - -

Mn mg/L 0.01 0.08 0.01 0.02 0.03 0.07 0.05 0.04 0.02 0.01 0.02 0.04 0.01 <0,01 <0,01 0.016 <0,01 0.01 <0,01 0.017 0.01 0.08 0.11

Al mg/L 0.04 <0,04 - - - <0,04 - - - <0,04 - - - - - 0.046 - - - <0,04 - - -

Sr mg/L 0.4 0.09 - - - 0.09 - - - 0.09 - - - - - <0,05 - - - <0,05 - - -

Ni mg/L 0.01 <0,01 - - - <0,01 - - - <0,01 - - - - - <0,01 - - - 0.01 - - -

Co mg/L 0.01 <0,01 - - - <0,01 - - - <0,01 - - - - - <0,01 - - - <0,01 - - -

Cr mg/L 0.05 <0,02 - - - <0,02 - - - <0,02 - - - - - <0,02 - - - <0,02 - - -

Sb mg/L 0.005 <0,001 - - - <0,001 - - - <0,001 - - - - - <0,001 - - - <0,001 - - -

As mg/L 0.01 <0,05 - - - <0,05 - - - <0,05 - - - - - <0,05 - - - <0,05 - - -

Hg mg/L 0.00001 0.00004 - - - <0,00001 - - - 0.00002 - - - - - <0,00001 - - - 0.00003 - - -

Se mg/L 0.002 <0,0003 - - - <0,0003 - - - <0,0003 - - - - - <0,0003 - - - <0,0003 - - -

Cd mg/L 0.001 <0,001 - - - <0,001 - - - <0,001 - - - - - <0,001 - - - <0,001 - - -

mg- 7.0-10.0 1.591 1.386 2.6 3.37 1.865 1.204 2.9 3.04 1.304 1.144 2.9 3.151 0.199 0.137 0.204 0.22 1.02 0.36 0.133 0.182 0.48 1.386 equiv/L Hardness

CaCO3/L 79.6 69.3 130 168.5 93.3 60.2 145 152 65.2 57.2 145 157.6 9.95 6.85 9.96 11.0 51 18 6.65 9.1 24 69.3

2- CO3 mg/L - <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1

< Value = concentration is below the detection limit which is given as the value; - = not analyzed; exceedances of the environmental design criteria (EDC) are shown in highlighted text

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Zh2 Zhila Creek, Zh1 Zhila Creek, downstream of Ir 2 Irkut Яр1 Pravy Yarakvaam Environmental Am2 Ametyst Creek, at former mine site downstream of former Яр2 Pravy Yarakvaam River, ~1 km downstream of Project site East Pit creek River Parameter Units design limit tailings facility value 2-Jul-10 30-Jun-11 9-Aug-11 20-Sep-11 2-Jul-10 30-Jun-11 9-Aug-11 2-Jul-10 30-Jun-11 2-Jul-10 2-Jul-10 30-Jun-11 2-Jul-10 22-Feb-11 21-Mar-11 13-Apr-11 17-May-11 9-Jun-11 9-Aug-11 23-Nov-11 21-Dec-11

рН 6.5-8.5 5.88 5.77 5.75 6.05 7.10 7.37 6.64 6.98 6.81 4.74 6.27 5.95 6.27 6.3 6.06 5.8 6.29 6.27 6.1 6.01 6.36

TSS mg/L 10 9.0 <2 <2 <0.5 10.0 22 10 52.0 136 3.0 8.0 <2 <2 <2 <2 <2 <2 <2 <2 <3 <3

TDS mg/L 1000 28.0 30 115 221.0 46.6 332 932 413.0 324 70.0 27.0 19 20.0 29 24 14 12 20 20 30 20

TPH mg/L 0.05 <0,05 <0.05 <0.05 <0,05 - <0,05 <0,05 <0,05 <0,05 - - <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05 <0,05

CN mg/L 0.035 - <0.05 <0.05 <0,05 - - - 0.05 - <0,05 ------

CNS mg/L 0.1 - <0.05 <0.05 <0,05 - - - 0.92 - <0,05 ------

BOD, full mg/L 2 1.9 1.4 1.4 1.8 1.8 1.3 1.2 1.9 1.4 1.5 1.3 1.2 1.5 1.4 1.4 2 1.2 3 1.6 1.4 0.9

Na mg/L 120 0.560 0.36 0.90 2.3 3.8 2.46 4.0 19.1 6.38 0.47 1.0 0.44 0.6 1.7 0.8 1.3 1 0.87 1.1 1.4 -

K mg/L 50 0.14 0.10 0.33 0.60 1.18 1.1 1.2 1.05 1.2 0.17 0.13 0.2 0.10 0.11 0.03 0.16 0.18 0.1 0.11 0.27 -

Ca mg/L 180 4.5 2.7 17.64 39.4 80.2 57.0 204.4 71.1 53.8 7.6 2.07 2.4 2.2 3.05 1.9 1.75 2 2.6 1.5 2.7 -

Mg mg/L 40 1.0 1.13 3.88 6.7 18.2 12.3 10.33 8.5 10.8 2.3 0.16 0.4 0.20 0.7 0.6 0.5 0.6 0.6 0.49 0.5 -

+ NH4 mg/L 0.5 <0,05 <0.05 <0.05 <0.05 0.32 <0.05 <0.05 0.32 <0.05 0.23 0.21 <0.05 0.13 0.13 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05

Fe, tot mg/L 0.1 0.15 <0.01 <0.01 <0,01 0.05 <0,01 <0,01 0.09 <0,01 0.16 0.06 <0,01 <0,01 <0,01 <0,01 <0,01 0.06 0.01 <0,01 0.02 <0,01

- HCO3 mg/L - 5.0 3 3.0 8.0 24.0 40 11.0 24.0 16 <10 <10 4 3.0 <10 <10 - - 6.4 6 5 -

Cl- mg/L 300 <1 <1 <1 2.9 2.1 <1 1.2 2.2 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1

2- SO4 mg/L 100 10.3 8.4 54.3 114.0 224.0 152.2 447.6 212.2 170.8 28.0 5.3 5 5.0 8.2 6.2 <10 6.2 6.1 2.3 5.8 2.9

2- NO3 mg/L 40 2.6 1 2.8 5.4 21.2 8.2 14.2 23.2 13 0.4 <0,1 0.58 1.35 1.2 1.2 1.75 1.6 1.42 1.6 1.35 0.85

- NO2 mg/L 0.08 0.035 <0.02 <0.02 <0,02 0.18 <0,02 <0,02 0.5 <0,02 <0,02 0.02 <0,02 <0,02 <0,02 <0,02 <0,02 <0,02 <0,02 <0,02 <0,02 <0,02

3- PO4 mg/L 0.2 <0,05 <0.05 <0.05 <0.05 <0,05 <0.05 <0.05 <0,05 <0.05 <0,05 <0,05 <0.05 <0,05 0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05

Cu mg/L 0.001 0.01 0.002 0.001 <0,001 0.003 0.001 0.002 0.005 0.002 0.005 0.002 0.003 <0,001 <0,02 <0,02 <0,02 0.001 <0,001 0.001 <0,02 0.001

Zn mg/L 0.01 0.036 0.005 0.011 0.006 0.009 <0,004 0.004 0.01 <0,004 0.017 0.004 0.004 <0,004 0.004 <0,004 0.01 <0,004 <0,004 0.006 0.02 0.01

Pb mg/L 0.006 0.0032 - - - 0.0010 - - 0.0008 - 0.0013 <0,001 - 0.00005 <0,01 <0,01 <0,01 <0,006 <0,006 0 0

Mn mg/L 0.01 0.03 0.01 0.03 0.01 0.1 <0,01 0.3 0.22 <0,01 0.24 <0,01 <0,01 <0,01 <0,01 <0,01 <0,01 0.01 <0,01 <0,01 0.03 <0,01

Al mg/L 0.04 <0,04 - - - <0,04 - - <0,04 - 0.35 - - <0,04 <0,04 <0,2 <0,04 <0,04 <0,04 - - -

Sr mg/L 0.4 <0,05 - - - 0.17 - - 0.17 - <0,05 <0,05 - <0,05 <0,05 <0,05 <0,05 <0,05 0.05 0 0

Ni mg/L 0.01 <0,01 - - - <0,01 - - 0.01 - <0,01 <0,01 - <0,01 <0,01 <0,01 <0,01 <0,01 <0,01 0 0 -

Co mg/L 0.01 <0,01 - - - <0,01 - - <0,01 - <0,01 <0,01 - <0,01 <0,01 <0,01 <0,01 <0,01 <0,01 0 0 -

Cr mg/L 0.05 <0,02 - - - <0,02 - - <0,02 - <0,02 <0,02 - <0,02 <0,02 <0,02 <0,02 <0,02 <0,02 0 0 -

Sb mg/L 0.005 <0,001 - - - <0,001 - - <0,001 - <0,001 <0,01 - <0,001 <0,005 <0,005 <0,005 <0,005 <0,005 0 0 -

As mg/L 0.01 <0,05 - - - <0,05 - - <0,05 - <0,05 <0,05 - <0,05 <0,005 <0,005 <0,005 <0,005 <0,005 0 0 -

Hg mg/L 0.00001 0.00001 - - - <0,00001 - - 0.00005 - <0,00001 - - <0,00001 <0,00001 <0,00001 <0,00001 <0,002 <0,002 0 0 -

Se mg/L 0.002 <0,0003 - - - 0.002 - - 0.004 - <0,0003 <0,02 - <0,0003 <0,02 <0,02 <0,02 <0,02 <0,02 0 0 -

Cd mg/L 0.001 <0,001 - - - <0,001 - - <0,001 - <0,001 <0,001 - <0,001 <0,001 <0,001 <0,001 <0,001 <0,001 0 0 - mg- 7.0-10.0 0.307 0.228 1.2 2.517 5.498 3.855 11.08 4.247 3.572 0.568 0.116 0.153 0.126 0.21 0.144 0.128 - 0.179 0.115 0.176 0.13 equiv/L Hardness

CaCO3/L 15.7 11.4 60 125.8 274.9 192.8 553 212.4 178.6 28.4 5.8 7.7 6.3 10.5 7.2 6.4 8.95 7.75 8.8 6.5

2- CO3 mg/L - <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 - 0 <1 0 -

< Value = concentration is below the detection limit which is given as the value; - = not analyzed; exceedances of the environmental design criteria (EDC) are shown in highlighted text.

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The results indicate that pH in most waters is below neutral (pH 7), and ranges between 5.67 and 6.43 in the Dvoinoye River and its tributaries, with the exception of Irkut Creek, where pH was recorded at 4.74. Sampling at the upstream location, Dv-1, across a number of seasons shows that concentrations of major ions (e.g., calcium, magnesium) were lowest during peak runoff in the spring (i.e., June), and highest during late summer-fall low flow periods. Similarly, hardness in the upper reaches of the Dvoinoye River (Dv 1) and tributaries such as Oda Creek (Od 2) and Ametyst Creek (Am 1) was lowest in the spring samples, where flows would be dominated by snowmelt. Hardness increased in late summer and fall samples (August and September) during low flow periods when ground waters from the active thaw zone provided for a larger percentage of total stream flow.

Similar increases were noted for nitrates and sulphates in the low flow period. The same pattern of increases in these parameters was noted at all sampling locations in the Dvoinoye River and its tributaries, and the Pravy Yarakvaam, suggesting that natural geological sources and local permafrost thawing contribute to increases in some ions during low flow periods, while snow melt generally dilutes the geological contribution. Metals concentrations showed less seasonal variability.

The results also show that water quality with respect to concentrations of major ions and metals is relatively consistent across all the streams assessed, with the exception of Zhila Creek, the tributary from the former East Pit (shown as Zh 1 in Table 4.8-1). Concentrations of calcium, sodium, magnesium, nitrates and nitrites, and sulphate were all elevated in Zhila Creek. In particular, concentrations of sulphate and nitrates were substantially higher than in any other sampling location.

Similarly elevated levels were not found in the upper reaches of an adjacent tributary, Ametyst Creek, (Am 1 in Table 4.8-1) that did not drain from former mine workings, indicating that runoff from the East Pit may be contributing to the higher concentrations of these elements and compounds in this tributary (e.g., higher nitrates may be due to blasting residues). Higher concentrations of iron, and a slight increase in copper and zinc concentrations were observed in the lower reaches of Ametyst Creek in the area of the existing mine. While concentrations of manganese and strontium were also elevated in this stream, concentrations of the other metals were similar to the other locations sampled.

Water quality at the mouth of Pashkin Kluch Creek (Dv 2k) was similar in the composition of major ions and metals to the upstream reaches of Dvoinoye River. Water quality in the West Pit (WP, Table 4.8-1) was also similar to water quality in the upper reaches of the Dvoinoye River (a minor increase in manganese concentrations was noted in the August 2011 sample). The results of the sampling program indicate that the West Pit is currently not affecting water quality in the Dvoinoye River.

Water quality downstream of the West Pit is potentially affected by the existing waste rock pile that remains on site from the former mining operations (the waste rock pile is visible on Photo 2 to the right of the West Pit). Water quality at Dv 2, located downstream of the West Pit and the existing waste rock showed a slight increase in manganese concentrations during June and August 2011 and the results are consistent with groundwater quality data (Section 4.7) that indicated higher manganese concentrations in groundwater. There was no substantial increase in any of the other parameters, indicating that currently the existing waste rock has had minimal effect on water quality in the Dvoinoye River.

Water quality in the Dvoinoye River below the existing tailings facility showed higher concentrations of copper, zinc, suspended solids, as well as iron, and manganese,. Concentrations of copper, zinc, and suspended solids (TSS) decreased substantially further downstream at Dv 5 and Dv 6. Sulphate concentrations increased upstream

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below the West Pit, and remained elevated as far downstream as Dv 7. Copper concentrations were highest in the 2010 sample below the former tailings facility, but decreased to a level similar to upstream locations in 2011 samples, indicating that the closure of the existing tailings facility had resulted in improved water quality. Similar reductions in copper concentrations were noted at sampling locations further downstream of the former tailings facility.

By comparison, concentrations of most elements were low in the Pravy Yarakvaam River at both sampling locations, as well as in Lake Goluboye.

The data indicate that surface waters in the streams in the Project area are generally low in metals and that only copper and zinc showed a significant increase below the former tailings facility. The data indicate that the former tailings facility contributed higher concentrations of some metals, including copper and zinc to the Dvoinoye River, but that these have decreased to background levels following closure of the tailings facility in 2011. Some of the smaller tributaries such as Oda Creek and Zhila Creek that drain from the existing open pits also appear to contribute to the metals loadings to the Dvoinoye River in the 2010 sample, though the increases above the environmental design criteria are minor. Concentrations were lower in the 2011 samples and were only slightly above the environmental design criteria. The inflow of Zhila Creek to the Dvoinoye River appears to have only a minor influence on water quality in the Dvoinoye River downstream of the confluence, since sulphate concentrations were only slightly higher than at locations in the Dvoinoye River upstream of Zhila Creek during the low flow period in September 2011. While sulphate concentrations in Zhila Creek exceeded the EDLs and Russian MPCs, sulphate concentrations that could affect aquatic life range from 512 mg/L for the amphipod

Hyalella azteca (based on an LC50) to 2,078 mg/L for the water flea Ceriodaphnia dubia (LC50) to 14,134 mg/L for the midge Chironomus tentans (LC50) (Soucek and Kennedy 2005). These results indicate that sulphate levels in Zhila Creek are unlikely to affect aquatic life. Concentrations were much lower in the Dvoinoye River.

Water quality in the West Pit showed elevated sulphate concentrations during low flow periods (up to 143 mg/L), and indicate that draining of the pit should be undertaken during or shortly after the spring snow melt when pit water concentrations are similar to upstream concentrations in the Dvoinoye River to avoid releasing water to the river that exceeds the MPC.

Sediment quality was also assessed in local watercourses, and the results of this assessment are presented in Table 4.8-2. Sampling locations are shown on Figure 12.

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Table 4.8-2: Sediment Quality in Streams in the Project Area Sample Location DV 3 DV 1 Am 1 Dvoinoye Dvoinoye DV 2к Zh 2 DV 6 Od 2 Ametyst R below DV 4 Zh 1 DV 7 Parameter R. Dvoinoye Zhila Ck ~1.5 km EDC Oda Creek Creek Ametyst Downstream Zhila Ck ~0.75 km upstream River DV 2 below downstream below above Ck end of tailings below downstream of mine below tailings of tailings West Pit Existing upstream facility East Pit of Dv 6 site West Pit facility facility Mine Site of Existing

Mine Site Concentration, mg/kg

Aluminum 33400 26900 24200 31500 21800 25500 23000 38600 31600 34800 31400

Calcium 17800 10600 9680 10300 11800 18600 30600 16200 18200 21000 25300

Iron 44400 33400 44700 42800 35100 38100 37700 49800 48900 43000 48600

Manganese 1150 1240 1330 1460 1070 1260 1240 1420 1350 1430 1480 1500

Magnesium 13500 11300 15500 12800 12600 14200 12400 16100 16600 16300 14200

Titanium 4760 4200 5360 4570 4250 4510 3860 5590 5650 5200 5500

Antimony <2 <2 <2 <2 <2 <2 <2 <2 <2 <2 <2 4.5

Lead 31.9 26.57 28.9 31.42 32.12 49.02 78.36 50.26 122.5 90.08 127.69 32

Chromium 27.6 24.97 38.9 33.51 25.69 26.16 25.43 37.14 36.01 33.9 35.76

Arsenic <5 <5 <5 <5 <5 <5 <5 <5 <5 <5 <5 2

Copper 36.1 19.97 23.0 31.21 38.91 33.52 45.45 43.11 58.6 56.79 63.3 66

Zinc 72.57 58.99 71.85 63.67 63.67 67.4 124.42 96.05 174.57 122.33 182.04 55

Nickel 9.01 9.3 17.85 12.75 7.63 7.65 6.29 11.2 9.91 9.36 9.38 40

Cobalt 20.8 23.08 26.28 28.37 21.5 22.47 17.92 32.11 26.65 26.01 24.69

Strontium <4 <4 <4 <4 <4 <4 <4 <4 <4 <4 <4

Exceedances of the EDC/MPC are shown in highlighted text

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Sediment quality indicates that zinc concentrations are generally higher in the area than local guidelines, and suggest a natural, geologic source for the higher zinc in sediments since areas upstream of the existing facilities also had zinc concentrations above the guidelines. The data also show that beginning at sampling location Dv 4, located at the downstream end of the existing tailings facility, the operation of the existing processing plant and tailings facility has had an impact on sediment quality. Concentrations of lead, copper, and zinc are higher than upstream background levels. Higher than background levels persist downstream at Dv 6 and Dv 7, 1.5 km and 2.5 km downstream of the tailings area respectively.

To better understand the contribution that the operation of the former mine may have had on water quality, water in the tailings impoundments was also tested in 2010 prior to closure of the facility in 2011. As noted earlier, the tailings facility consisted of separate areas for placement of gravity+flotation tailings and cyanide tailings. A water sample was collected from each of these areas, and the results are presented in Table 4.8-3. Table 4.8-3: Water Quality - Former Tailings Facility TSF. 4. TSF. 2. Sampling Location Units MPC. Gravity+flotation cyanide tailings tailings pH 6.5-8.5 7.31 7.65 Suspended solids mg/L .+0.25 10.0 4500.0 Dry residue mg/L 114.0 412.0 Cyanide mg/L 0.05 0.2 0.60

Thiocyanates mg/L 0.1 2.5 11.90

Sodium mg/L 120 10.2 41.6

Potassium mg/L 50 5.25 16.50

Calcium mg/L 180 15.6 36.0

Magnesium mg/L 40 2.9 14.9

Ammonium ion mg/L 0.5 1.11 0.62

Iron mg/L 0.1 <0.01 1.0

Hydrocarbons mg/L 40.0 86.0

Chloride mg/L 300 <1 12.7

Sulphate mg/L 100 44.4 151.4

Nitrate mg/L 40 1.5 4.8

Nitrite mg/L 0.08 0.18 0.44

Phosphate mg/L 0.2 <0.05 <0.05

Copper mg/L 0.001 0.46 0.47

Zinc mg/L 0.01 <0.004 0.054

Lead mg/L 0.006 0.0011 0.0090

Manganese mg/L 0.01 0.02 0.46

Strontium mg/L 0.4 0.07 0.11

Silver mg/L

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TSF 4. TSF 2. Sampling Location Units MPC. Gravity+flotation cyanide tailings tailings Nickel mg/L 0.01 <0.01 0.2 Cobalt mg/L 0.01 <0.01 0.06 Chromium mg/L 0.07 <0.02 <0.02 Antimony mg/L 0.017 0.05 Arsenic mg/L 0.05 <0.05 <0.05 Mercury mg/L 0.00001 0.00003 0.00043 Selenium mg/L 0.002 0.01 0.02 Cadmium mg/L 0.005 <0.001 <0.001 mg- Hardness 1.017 3.021 ekv/dm3 Carbonates mg/L <1 <1 Aluminum mg/L 0.04 <0.04 <0.04

Exceedances of the MPC are shown in highlighted text

The results indicate that elevated levels of a number of compounds and elements occurred in the tailings water, including suspended solids, cyanide, ammonia, sulphate, copper, lead, zinc, manganese, antimony and selenium. Generally, concentrations were higher in flotation tailings than in the cyanide tailings, including cyanide concentrations. Of the parameters tested, only ammonia concentrations were higher in cyanide tailings.

The high copper concentrations in the tailings water relate well to the high concentrations in the Dvoinoye River at sampling location Dv 4, and suggest that prior to closure of the tailings facility in 2011, the tailings facility had influenced water quality in the Dvoinoye River (copper concentrations in the tributaries, Zhila Creek and Ametyst Creek, were much lower than in the Dvoinoye River). There is also indication that sulphate concentrations increased at Dv 4 as a result of the former tailings facility. Zhila Creek joins the Dvoinoye River downstream of Dv 4, and therefore would not likely influence water quality in the Dvoinoye River at this location, despite the very high sulphate concentrations in Zhila Creek. However, the increase in sulphate levels from Dv 4 to Dv 5 is likely due to the influence of Zhila Creek (and may also account for the increase in nitrate concentrations from Dv 4 to Dv 5). The influence of Zhila Creek appears to persist downstream to Dv 6, where concentrations of sulphate and nitrate were still elevated over upstream levels.

Nitrate concentrations in the tailings pond were lower than in Zhila Creek, and indicate that nitrate loading to the Dvoinoye River comes primarily from Zhila Creek, which drains the former East Pit area. The higher nitrate concentrations likely represent blasting residues from former mining operations.

The potential mobility of metals in the tailings facility was roughly estimated based on the composition of the tailings materials (Table 4.8-4).

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Table 4.8-4: Composition of Tailings - Former Tailings Facility

Хв. 4, Хв. 1, Sampling Location Site drainage flotation MPC Flotation Tailings Tailings

Concentration %

Silicon dioxide 76.5 83.6

Titanium dioxide 0.2 0.14

Aluminum trioxide 7.7 6.1

Iron trioxide 5.2 1.9

Manganese oxide 0.7 0.07

Magnesium oxide 0.9 1.1

Calcium oxide 1.1 1.2

Sodium oxide 1.1 0.4

Potassium oxide 3.5 2.9

Phosphorus pentoxide 0.1 0.06

Sulphur. 2.7 0.34

Concentration (mg/kg)

Barium 330.0 191.0

Antimony 35.0 34.9 4.5

Lead 127.7 81.5 32.0

Chromium 57.8 38.0

Arsenic 348.0 <5 2.0

Copper 71.4 49.0 66.0

Zinc 182.0 94.4 110.0

Nickel 18.5 9.6 40

Cobalt 33.0 15.4

Strontium <4 <4

Exceedances of the MPC are shown in highlighted text

The composition of the tailings shows that lead, arsenic, copper and zinc were all high in the tailings. However, in comparison to water quality at Dv 4, it appears that only copper was relatively mobile. The remaining metals and metalloids did not increase in the Dvoinoye River below the tailings facility and suggest limited mobility for these elements.

The results of the 2011 sampling campaigns (Table 4.8-1), in surface waters indicates that following closure of the former tailings facility, there has been a reduction in concentrations of copper and zinc at sampling locations downstream of the former facility.

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4.8.2 Dvoinoye-Kupol Road Water and sediment quality data for various streams and rivers along the proposed route of the all-weather road to Kupol are provided in Table 4.8-5 and Table 4.8-6 respectively.

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Table 4.8-5: Surface Water Quality in Water bodies along the Dvoinoye-Kupol Road Concentration mg/L

Parameter 2, 4, 7, 11, 12, 13, 14, 18, Pr. 20, Sr. 3, Маly 8, Lake 10, Lake EDC Starich- Pastbish- Utkuveem Tytylvaam Tytliutin Tytliutin Tytliutin Yarakvaam Yarakvaam Аnuy R. Rybnoe. Tytyl naya R. chnaya R. R. R. R. R. R. R. R.

pH 6.5-8.5 6.97 6.70 6.99 6.88 6.88 6.65 6.85 5.96 5.77 6.28 6.64 6.76

Suspended solids .+0.25 16.0 2.0 <2 4.0 6.0 <2 <2 5.0 <2 <2 6.0 3.0 Dry residue 67.0 47.0 56.0 37.0 38.0 30.0 31.0 29.0 22.0 17.0 20.0 32.0 Sodium 120 4.3 2.40 2.3 1.60 1.60 0.8 0.9 0.8 0.8 0.9 0.8 1.1 Potassium 50 0.70 0.48 0.31 0.20 0.12 0.10 0.09 0.09 0.09 0.10 0.12 0.19 Calcium 180 6.0 6.7 7.6 5.9 5.4 4.8 4.8 4.6 1.6 1.04 1.4 0.19 Magnesium 40 2.20 0.70 1.6 0.37 0.54 0.25 0.45 0.6 0.4 0.25 0.3 0.29 Ammonia ion 0.5 0.16 0.19 0.21 0.24 0.15 0.19 0.15 0.21 0.13 0.13 0.19 0.27 Iron. 0.1 <0.01 <0.01 <0.01 0.01 <0.01 <0.01 <0.01 <0.01 <0.01 0.02 <0.01 0.02 Hydrocarbons 27.0 22.0 24.0 22.0 20.0 11.0 13.0 14.0 <10 <10 <10 11.0 Chloride ion 300 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 <1 Sulphate 100 12.3 8.2 11.1 3.6 3.6 6.0 5.8 4.3 3.0 2.7 2.7 5.9 Nitrate 40 <0.1 <0.1 0.21 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 Nitrite 0.08 0.04 0.04 <0.02 0.02 <0.02 <0.02 <0.02 0.08 0.07 0.06 0.04 0.04 Phosphate 0.2 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 Copper 0.001 0.002 0.001 0.002 <0.001 0.001 0.002 <0.001 <0.001 <0.001 0.002 0.002 0.002 Zinc 0.01 <0.004 <0.004 <0.004 <0.004 <0.004 <0.004 <0.004 <0.004 <0.004 0.01 0.004 0.03 Lead 0.006 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.01 Manganese 0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 Strontium 0.4 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 Nickel 0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 Cobalt 0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 Chromium 0.07 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 Antimony <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 Arsenic 0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 Selenium 0.002 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 Cadmium 0.005 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001

Exceedances of the EDC (MPC) are shown in highlighted text

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Table 4.8-6: Sediment Quality in Water bodies along the Dvoinoye-Kupol Road

2, 4, 7, 11, 20, Sr. 14, 18, Pr. 3, Маly 10, Lake 13, Tytliutin 12, Parameter Starich- Pastbish- Utkuveem Tytylvaa Yarakvaam Tytliutin Yarakvaam EDC Аnuy R. Tytyl R. Tytliutin R. naya R. chnaya R. R. m R. R. R. R.

concentration, mg/kg

Aluminum 12000 14900 11500 8200 8590 12600 9730 17600 11300 18600 15100

Calcium 18800 14800 16000 13800 9970 10500 12300 11800 10800 20400 11800

Iron 27200 23400 24600 16100 14700 19600 20300 23900 20500 37400 34900

Manganese 1110 1110 1250 880 760 780 850 970 840 980 950 1500

Magnesium 8020 7650 7370 7290 5450 6290 6430 7350 6460 12600 9720

Titanium 3460 3570 3440 1830 1610 2460 2220 2450 1950 3060 2300

Antimony <2 <2 <2 <2 <2 <2 <2 <2 <2 <2 <2 4.5

Lead 9.32 15.71 9.75 11.02 8.89 14.68 12.68 24.51 13.3 14.27 21.89 32

Chromium 25.43 29.1 28.66 28.72 18.62 20.37 19.0 19.91 16.72 28.59 29.63

Arsenic <5 <5 <5 <5 <5 <5 <5 <5 <5 <5 <5 2

Copper 10.4 9.72 9.01 8.43 6.52 8.18 9.62 16.44 12.01 12.1 14.18 66

Zinc 73.28 100.39 73.59 69.09 48.66 53.4 50.1 56.9 55.25 54.86 57.71 55

Nickel 3.41 3.41 3.34 4.82 2.94 3.38 3.26 3.26 2.99 7.08 14.35 40

Cobalt 13.3 12.45 12.89 10.3 7.71 8.47 8.36 9.77 7.94 11.73 12.32

Strontium <4 <4 <4 <4 <4 <4 <4 <4 <4 <4 <4

Exceedances of the EDC (MPC) are shown in highlighted text

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The water quality data indicate that most rivers are of circum-neutral pH, with the exception of the Tytliutin River, which was slightly acidic (pH ranged down to 5.77). The data also indicate that copper is slightly elevated in a number of rivers, as well as in Lake Tytyl, likely due to natural geological sources, since there is no development in these areas.

Sediment quality data indicate that with the exception of zinc, which exceeded the EDL at a number of locations, all parameters were within acceptable levels. The higher zinc concentrations likely reflect regional conditions as determined by local geology. 4.9 Biological Environment The summary of existing biological conditions is derived from the environmental studies reports compiled by VNII 1 (VNII-1 2011). These have been included in Appendix D. 4.9.1 Terrestrial Environment 4.9.1.1 Vegetation and Soils According to the soil-geographic zoning classification system of the North-East Asia region, soils in the area of the Project are characterized as belonging to the arctic tundra-humid mountainous province. The main distinguishing feature is the development of differentiated high-altitude zones of podsols, peat and humus, cryosols, peaty- gleysols (tundra), embriozemic peats and humus. The predominant soil type in areas of permafrost is the cryosols.

Soils are shallow, and comprised of a surficial layer of coarse detritus in various stages of decomposition (Photo 7), overlying brown cryosol soils. Soils are generally characterized as having low nutrient quality.

The main components of soil cover consist of the following three soils types (Figure 13);  weakly developed soil and peaty turf in a mosaic of rocky and pebble-sand placers on disturbed area on the slopes and bottoms of river valleys. These soils have higher humus content and generally low concentrations of nutrients to support plant growth;  peaty cryosols in a mosaic of stony placers. Concentrations of available nutrients to support plant growth are generally very low in these soils; and  sod soil with turf soils of varying thickness. These soils typically have higher levels of coarse humus, greater base exchangeable capacity and higher nutrient levels.

Rock and cobble underlie the shallow soils (Photo .8) particularly in the valleys, and are characteristic of former river bottoms and downslope movement. Large areas of the Project site however have no developed soils due to exposed rock.

In areas of arctic tundra, soil renewal processes are extremely slow. Development of soil layers suitable to sustain vegetation growth, particularly in disturbed areas, can take several decades. In the river valleys where there is higher moisture and clay content from upstream erosion, soil temperatures are generally warmer and pioneer plant species can establish a foothold. In these areas soil development processes can result in accumulation of 2-3 cm of peaty soil in approximately 10-15 years.

In general, soils can be characterized by the following overall composition and properties:  pH - 4,5-5,9

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 humus content: . organic and organo-mineral horizons -> 15% . mineral horizons – 3%  nitrogen - <1 mg/100 g soil  potassium - 16-109 mg/100 g soil  Phosphorus - 11-25 mg/ 100 g soil  base exchange capacity,% - 12-67. The soils are generally considered as poor for reclamation purposes, and will require augmentation with nutrients in order to support revegetation. Nonetheless, in consideration of the general lack of soils in the area, it is considered expedient to preserve soils where available for use in future reclamation.

Soil quality in the area of the Project was assessed in 2011 (VNII-1 2011), and the results are provided in Table 4.9- 1. Table 4.9-1: Soil Quality Am 1 Dv 3 Dv 4 Яр 2 Beside Dv 6 Dv 7 Tributary Near Near Along Pravy Яр ВП Approx. Sampling to Upstrea Downstrea Approx. Yarakvaam Approx. 2 km 1 Dvoinoy m End of m End of 1 km Downstream 1 km MPC Location Downstrea e R. Former Former Downstrea of Proposed Downstrea m of Former above Tailings Tailings m of Dv 6 Infrastructur m of Яp-2 Mine Site Former Facility Facility e Mine Site

Parameter Concentration. Mg/kg dry weight

Lead 15.5 17.0 145.0 35.5 26.0 22.0 18.0 32.0

Copper 16.0 16.0 82.0 47.7 30.5 27.0 30.0 66.0

Zinc 230.0 203.5 835.0 395.0 2550.0 250.0 210.0 110.0

Nickel 11.2 12.5 20.5 20.0 16.5 12.5 13.1 40.0

Manganese 340.0 395.5 895.0 815.0 810.0 400.0 370.0 1500.0

Chromium 19.0 18.5 32.0 40.0 22.5 25.0 21.0

Antimony <0.1 2.0 <0.1 <0.1 <0.1 <0.1 <0.1 4.5

Arsenic <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 2.0

Cadmium 0.2 <0.1 2.25 <0.1 0.25 <0.1 <0.1 1.0

Mercury 1.0 1.5 2.75 6.5 0.27 <0.1 <0.1 2.1

1 – MPC –Maximum Permissible Concentration. Concentrations that exceed the MPCs are highlighted.

The data indicate that while most parameters are below their respective guidelines, zinc levels in soils are naturally elevated and likely reflect local geologic conditions. Concentrations of a number of metals, including lead, copper, cadmium, nickel, manganese, zinc and mercury are elevated and exceed the MPCs near the existing mine site and tailings facility, and the area of influence appears to extend downstream along the Dvoinoye River valley. Metals concentrations in soils in these areas are higher relative to locations removed from the former tailings and

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processing areas, suggesting that previous mining activities have resulted in local increases in the concentrations of some metals in soils.

Soil quality at various sites along the proposed Dvoinoye-Kupol Road is provided in Table 4.9-2 and soil types are shown on Figures 8a to 8m. Soils consist mainly of stony deposits with variable mixtures of bog, meadow and humus soils. Boggy soils typically occur in local depressions and in the numerous river valleys along the proposed access route. Meadow soils usually occur in the river valleys in areas of alluvial deposits. Bedrock outcrops with thin or no soils occur along the steeper slopes.

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Table 4.9-2: Soil Quality Along the Dvoinoye-Kupol Road

4, 7, 11, 20, Sr. 18, Pr. 2, Starich- 3, Маly 10, Lake 14, 13, 12, Location Pastbish- Utkuveem Tytylvaam Yarakvaam Yarakvaam MPC naya Аnuy R. Tytyl Tytliutin R. Tytliutin R. Tytliutin R. chnaya R. R. R. R. R.

Parameter Concentration mg/kg, dry weight

Lead 6.90 8.1 10.0 12.5 14.0 12.0 12.8 44.0 15.8 22.4 45.0 32

Copper 3.75 3.45 3.05 3.65 2.95 15.2 3.7 7.1 1.85 13.7 14.1 66

Zinc 129.5 195.7 270.8 132.0 350.8 330.8 509.5 270.8 409.5 199.5 169.5 110

Nickel 12.5 13.5 5.9 12.0 14.6 18.9 12.0 3.4 5.2 47.3 34.0 40

Manganese 162.5 262.5 462.5 207.5 297.5 1500.0 303.8 182.5 251.3 486.3 186.3 1500

Chromium 15.1 20.0 22.0 24.8 27.9 31.8 22.6 <0.1 18.3 69.4 12.7

Antimony <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 4.5

Arsenic <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 2

Cadmium <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 1.0

Mercury <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 2.1

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Vegetation in the area is characteristic of tundra vegetation. The site is north of the tree line, which occurs approximately 11 km to the southeast in the valley of the Yarakvaam River. Consequently, forest vegetation communities are absent. Vegetation communities are largely absent in disturbed areas due to a lack of suitable soils and as a result of disturbance due to previous mining activities. These areas include the existing mine processing area, tailings facility, open pits, and existing supporting infrastructure.

Steep mountain slopes are generally devoid of vegetation, and are comprised of loose rock (scree/talus slopes) (Photo 9). Low tundra vegetation occurs at lower elevations where slopes are less steep, and in the river valleys (Photos 10 and 5). Vegetation is typical of the Chaunskiy floristic areas of the Arctic and includes willow (Salix spp.), grasses, sedges, forbs (i.e., herbaceous flowering plants), lichens and mosses (e.g., Sphagnum). (A full list species is provided in Appendix D-1). The relative proportions of each differ depending on soil and moisture conditions, and are the basis for the different plant communities described below.

The main vegetation communities identified in the Project area are described below, and their distribution within the Project area is shown on Figure 14:  Lichen tundra: the lichen tundra vegetation communities occupy the dry flat ridges along the foothills where there are relatively flat well-drained slopes (Photo 10). Lichen tundra is rarely found at the mountain tops and in the Dvoinoye River valley. The vegetation community is dominated by lichens which cover 30-70% of the surface, often with significant admixtures of mosses. The remaining 20-60% is comprised of a herb-shrub community that typically includes mountain heather, dryad species (Dryas punctata), Diapensia obovata, cranberries and blueberries, Labrador tea and various species of willow (Salix spp.). Sedges comprise minor components of this community and are mainly comprised of Saxifraga species. Low shrub willows may occasionally be present in these communities, but they comprise less than 5% of the vegetation cover.  Shrub tundra: shrub tundra replaces the lichen tundra on the wetter slopes. In these areas, the moss-lichen community comprises approximately 30-50% of the vegetation cover, although mosses may dominate in wet areas. On sections of scree slopes the moss-lichen cover may be completely absent. In this community, the herb-shrub layer comprises 50-90% of the vegetation cover. The shrubs are dominated by various species of willow (Salix spp.), and Dryas punctata. Among the most common sedge are Carex spp., Saxifraga spp., Arctic bluegrass, valerian and wormwood. Depending on the moisture conditions of the soil the vegetation community may also include blueberries cranberries and herbs such as wintergreen and red serpentine pinnate.  Willow grass-forb The willow grass-forb community is distributed in narrow discontinuous bands in the Dvoinoye River valley. The moss-lichen cover is not developed in these areas. The shrub layer is comprised of willows that reach a height of 0.5 m and provide up to 20% of the vegetative cover. Dryas punctata is the dominant herb species, providing up to 20% of the vegetative cover. Grasslands are mainly comprised of Carex spp., and saxifrage.  Grass-forb meadows - distributed along the channel of the Dvoinoye River upstream of the site (Photo 5). In the upper reaches, these form narrow discontinuous strips along the river banks. In downstream areas, the grass-forb meadows almost completely occupy the bottom of the valley. Moss-lichen cover is absent or poorly developed. The dominant species are Dryas punctata, Carex spp., and Salix spp., which comprise 30% or more of the vegetative cover. Of these, the shrubs such as dryads and willow typically comprise approximately 10% of the vegetative cover.

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 Shrub-herb tundra: The shrub-herb tundra is found in fragments on along the upper Dvoinoye River due to anthropogenic disturbances in this area. The moss-lichen community generally forms less than 20% of the vegetation cover, with shrubs and grasses comprising the majority of the vegetation cover. Shrubs are represented by dryads (20%) and willow (10%). Grasses, which are dominated by sedges, saxifrage, and wormwood generally comprises approximately 10% of the vegetation cover.

Figure 14 shows that the majority of the Project area is classified as stony desert with areas of lichen tundra (67%) and barrens (15%). Areas of low bush tundra, grass meadows, and willows that would be the more productive habitats comprise approximately 2% each. These lie predominantly outside of the Project footprint area (i.e., new Project infrastructure will be located mainly in the areas of stony desert and barrens, with no significant incursions into the tundra and meadow habitats).

In total the vegetation assessment of the Project area and the adjacent territory recorded a total 110 species of vascular plants belonging to 69 genera and 27 families (VNII-1 2011; Appendix D-1). Three species, growing in the Project area, Descurainia sophioides, Tripleurospermum hookeri and Puccinellia sibirica are found exclusively in disturbed areas and are present due to human disturbance. On the scree slopes on the Dvoinoye River valley, cineraria Yakut (Tephroseris jacutica) was recorded, which is included in the Red Book for the Chukotka Autonomous Okrug. The plant is classified as a third category of rare species since it occurs here at the north- eastern limit of its range. As a result, mitigation measures will need to be implemented to protect areas where this species grows, and monitoring of populations is also recommended.

Soils and vegetation along the Dvoinoye-Kupol Road have been assessed by VNII-1, and soils and vegetation types have been mapped (Figures 8a to 8m). The physiography and soils types generally determine the character of the vegetation communities.

Vegetation assessment along the existing winter road has identified 7 main vegetation communities:  Stony tundra with lichen: most common along higher elevations in areas of steep slopes and bedrock outcrops;  Cotton-grass and low bush tundra, common in areas of higher elevation but gentler slopes, on both hilly and flat glacial plains. The most common vegetation type along higher elevation river valleys;  Lichen and low bush tundra; generally along well drained areas of moraine ridges and glacial terraces;  Sedge and cotton grass swamps/wetlands, common along the southern margin of Lake Tytyl and along the banks of rivers and streams;  Grass and willow communities occur sporadically, generally on lower slopes leading to the river valleys; and  Grass meadows, generally most common in the low river valleys. In general the vegetation communities are similar to those encountered at the Project site. Most of the northern section of the road (i.e., north of Lake Tytyl, Figures 8a to 8f) is characterized by higher elevations, with stony tundra predominating in these areas. In these habitats, vegetation communities, where present, were limited to lichens. More diverse plant communities occurred only in the river valleys. The road alignment would typically avoid these habitats wherever possible due to the difficulties of constructing and maintaining a road on less stable ground.

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The sedge and cotton grass swamps become more common in the lower elevation river valleys, particularly those of the larger rivers such as the Maly Anuy and Pastbishchnaya as well as along the margin of Lake Tytyl. The sedge and cotton grass swamps were not recorded in the higher elevations that occur at the Project site. Even in the southern section (i.e., south of Lake Tytyl Figures 8f to 8m), the road follows the higher elevations, which were characterized by stony tundra, due to the ease of construction on more stable slopes. 4.9.1.2 Terrestrial Fauna 4.9.1.2.1 Project Site The Project is in Chukchi Zoogeographic District, within the Bering sub-province of the Arctic subregion of the Holarctic. The terrestrial fauna of the area has been poorly studied in the past, and the studies undertaken have been limited to isolated areas, none of which are close to the Project site. As a result, field investigations were undertaken during the summer of 2010, and focused on the results of visual observations, supplemented by small mammal trapping and interviews with local inhabitants.

The terrestrial fauna is limited to insects (typically not included in baseline assessments), birds and mammals. Reptiles and amphibians are absent from these arctic areas. A total of 15 bird species and 9 terrestrial mammal species were recorded during the 2010 investigations (VNII-1 2011; Appendix D-1).

The availability of vegetation strongly influences the availability of habitat for bird and mammal species. As noted in Section 4.9.1.1, 82% of the Project area is comprised of stony desert and barrens (Figure 14). These areas would have minimal habitat value, and as a result, the majority of the species present would occur in the remaining 16% (2% of the area is previously disturbed by mining activities) that occur in the vegetation communities confined to the lower elevations around the river valleys. As noted earlier, Project infrastructure is located mainly in the stony desert and barrens, and not in the lowland river valleys.

In general, the majority of the bird fauna was represented by migratory species that occur in the river valley habitats, or on the vegetated tundra. A single species (herring gull) was observed only in disturbed areas of the existing mine site. Herring gulls are common scavengers around human settlements. The common bird species near the Project site included the herring gulls, tundra redpoll, red-throated pipit and snow bunting.

Species observed in the region of the Project (though not necessarily on-site) were:  white billed loon (Gavia adamsi) – a pair was observed only at Lake Goluboye;  common teal (Anas crecca) – observed approx. 10 km from the Project site;  Rough-legged buzzard (Buteo lagopus) – observed in the upper reaches of the Dvoinoye approx. 5 km from the site;  Ptarmigan (Lagopus lagopus) – nesting birds observed in the lower reaches of the Dvoinoye River approx. 6 km from the site;  Grey-tailed tattler (Heteroscelus brevipes) nesting birds observed in the upper reaches of the P. Yarakvaam R.;  Herring gulls (Larus argentatus) – numerous birds in the vicinity of the existing mine;

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 Glaucous gull (Larus hyperboreus) – small number of birds (3) observed in the upper reaches of the P. Yarakvaam R.;  White wagtail (Motacilla alba) – uncommon for this region;  Red-throated pipit (Anthus cervina) – while typical of the tundra, was scarce locally;  Blue-throated robin (Cyanosylva svecica) – generally rare in the area, was observed in the upper reaches of the Dvoinoye R.;  Northern wheatear (Oenanthe oenanthe) – uncommon in the area;  Pallas’ bunting (Emberiza pallasi) – uncommon in the area, a single male observed in the upper reaches of the Dvoinoye R.;  Snow bunting (Plectrophenax nivalis) common species in the area, present in the upper reaches of the Dvoinoye and P. Yarakvaam Rivers;  Hoary redpoll (Acanthis hornemanni) – common species in the area. Breeding pairs and migratory flocks observed in the upper reaches of the P. Yarakvaam R.; and  Raven (Corvus corvax) – uncommon for the area, though a pair of adults with young bird were observed in the area of the mine camp.

Population densities were generally very low, and individuals were sparsely distributed, reflecting the general inability of the local habitats to support large populations due to limited food availability.

Of the species listed above, only the white-billed loon is listed under the IUCN as a Category 3 (rare species with narrow habitat and sporadic distribution). Due to lack of suitable aquatic habitat in the immediate area of the Project, the loon is not likely to be present in the area of the Project, but rather, would likely occur in open aquatic habitats such as Lake Goluboye. Most of the bird species observed were in natural habitats, away from the existing mine site. Only those species that are associated with human activities and disturbances, and that habitually scavenge at these sites were observed at the mine site. These were limited to the two species of gulls and the raven.

Small mammals were generally observed in upland habitats, and included hares, lemmings and ground squirrels. (A full list of species recorded in the baseline investigations is provided in Appendix D-1) The list of species either observed in the area, or for which anecdotal evidence is available (i.e., through interviews with local inhabitants) includes:  Mountain hare (Lepus timidus) – tracks and droppings observed in the upper reaches of the Dvoinoye and P. Yarakvaam Rivers;  Northern pika (Ochotona hyperborea) – individuals and sign (droppings) observed on rocky slopes around the Project site;  Arctic ground squirrel (Spermophylus parryi) – observed in the Dvoinoye and P. Yarakvaam River valleys;  Lemming vole (Alticola lemminus) – common species in the area, generally in the upper reaches of the Dvoinoye River;

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 Root vole (Microtus oeconomus) – uncommon in the area, generally in the for-grass tundra in the upper reaches of the Dvoinoye River.  Fox (Vulpes vulpes) – not directly observed but signs were present in the upper reaches of the Dvoinoye River. Would feed on the smaller mammals listed above;  Wolf (Canis lupus) – not directly observed but sightings reported by site personnel, usually in fall and winter. Predator on reindeer;  Wolverine (Gulo gulo) – not directly observed but occasional sightings reported by site personnel in winter;  Reindeer (Rangifer tarandus) – not directly observed, but sightings of small groups (up to 50 animals) reported by site personnel, during autumn and winter migrations. Large groups (500-1000) have been observed in the area of Lake Goluboye and the upper Pravy Yarakvaam R (approx 4 km from the Project site). The species is currently included in the list of Chukotka species in need of special attention.

Small mammals are relatively sparsely distributed relative to more southern climes, likely due to the limited food resources. Most observations of small mammals occurred in the river valleys, where potential food sources are greatest. The low population density of small mammals in turn limits the populations of local carnivores, and none of the species are reported as having large local populations. Most of the above noted species of mammals do not occur on the Project site due to the existing habitat disturbance, generally sparse habitat and lack of available food resources, but some important species, such as reindeer, have been observed relatively close to the site.

The species found within the broader area of the Project are those typical of the region. No rare, threatened or endangered species were observed at the site. 4.9.1.2.2 Dvoinoye-Kupol Road The results of the survey along the northern section of the proposed road and the adjacent area noted 20 species of birds belonging to 5 orders, and 7 species of terrestrial mammals, belonging to four orders. The majority of the bird species (55%) were Passeriformes (i.e., typical songbirds) (VINN-1 2011b; included as Appendix D-2).

The alignment of the road in the northern sections generally follows the higher elevations, where habitats are mainly stony tundra with vegetation limited to lichens. In the southern section, where the road traverses the larger river valleys and the borders of Lake Tytyl, does the alignment cross more favourable habitats. As a result of limited habitats in the northern section, fewer species have been observed in these areas.

Along the northern section of the road, the species observed were similar to those observed on-site, and were generally limited in numbers.

Common bird species observed along the north section of the road included horned lark (Eremophila alpestris), Red Nightingale (Calliope calliope), Northern Wheatear (Oenanthe oenanthe), Tundra Redpoll (Acanthis hornemanni), and Snow bunting (Plectrophenax nivalis). Protected species that may occur in the area include golden eagle (Aquila chrysaetus), Peregrine falcon (Falco peregrines), and Eurasian dotterel (plover) (Charadrius morinellus).

Common mammal species observed included the North Siberian vole (Microtus hyperboreus), Arctic lemming (Dicrostonyx torquatus), the brown lemming (Lemmus trimucronatus), stoat (Mustela ermine), and the arctic fox (Alopex lagopus).

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A much larger number of species was observed along the southern section of the road (58 species belonging to 6 orders) reflecting the greater diversity of habitats available in this region. A full list of observations of birds and mammals is provided in VNII-1 (2011b) (Appendix D-2).

Common bird and mammal species observed included:  birds– the horned lark (Eremophila alpestris), Nightingale Red-Calliope calliope, Water Pipit (Anthus rubescens);  mammals - Arctic lemming (Dicrostonyx torquatus), Arctic ground squirrel (Spermophylus parryi), hare (Lepus timidus), weasel (Mustela nivalis), arctic fox (Alopex lagopus).

Rare and protected species recorded from the area of the road included:  birds – Eurasian dotterel (Charadrius morinellus), white-billed loon (Gavia adamsii), peregrine falcon (Falco peregrines), and gyrfalcon (Falco rusticolus).  mammals - North Siberian vole (Microtus hyperboreus), and bighorn sheep (Ovis nivicola). A large number of bird species were observed in the area of Lake Tytyl, and in the valley of the Maly Anuy River, particularly in the swamps, wetlands and oxbows of the river. Breeding pairs of a number of species have been observed in these areas, and indicate that the lowland areas and wetlands are important breeding habitats for a large number of species.

In general the lowland habitats and particularly lake and river margins provided the largest number of species of birds and mammals and are the most important habitats since these are used for breeding and rearing. These are also the most productive areas, and provide the greatest habitat diversity of the areas along the proposed route. 4.9.2 Aquatic Environment Streams consist of a range of stream types, from permanent larger rivers that have flow year round, to small, seasonally flowing streams at the headwaters of the larger rivers. The larger rivers are typified by the lower reaches of the Yarakvaam. The Project is located near the headwaters of the Dvoinoye and Pravy Yarakvaam Rivers. Upstream of the Project site, the river is characterized by small channels that carry primarily snowmelt and rainfall runoff, and therefore flow only during the warmer months. These small tributaries are either dry or frozen much of the year. Downstream, as the rivers gather more tributaries, they widen and deepen, and, at least in the open water areas in the lower reaches, flow occurs year-round.

The intermittent flows in the small streams that comprise the headwaters of the Dvoinoye River and its tributaries serve to limit the aquatic biological communities that are able to establish themselves in these watercourses. Fish are generally absent from these streams, though some species, such as the sculpins, may migrate up these watercourses during the summer months. However, due to the nature of these streams, there are no permanent fish communities present, and as the sparse benthic community indicates, food resources would also be limited. These streams differ from the downstream reaches, where rivers are larger and deeper and where areas exist in the winter where there is open water in which fish and other biota can seek refuge during the winter months. The downstream reaches tend to have more diverse benthic communities, and also support populations of fish year- round.

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The following sections describe the aquatic biotic communities in the Project area. 4.9.2.1 Benthic Communities 4.9.2.1.1 Dvoinoye Mine Site The benthic communities in the Dvoinoye River and Yarakvaam River are characterized by cold-water fauna adapted to fast-flowing, well oxygenated streams. Benthic community data has been summarized from VNII-1 (2011, Appendix D-3). Sampling locations are shown on Figure 12. Table 4.9.2-1: Benthic Communities in the Dvoinoye River in the Project Area Dv 3 Dv 6 Dv 7 Dv 1 Dv 2 Dvoinoye R. below Dvoinoye R 1.5 km Dvoinoye R, ca. 1 Location Dvoinoye R. above Dvoinoye R. below mouth of Ametyst downstream of km downstream of mine the West Pit Creek tailings Dv-6

Water 3.7 C N.A. 5.4 8.1 N.A. Temperature

Biomass Biomass Biomass Biomass Biomass Taxa # /m2 # /m2 # /m2 # /m2 # /m2 g/m2 g/m2 g/m2 g/m2 g/m2

Stonefly 1120 0.91 192 0.21 32 0.03 0 0 16 0.6 Mayflies 0 0 0 0 0 0 0 0 0 0 Caddis flies 0 0 0 0 0 0 0 0 64 0.58 Black flies 112 0.11 176 0.14 0 0 0 0 32 0.06 Chironomids 32 0.01 0 0 0 0 16 0.01 192 0.05 Oligochaetes 0 0 0 0 0 0 0 0 0 0 Diptera 0 0 0 0 0 0 0 0 0 0 Deuterophlebi 0 0 0 0 0 0 0 0 0 0 ids Total 1264 1.03 368 0.35 32 0.03 16 0.01 304 1.29

Table 4.9.2-2: Benthic Communities in Downstream Areas and Adjacent Watercourses Pravy Yarakvaam 1 Levy Yarakvaam R. Pravy Yarakvaam R. Location Dvoinoye R. downstream km below Yar village downstream downstream яр-1

Water 8.8 9.5 8.3 5.6 Temperature

Biomass Biomass Biomass Biomass Taxa # /m2 # /m2 # /m2 # /m2 g/m2 g/m2 g/m2 g/m2

Stoneflies 16 0.05 208 0.22 80 0.06 32 0.02 Mayflies 0 0 32 0.18 32 0.25 0 0 Caddis flies 0 0 16 0.05 0 0 0 0 Black flies 224 0.22 112 0.1 1008 1.22 576 0.48 Chironomids 128 0.03 256 0.35 336 0.15 2464 5.66 Oligochaetes 0 0 16 0.02 16 0.02 464 1.91 Diptera 0 0 0 0 0 0 16 0.03 Deuterophlebiids 16 0.01 48 0.06 0 0 0 0

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Pravy Yarakvaam 1 Levy Yarakvaam R. Pravy Yarakvaam R. Location Dvoinoye R. downstream km below Yar village downstream downstream яр-1

Water 8.8 9.5 8.3 5.6 Temperature

Biomass Biomass Biomass Biomass Taxa # /m2 # /m2 # /m2 # /m2 g/m2 g/m2 g/m2 g/m2

Total 384 0.31 688 0.98 1472 1.7 3552 8.1

The data show that in the small intermittent tributaries that form the headwaters of the Dvoinoye River, the fauna is limited to a few species that can adapt to the seasonally frozen conditions. In these stream reaches, benthic organisms will typically burrow into the substrate during the winter months when the stream is frozen. The upper reaches of the Dvoinoye River had limited fauna consisting of stoneflies (Nemoura arctica and Mesocapnia sp. both of which would be predatory on midges and black flies), midges (also referred to as chironomids) (Arctodiamesa sp. and Diamesa sp.) and 2 species of black flies (Simuliidae). All are characteristic of small, cold, often seasonally flowing streams.

As the rivers widen and deepen, the benthic community diversifies, and as shown by the data in Table 4.9.2-2, a larger range of species is found in these areas. The Pravy Yarakvaam River, being generally larger than the Dvoinoye River in the area of the Project, also has a more diverse fauna.

The above data also suggest that the existing processing area and tailings facility have had an impact on the benthic community of the Dvoinoye River (sampling locations Dv-3 and Dv-6). Both density and diversity of benthic organisms is reduced in the reaches below these areas compared to upstream areas (Dv-1 and Dv-2), but show signs of recovery further downstream (e.g., sampling location Dv-7). For example, at station Dv 6, only chironomid larvae of the genus Diamesa were present (Diamesinae are typical inhabitants of cold, melt-water streams). Further downstream at Dv 7, the benthic community diversifies, with the chironomids and simuliids (black flies) comprising the greatest density, though the stone fly Arcynopteryx altaica and the caddis fly Apatania comprised the largest biomass.

Downstream areas in the Pravy Yarakvaam River (and also further downstream in the Levy Yarakvaam River) indicate that a permanent benthic community exists in these streams, characterized by both immature insects that are primarily epibenthic, as well as benthic infauna such as oligochaetes and some species of chironomids. The dominant species were chironomids of the genus Diamesa, and a number of stonefly species. These would also provide limited resources to support local fish communities that may seasonally access these areas. 4.9.2.1.2 Dvoinoye-Kupol Road The proposed route of the all weather road to Kupol crosses a number of streams and rivers of varying size (the proposed route is shown on Figures 6a to 6d). Construction of the road has potential to affect water quality in these water bodies through increased erosion and sedimentation, as well as to affect habitat quality through physical disruption of the habitats in the vicinity, and downstream of the watercourse crossings. Accordingly, baseline data on benthic communities in some of the larger rivers has been collected (VNII-1 2011, Appendix D-5).

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The Dvoinoye-Kupol Road initially follows the valleys of the Dvoinoye and Pravy Yarakvaam Rivers. These have been addressed in the previous subsections, and are not discussed here. After the road leaves the valley of the Pravy Yarakvaam River, it turns south and follows the Tytliutin River.

Two locations were assessed along the Tytliutin River. Near the headwaters, in Tytliutin Pass, the benthic community consisted mainly of chironomids of the subfamilies Diamesinae and Orthocladiinae. Both are characteristic of cold, clear streams and generally oligotrophic habitats. As a result the species in these subfamilies may be particularly susceptible to increased erosion and sedimentation. The road alignment runs along the east side of the Tytliutin River, and a second sampling location was established downstream, where the road crosses the Malyi Tytliutin River. This is a small shallow stream that like the upper reaches of the Dvoinoye River, appears to be seasonal, flowing only during snowmelt and rainfall. A total of three taxonomic groups were found, of which the dominant species were the chironomids of the subfamily Diamesinae. Oligochaetes were also present though not as numerous as the chironomids. The other two taxa were represented by a few individuals of the stonefly genera Mesocapnia and Nemoura arctica. Both are adapted to cold oligotrophic waters.

Approximately 1 km downstream of the confluence with the Malyi Tytliutin, the benthic fauna of the main channel of the Tytliutin River again yielded a fauna dominated by the chironomids, with some individuals of the stonefly genera noted above. The river here is broad and shallow, and likely also flows only during the warmer months, which likely accounts for the very limited benthic fauna.

A third sampling location on the Tytliutin River was established approximately 1 km upstream from where the river flows into Lake Tytyl. The benthic community here was similar to the fauna described above.

The access road follows the east shoreline of Lake Tytyl. The shallow littoral areas of Lake Tytyl support a more diverse benthic community that in addition to the chironomids noted above, includes the subfamily Chironominae, as well as stonefly (Plecoptera), may fly (Ephemeroptera) and caddis fly (Trichoptera) species. As such, the lake supports one of the more diverse benthic communities encountered during the baseline studies.

Along the east side of Lake Tytyl, the lake receives another larger tributary, the Tytylvaam River. The Tytylvaam River is one of the larger rivers along this section of the road alignment, though faunal diversity was similar to the other rivers, and was comprised mainly of the chironomids and oligochaetes noted at the other rivers sampling locations.

From Lake Tytyl, the road alignment runs south, next crossing the Utkuveem River, which downstream of the road crossing drains to Lake Rybnoe. The benthic fauna of Lake Rybnoe consists of the chironomids and oligochaetes noted earlier, as well as species of snails (Planorbidae).

Further south the route crosses the Pastbishchnaya River, a tributary to the Malyi Anuy River. The benthic fauna in this stream was similar to the other rivers in that the chironomids of the subfamily Orthocladiinae were the most common organisms encountered, though notably larvae of the caddis fly Dicosmoecus were also present. The presence of the caddis flies suggest this is a larger river that likely experiences flow year round, which would provide suitable habitat for over-wintering caddis larvae.

The road alignment next crossed the Malyi Anuy River, the largest river along the proposed road alignment. The Malyi Anuy River flows to the northwest, ultimately draining to the Arctic Ocean. The river consists of broad shallow reaches characterized by riffles, and alternating deeper pools where there is likely open water year-round. The benthic fauna consequently was more diverse, and in addition to the chironomids and oligochaetes, included

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stonefly, mayfly, midge, and tipulid species. These likely provide an important food resource for local fish communities that would be expected to be present due to the large size and year-round flow in this river.

South of the Malyi Anuy River, the road crosses the Starichnaya River as it runs south to the Kupol site. The benthic community of this stream is similar to those of the other rivers, and is dominated by the chironomids.

The benthic communities encountered in the water bodies along the road alignment are generally limited in faunal diversity and density, and likely reflect the seasonal flow, and limited nutrients in these streams. Greater density and diversity of benthic organisms was encountered only in the large river and lakes, and these likely also provide sufficient food resources to support resident fish communities. The species encountered are all adapted to the oligotrophic conditions that characterize arctic streams, namely cold, clear waters of limited nutrients.

Given the paucity of benthic resources that are available to fish, the protection of the benthic communities is important to help sustain the local fish populations in these water bodies. 4.9.2.2 Fisheries 4.9.2.2.1 Dvoinoye Mine Site Assessment of fish species has focused on streams at and downstream of the Dvoinoye mine site. These include the Dvoinoye River, the Pravy and Sredny Yarakvaam Rivers, and Lake Goluboye. The studies conducted by VNII-1 have found that three fish species commonly occur in rivers downstream of the Dvoinoye mine site: the East Siberian Grayling (Thymallus arcticus pallasi), the malm (Salvelinus malma) also known as Dolly Varden, and the Slimy Sculpin (Cottus poecilopus) (Appendix D-4).

The East Siberian Grayling is endemic to eastern Siberia, where it is ubiquitous in the rivers of the Arctic coast to the east of Taimyr to Kolyuchinskaya. The East Siberian Grayling occurs in rivers from source to mouth and their tributaries, in lakes of various types, including flood plain, glacial, tectonic, and thermokarst lakes (they have been found in water bodies up to 1200 m above sea level). In flowing streams the species prefers areas with an average velocity of flow and bed slope of less than 10 m / km, but avoids the steeper rivers, as well as highly silted, turbid water with low-oxygen.

In the Project area, grayling spend their entire life cycle in fresh water. The East Siberian Grayling is common in the Yarakvaam River and Lake Goluboye, but no adults or juveniles were found in the Dvoinoye River during the survey. Since the Dvoinoye River in the Project area is a shallow rocky stream (see Photo 9) with a steep gradient and seasonal flow, it is likely that the habitat available is unsuitable. Since the Dvoinoye River freezes during winter, there would be no suitable deeper areas where grayling could over-winter. Only the lower reaches of the Pravy and Sredny Yarakvaam Rivers and Lake Goluboye would have deeper areas where the fish could over- winter, which likely accounts for their presence in these waters.

Due to their environmental requirements grayling have been considered as suitable biological indicators of water purity. Optimal habitat occurs in large deep lakes or areas in the middle reaches of rivers with sufficient food, favourable temperature conditions and water depth, and clean water. Seasonal movements are minor in extent. Spawning usually takes place in the deeper tributaries and oxbow lakes. They feed on the larvae, pupae and adults of aquatic insects (e.g., chironomids, caddis flies, stoneflies, mayflies), small molluscs, oligochaetes, small juvenile fish species and occasionally, small terrestrial mammals.

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The Malm (Salvelinus malma), also known as Dolly Varden trout, is an anadromous species that can spend the early part of its life cycle in fresh water. In the Project area, it is likely that this species spends a number of years in fresh water before migrating to the Arctic Ocean. The species generally over-winters in larger lakes, moving into tributary streams in the spring. Like the grayling, this species feeds mainly on aquatic insects and other invertebrates. Like the grayling, it is present in the deeper water bodies in the Project area (i.e., lower reaches of the Pravy and Sredny Yarakvaam Rivers and Lake Goluboye) year-round. In the Dvoinoye River, the species, if present, would only be present in the lower river where there is year-round flow, but may migrate into the middle reaches during the summer months when there is flow in the river. It is unlikely that the species would migrate into the upper reaches in the Project area due to the small size and shallow depths. Surveys conducted by VNII-1 found malm present only in Lake Goluboye, though local fishermen reported catching immatures in the tributaries of the Yarakvaam River (Sredny and Pravy Yarakvaam). As with the grayling, flows in the Dvoinoye River are intermittent, and the river is also very shallow, which likely accounts for the absence of this species in the Dvoinoye River in the Project area.

The Siberian or Slimy Sculpin (Cottus poecilopus), also known as the Alpine Bullhead, prefers cold mountain streams and oligotrophic lakes. It is found throughout the Palaearctic, from Scandinavia to Siberia. They prefer rocky streams with cobble substrates, which is where spawning typically occurs. The species overwinters in deeper waters of large rivers and lakes. There is no record of this species occurring along the Dvoinoye River in the area of the Project, though individuals may occasionally migrate upstream as far as the Project area during the summer months. 4.9.2.2.2 Dvoinoye-Kupol Road Important fish species observed in rivers and lakes long the proposed route included the East Siberian grayling, Dolly Varden, Arctic char and Peled whitefish.

Along the northern stretch of the proposed route (i.e., in the drainage basin of the Yarakvaam River), as noted above, only the East Siberian grayling and the Dolly Varden were observed. A more diverse fish fauna occurs in the southern section, in the drainage basin of the Maly Anuy River.  East Siberian grayling (Thymallus arcticus pallasi)– were common in all of the larger rivers, including the Tytliutin, Pastbishchnaya, Starichnaya, Utkuveem, as well as the Maly Anuy. The species was also observed in Lake Tytyl, at up to 18m depth.  Dolly Varden (Salvelinus malma) – were common in the larger rivers, including the Maly Anuy, Tytliutin, Pastbishchnaya, Utkuveem, Starichnaya, as well as in Lakes Tytyl and Rybnoe.  Arctic char (Salvelinus alpinus) – were observed only in Lake Tytyl and those rivers connected to the lake, such as the Utkuveem and Tytylveem.  Peled whitefish (Coregonus peled) – observed in Lake Rybnoe and the Utkuveem River. The species has also been caught by fishermen in Lake Tytyl.

The larger rivers and lakes in the southern section of the road contain more suitable habitat that permits important sport fish species to over-winter. The variety of habitats available, including shoreline areas, and the shallower protected areas of larger river provide critical spawning and rearing habitat for these species. The greater abundance of benthic organisms also provides a broader food base for a range of fish species, that in turn support the larger predatory species noted above.

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4.9.3 Biodiversity Increasingly international agencies are focusing on the effects projects have on biological diversity. This is intended to be a holistic approach that considers the plant and animal communities present, and recognizes their interdependence. It is recognized that the effects on particular species or communities can have cascading effects in other species that depend on these communities. The most common example is the relationship between plant communities, and the vertebrate communities (primarily birds and mammals, since reptiles and amphibians are absent from the Project area) that depend on them.

Typical of arctic environments, biodiversity in the Project area is greatly reduced relative to more temperate areas. The limited food resources, the harsh climate, and the mountainous terrain all serve to reduce available habitats such that only a few species, with relatively low local populations, can take advantage of the local habitats. As a result, these environments are usually less resilient to disturbances, and often take much longer time periods to recover than in more temperate climates. As noted, vegetation communities can take decades to recover from disturbances, with the result that terrestrial wildlife communities can only become established once the vegetation communities they depend on have recovered.

The vegetation communities are sparsely distributed, and generally consist of the same limited number of species. The major difference in the community types is the relative proportion that is comprised of a particular species. Vegetation biodiversity is also limited by the nature of the terrain and the climate. The steep rocky slopes that are subject to movement have limited vegetation communities, which in turn will provide limited habitat for ground- nesting birds and small mammals. The species recorded or observed in the Project area are limited to common species: no rare, threatened or endangered species were either recorded previously or observed during field investigations at the Project site. The field observations indicated populations of birds and mammals are sparse, and limited to the more productive habitats in the river valleys.

The greater diversity and density of vegetation in the river valleys in turn can support a larger range of terrestrial species, and most of the bird and small mammal observations were made in these areas. However, even in these areas, population density is limited by the resources available, and the area supports relatively few individuals.

Similarly, the low nutrient availability, season flows, and cold temperatures of the local aquatic environments limit the biodiversity in area streams and rivers. Benthic organisms are reduced in both density and diversity, and as a result of the reduced food base, fish communities contain a fraction of the species that would be encountered in more temperate regions. As a result, these environments are also highly susceptible to disturbances.

The higher elevations in the Project area have resulted in mainly barren rocky slopes, with small, intermittently flowing streams. As a result, habitats are poor, and diversity of species is limited. Most of the wildlife observed in the area would find suitable habitat elsewhere, and the Project area likely represents only marginal foraging areas within their larger habitat ranges. Few species are likely to nest or den in the Project area due to the limited habitats available. Similarly, diversity in local watercourses is very limited due to the seasonal nature of these streams. Fish would not be able to find permanent habitat, and may only occasionally forage upstream in the Project area. Benthos is characterize by low diversity, and is restricted to those species able to burrow into the substrate during periods of no flow.

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4.10 Protected Areas and Areas of Natural Significance Based on information from the Anadyr Regional Government of the Chukotka Autonomous Okrug (VNII-1 2011), there are no protected areas or areas of natural significance in the Project area. The nearest protected area is Wrangel Island, which is located approximately 500 km from the site.

A number of wildlife reserves are located within the Anadyr, Bilibino and Chaun regions, and include:  Lebediny State Wildlife Reserve: located in the Anadyr region, approximately 370 km south of the site along the Anadyr River. The reserve was established primarily to protect the nesting areas of whooping cranes (Grus americana) and other rare, threatened and endangered species in the area;  Tundrovy State Wildlife Reserve: located in the Anadyr Region along the Velikaya River, approximately 430 km southeast of the Project site. The reserve was established mainly to protect the nesting areas of rare, threatened or endangered avian species such as the little brown crane (Grus canadensis);  Ust-Tanyurersky State Wildlife Reserve: located in the Anadyr Region downstream of the Anadyr, Tanyurer and Oltyan River near Krasnoye Lake, approximately 370 km southeast of the Project area. The reserve was established mainly to protect rare, threatened or endangered species, including the little brown crane;  Teyukuul-Tanyurersky State Wildlife Reserve: located in the Chaun Region on the east coast of Chaun Bay, approximately 200 km northeast of the Project area. The reserve was established to protect nesting grounds o f a large number of species of waterfowl and shore birds; and  Omolon State Wildlife Reserve; located in Bilibino Region on the Omolon River, approximately 430 km west of the Project area. The reserve was established mainly to protect populations of moose and other mammals.

Areas of natural significance have been established to protect rare and unique natural areas. The designation of these areas can be based on a number of features, such as vegetation communities, geological formations, and historical sites. The areas of natural significance closest to the Project area are provided in Table 4.10-1.

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Table 4.10-1: Areas of Natural Significance Distance and Direction Area of Natural Origin and Protection Location from the Dvoinoye Significance Significance Mine Site The Anadyr Area Geological formation – a Elylylytgyn in the Obrutchev About 100 km to the north- Elylylytgyn vast meteorite crater filled Mountains east with water Estuarine interstream area of the Tnekveem and the Botanic formation: poplar- About 400 km to the south- Tnekveem Roscha Kytepnayveem Rivers, in the chosenia grove east downstream course of the Kanchalan River Pekulneysky In the interstream area of the Botanic formation: About 300 km to the south- Pekulneyveem and the mountainous-tundra flora east Vesnovannaya Rivers in the with relict vegetation catch basin of the Tanyurer River, the southern ridge of the Pekulney Range The Bilibino Area Aniuyskiy The Bolshoi Aniuy River basin Geological formation: About 150 km to the west recent extinct volcano Rauchuagytgyn Lake in the upstream area of the Geological formation: About 70 km to the north Rauchua River mountainous glacial lake The Chaun Area Utiny Near the Krasnoarmeisky village Zoological formation: a About 250 km to the north- community of rare east swimming birds Ayonsky The western part of the Ayon Botanic formation: relict About 270 km to the north- island steps west Rautansky Rautan Island Botanic formation: endemic About 230 km to the north and relict tundra flora representatives Pineyveemsky The upstream area of the Botanic formation: relict About 100 km to the north Pineyveem and the Kremyanka steps Geological formation: Rivers to the Chaun Bay ornamental stones placers.

The information presented above demonstrates that there are no significant natural areas that would be affected by Project activities. 4.11 Socio-economic Environment The majority of information presented in Section 4.11 has been summarized from previous reports, primarily those develop by DNV and Hatch. Detailed information on the existing socio-economic conditions in the Project’s area of influence is in the “Assessment of Social Impacts Associated with the Development of the Dvoinoye Deposit by

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CJSC CMCC” (DNV, 2011). The key aspects of the socio-economic environment are reformatted here and presented to fit with the Golder ESIA methodology. 4.11.1 Socio-economic Baseline Methodology DNV’s research included a review of quantitative data on socio-economic indicators from the municipal districts and the District, primarily the State Statistics Committee and data from departments from the period of 2007 – 2010. DNV also conducted interviews and collected information though questionnaires.

Primary research for the DNV studies was conducted over a three-week period in October – November 2010. That research included:  Stakeholder perceptions of Kinross throughout the region;  Analysis of the Kupol Fund;  Analysis of the Kupol Fund results;  Collection of baseline materials for the Dvoinoye Project; and  Identification of stakeholder ideas to further promote sustainable development in Chukotka (DNV, 2010). The research included informant interviews with government officials at the regional and all three municipal districts considered closest to the Dvoinoye area of influence.

Surveys were conducted with 65 Project stakeholders in Anadyr, Pevek, Bilibino and Illirney, the closest settlement to the Dvoinoye Project.

Additional information has been collected through public consultation with key stakeholders in April and August 2012, again in the key settlements closest to the Dvoinoye Project. These meetings integrated the wider Kinross annual presentations with specific presentations and consultations around the Dvoinoye Project. 4.11.2 National Overview In 2011, the United National Development Program (UNDP) in Russian published a report on National Human Development Report 2011 for the Russian Federation. The report uses a Human Development Index (HDI) that is similar to the HDI used annually by the UNDP in its annual Human Development Report of all countries. The Russian reports uses an average of three indices: life expectancy (based on life expectancy at birth), education (consisting of the adult literacy rate and gross enrolment ration) and income (based on GDP per capita), to compare regions for key human development indicators (UNDP, 2011B).

The HDI values can range between 0 and 1, with the lower limit for “developed” countries being 0.80 (UNDP, 2011B). Table 4.11-1 compares Chukotka with the other regions of the Russian Far East.

In the global report for 2011, Russia is ranked 66 out of 179 countries assessed and it in the “high human development” quartile1, the second quartile of the index (UNDP, 2011A).

1 Countries fall into one of four quartiles: “Very High”, “High”, “Medium” and “Low” Human Development.

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Table 4.11-1: HDI Index for Russian Federal Subjects of the Russian Far East Region GDP per Life Education (National capita, USD expectancy Literacy Enrolment HDI 2009 Ranking) at PPP2 at birth (Age 7 – 24) Sakhalin (5) 43,462 64.83 99.4 0.673 0.855 Russia (Avg.) 18,869 68.67 99.4 0.766 0.840 Sakha (8) 21,159 66.45 99.0 0.786 0.826 Magadan (30) 16,748 64.06 99.6 0.845 0.817 Chukotka (43) 39,220 58.22 99.4 0.642 0.809 Khabarovsk 12,320 66.33 99.5 0.768 0.804 (51) Primorie (52) 12,574 66.72 99.5 0.736 0.804 Kamchatka (58) 12,931 66.06 99.7 0.696 0.798 Amur (68) 13,115 64.41 99.3 0.707 0.789 Jewish (78) 9,849 63.34 99.1 0.657 0.762 Source: UNDP, 2011B

The Republic of Tuva is the region of Russia with the lowest HDI ranking at 0.730. The rankings show that Chukotka falls near the middle of the index. Despite relatively high levels of income, it has the lowest life expectancy at birth. The Russian HDI as a whole shows general improvement since 2009. Only six regions that suffered severe industrial recessions from the financial crisis have experienced a decline in the HDI (UNDP 2011B). None of these regions are in the Russian Far East.

4.11.3 Politics and governance Chukotka Autonomous Okrug/District (ChAO or Chukotka) is one of 83 federal subjects in the Russian Federation and is part of the Russian Far East, the largest of eight federal districts. ChAO borders the Republic of Sakha (Yakutia), Magadan Region and the Kamchatka Territory.

Chukotka is divided into 6 municipal districts, 50 settlements (3 towns, 9 urban and 38 rural settlements). The district center is the city of Anadyr. ChAO area is 721.5 thousand sq. km. In the last four years, the number of municipal districts has decreased as the former Beringovsky district was integrated in the Anadyr district in the south; the Schmidt district was combined with the Iultin district in the north.

The ChAO Duma, comprised or 12 elected deputies that serve five-year terms, maintains legislative authority. Executive power is held by the Governor who is an appointed by the Russian President and confirmed by the legislative authority. Roman Kopin has served as the Governor of Chukotka and the Chairman of the Government since 2008.

2 Purchasing Power Parity (PPP) is a method of economic analysis that equates the price of a basket of identically traded goods and services in two countries and allowing for a comparison between countries with different currencies.

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Municipal districts are managed by local Representatives, the Head of the Municipality and the local Administration. Key functions are carried out by the following departments:  Department of Agricultural Policy and Environmental Management: responsible for environmental protection and natural resources management;  Department of Social Policy: responsible for social security, social protection, health care and employment;  Department of Industrial Policy, Transport, Housing and Utilities: responsible management of industry, transport, fuel and energy sector, housing and utilities; and  Department of Education and Youth Policy: responsible for education and youth. Indigenous groups in ChAO have formal participation in national and regional government. At the national level, there is a Committee on Affairs of the Northern and Indigenous Peoples under the Russian Federation Council. At the ChAO level, there is a Department for Affairs of Northern Indigenous Peoples under the Office of the Governor and the Government of Chukotka. This regional department has experts working in all administrative aspects of ChAO. The Decree of the Governor of the Chukotka Autonomous Okrug (December 25, 2002. No. 90) established the Council of Indigenous Peoples Representatives under the Government of Chukotka. This decree recommends that all heads of municipal districts to create a Council of indigenous peoples under the local governments (DNV, 2011).

The mine component of the Project is located in the Chaunsky district of the Chukotka Autonomous Okrug, approximately 130 km southeast of the Town of Bilibino and approximately 260 km southwest of the Town of Pevek. Associated facilities will be located in the Bilibinskiy and Anadyr districts. The closest settlement to the mine is Ilirney in the Bilibinskiy district, which is approximately 70 km from the mine site to the southwest.

The climate is harsh in the Chaunsky district, as much of the region, with snow covering the ground for up to 8.5 months a year. The entire territory of the region is covered with permafrost. The terrain is mountainous, 75% of the territory is tundra and wooded tundra.

Table 4.11-2 summarizes the three municipal districts by size, capital and population. Table 4.11-2: Municipal Districts Municipality Geographical Size Municipality Center Population (2010) Chaun 67.1 thousand km2 Pevek 4,959 Anadyr 287.5 thousand km2 Anadyr 10,445 Bilibino 174.7 thousand km2 Bilibino 7,692

4.11.4 Economics Chukotka’s economy is highly concentrated in primary recourse extraction, including mining. Other key sectors are energy and power and agriculture. Chukotka's export articles include coal, gold, silver, platinum, tin and tungsten concentrates, scrap metal, fish, eggs, hides and skins and meat. Because of the harsh climate, the region must import virtually all industrial supplies and consumer goods (DNV, 2011).

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ChAO’s revenues have varied over the last ten years from 8.5 billion rubles in 2003, down to 3.7 billion rubles in 2007. By 2009, increases in income tax and corporate income tax lifted revenues to 11.1 billion rubles (DNV, 2011).

In 2009, the main sector of industrial production was mining, which accounted for 84%, 6.1% more than the previous year. By contract, power accounts for 15.1% (DNV, 2011).

The overall volume of agricultural production in the district increased 24.8% from 2008 to 2009, for a total 616.5 million rubles. There are 32 companies in ChAO engaged in agriculture. In addition to traditional trades like reindeer herding and sealing, companies are engaged in poultry farming, fur, pig and dairy farming, fisheries, food processing and the production of greenhouse vegetables.

Incomes in Chukotka are relatively high in comparison with other regions of Russia, but high cost of goods, which is linked with high transportation costs, means that living standards are reportedly not better (DNV, 2011).

Official unemployment is low, 1.8% in the Chaunsky district, but, as with many low populated areas of the former Soviet Union, may not reflect actual figures. Statistics from the ChAO authorities listed totally unemployment in the region at 2.1% in October of 2012. (ChAO, 2012).

There has been a generally positive trend in the reduction of residents with incomes below the subsistence level. DNV cite the figure as 9.3% of the population in 2009 (DNV, 2011), while Hatch put the figure at 11.3%, having decreased from 32.8% in 2001 (Hatch, 2011).

Chukotka is a region with the weaker small business development in comparison with other regions Russia. Businesses are completely dependent on an expensive supply chain system to the northern territories. The cost of the delivered raw materials and seasonal dependence of shipments significantly increase the costs of any production. Poor transportation network within Chukotka has also negatively impacted small and medium enterprise development (DNV, 2011). 4.11.4.1 Chaun Municipality The economy of the Chaun Municipality is based primarily on the mining of precious metals. The extractive industry makes up 70% of the total industrial output. This does not yet take into consideration two fields in development; Maiskoye and Dvoinoye. Placer gold is also mined in some rivers in the municipality. In 2010, there were 47 enterprises registered, most of which are engaged in mining ore, precious metals, construction and transport services (DNV, 2011).

In agriculture, the main economically productive areas are reindeer herding, fishing and sealing. Since 2004, the single agricultural enterprise, Municipal Enterprise Farming Unit “Chaunskoye”, which is active in herding and fishing, including processing, has been operating in the region. The volume of caribou has increased from just over 4,000 in 2004 almost 30,000 in 2010. The company employs five reindeer crews. According to DNV interviews with authorities, challenges in the sector include low wages, wore equipment, poor supply of navigators and radios and the long distance from the processing facilities (DNV, 2011).

Employment levels are high. In 2009, statistics indicated that 98.2% of the 4,541 economically active people were employed. Personal incomes averaged approximately 42,000 roubles ($1,340) per month. Income in organisations linked to mining are 60% higher than this average. Agricultural jobs, by contrast are 3.5 times lower (DNV, 2011).

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While the area has seen a general growth in wages, high prices for goods and services make comparisons difficult with other regions. 4.11.4.2 Anadyr Municipality Like the Chaun Municipality, Anadyr is also dominated by mining, particularly gold and silver extraction. The region also relies on the development of the Bering coal basin, in particular the exploration of coking coal. Current development is being pursued by the North Pacific Coal Company. Gold and silver production includes four companies, two of which make of 90% of the total output: Chukotka Mining and Geological Company operating the Kupol deposit; and Prospectors’ Crew “Chukotka” operating the Valunistoye deposit. Other large companies include Ugolnaya Mine and Nagornaya Mine, companies extracting lignite and bituminous coal. Production covers local needs and meets some regional demand; totally production was 346 thousand tons in 2009 (DNV, 2011).

Reindeer herding and fishing play a key role in the agricultural sector.

Employment levels in 2009 indicated that 97.3% of the 4,018 economically active people were employed. Key sectors for the municipality include transport, agriculture and public administration. Personal incomes in Anadyr are highest in public administration, transport and mining. As with Chaun Municipality, the lowest level of wages is in agriculture, though agricultural wages are higher in Anadyr than other ChAO municipal districts (DNV, 2011). 4.11.4.3 Bilibino Municipality Bilibino’s economy is based on mining as well as the power industry, which includes the Bilibino Nuclear Power Plant. The area has more than 300 explored or developed deposits of placer gold and three deposits of gold ore. Key companies are the Polarnaya Zvezda and Karalveem. The region also hosts the Peschanka copper deposit. Other potential minerals include new gold, copper, tin, antimony, tungsten, mercury and coal.

Reindeer herding and fishing play a key role in the agricultural sector, as key business is the Municipal Agricultural Enterprise Ozernoye, which produces fish, wild herbs.

In 2009, 96.8% of the 5,210 economically active people were employed. Aside from mining, key sectors are power generation and distribution, utilities and social services. Average wages are approximately 10% higher than the ChAO average with the highest wages in the energy sector. Agricultural wages are four times less than the ChAO average. 4.11.5 Demographics and people The population of Chukotka is approximately 48,600 and is decreasing. The main cause of population decline is migration. This follows, though at a slower pace, the general trend as people left the area when the Soviet Union broke up. In 1989, the coastal city of Pevek was estimated to have a population of 12,900, but only 5,200 in 2006,

The bulk of the population lives in three towns (Anadyr, Bilibino, Pevek). The district center of Chukotka, Anadyr, has the largest population: 12,000 people, which is nearly a quarter of the district residents. Bilibino and Pevek have populations of 5,300 and 4,400, respectively. The closest settlement to the Project, Ilirney, has a population of 300 residents with almost 85% being from indigenous groups in the region. 4.11.6 Health The health situation in Chukotka is generally considered to be worse than other parts of Russia, a trend that is further exacerbated by a limited number of medical professionals willing to live in the remote and difficult climate

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of the region. Key causes of mortality in 2009 were circulatory diseases (46%), followed by accidents and poisonings (29%). Tuberculosis in the region (88.5 per 100 thousand) is higher than in other parts of Russia (74.2 per 100 thousand). There are 13 registered cases of HIV, but the figures have increased and are associated with migration of workers coming from other parts of the country (DNV, 2011)

Though there has been a reduction of doctors, a decreasing population has allowed the ratio of patients per doctor to remain the same. The number of health workers and medical staff has increased. Hospitals and health care facilities are reportedly sufficiently equipped. Chukotka District Hospital is the main health care institution of the Chukotka Autonomous District. It controls all municipal medical facilities in the district (DNV, 2011).

Figure 4.11-1: Russian Health Indicators in Comparison with European and Eurasian Countries3.

Source: USAID, 2010

3 The figure compares Russia with “Northern Tier” countries, Czech Republic, Hungary, Poland, Slovakia, and Slovenia, and the 27 countries that comprise the EU.

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4.11.7 Social maladies Chronic alcoholism has decreased by 25% in the last four years, but is still reported to be four times higher than the Russian average. This problem is acute among the indigenous populations as well. 4.11.8 Education The number of education institutions has decreased, reducing from 84 to 75 during the period of the DNV baseline study. The reduction is due to the closure of several pre-school and general education facilities. This has not corresponded to a reduction in the number of students, causing some strain on the educational infrastructure (DNV, 2011).

Throughout the entire ChAO, there are 16 day-care centres; four vocational schools; 10 institutions of extended education for children; one educational institution for additional vocational education (training) of specialists "Chukotka Development Institute of Education and Advanced Training"; and one institution of secondary vocational education, the Chukotka Multidisciplinary College. The College has tried to introduce new disciplines to fit with the requests and needs of businesses and other organizations in ChAO (DNV, 2011).

There were no institutions of higher education until 2011, but the government now operates a branch of the North- Eastern Federal University in Anadyr.

There is only one secondary vocational school in Chukotka, the Chukotka Multidisciplinary College. There are currently no institutions of higher education, but the government expects to open a branch of the North-Eastern Federal University in 2011. 4.11.9 Land tenure and use Land around the proposed site is not reported to be used on a regular basis. Public consultations do not reveal any traditional uses for the mine site. The single use or livelihood affected near the Project infrastructure is the herding of caribou. This activity is carried out by one herding team operating in the Chaun District. It should be noted that this is the same group identified as part of the Kupol Project and the Kinross community relations team have been in contact with the herding team since the construction of the Kupol mine. 4.11.10 Infrastructure Electric power industry of the Chukotka Autonomous District is a complex system consisting of electricity and heat generating companies, and enterprises delivering them to consumers. It includes large and small-scale power generation companies. Large power companies include the Bilibino Nuclear Power Plant, a branch of Federal State Unitary Enterprise Rosenergoatom, and Chukotenergo. All power plants operate independently of one another, with the exception of Chaun Thermal Power Plant and Bilibino Nuclear Power Plant, which are connected by a high-voltage line 110 kW to form Chaun-Bilibino power system. Small-scale power facilities include 43 diesel power plants, 48 boilers and a wind farm. Energy companies fully satisfy electric and thermal energy needs of the district consumers, and annually supply approximately 16 million kWh to the Republic of Sakha (Yakutia) (DNV, 2011)

There is no railroad in Chukotka and most transport links are by sea and air. The total length of regional roads in Chukotka Autonomous District is almost 5,000 km, of which over 3,000 km is winter roads. There is a 30.5 km- long federal road "Vehicle Access to Airport from the city of Anadyr", including a seven km crossing over the Anadyr estuary (DNV, 2011).

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Chukotka's maritime transportation system includes the ports located directly on its territory. The region has five ports: Anadyr, Bering, Pevek, Providence and Egvekinot. Standard navigation season is July to October in Pevek; May to December in Providence,; and June to November in Egvekinot, Bering and Anadyr ports (DNV, 2011).

The main transportation link in Chukotka's transport system is year-round air service providing passenger and cargo transportation within and outside the region. Chukotka airports are connected by regular routes with Moscow, Khabarovsk and Magadan, and with regional centers and national villages via local airlines. In 1996, Federal State Unitary Enterprise ChukotAvia was created based on several major Chukotka airlines. FSUE ChukotAvia incorporates 10 airports with a main airport in Anadyr, including two airports with inter-regional routes Anadyr and Pevek; Anadyr and Provideniya airports have international status (DNV, 2011). 4.11.11 Cultural Heritage and Archaeology The information presented in this section has been derived from the following sources:  VNII-1 Technical Report. Engineering Surveys and Environmental Studies for Construction of Underground Mine and Infrastructure Facilities at Dvoinoye Deposit. Magadan, March 2011. [ВНИИ-1, «Технический отчет об инженерно-экологических изысканиях по объекту «Строительство подземного рудника и объектов инфраструктуры на месторождении «Двойное», Магадан 2011.]  VNII-1 Technical Report. Engineering and Environmental Survey on the All-Weather Road Kupol-Dvoinoye- Yarakvaam. Magadan, March 2011. [ВНИИ-1 «Технический отчет об инженерно-экологических изысканиях по объекту «Круглогодичная автодорога Купол-Двойное-Яракваам», Магадан 2011г.]  VNII-1 Technical report Field Archaeological survey on Dvoinoye Mine Site and automobile access road Kupol-Yarakvaam, Magadan 2011. [ВНИИ-1 «Отчет о полевых археологических работах на участках рудника Двойной и подъездной автомобильной дороги Купол-Яракваам», Магадан 2011 г. ]

The cultural heritage investigations involved the proposed Dvoinoye mine site footprint and Dvoinoye-Kupol road alignment. The methods of investigations included:  Review of government records and previous archaeological studies;  Field reconnaissance and visual assessment of the geographic and topographic conditions within the study area to identify suitable locations for human life and activities; and  Limited field archaeological investigations, including test pitting, to identify the archaeological heritage signs. The field surveys were carried out in the locations where the review of government records and field reconnaissance suggested that there might be signs of cultural heritage. 4.11.11.1 Previous Archaeological Investigations Regional archaeological investigations were performed by the North-Eastern Research Institute of the Russian Academy of Science (Magadan) for several years starting in 1977. These investigations focused on the area around Lake Tytyl and Lake Rybnoye (Figure 15), located approximately 35 km south of the future Dvoinoye site), and were not directly associated with Kupol or Dvoinoye projects.

In post-Soviet times, when the Chukotka Mining and Geological Company started exploration and mining activities, it conducted archaeological studies specific to its mining license areas and along the access roads.

In mid 2000s, the Chukotka Mining and Geological Company conducted archaeological investigations at the Kupol deposit and along the access road from Kupol to Pevek. The research team included VNII-1, North-Eastern

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Research Institute of the Russian Academy of Science, and the Magadan Regional Museum. The investigations involved a visual reconnaissance along the winter road "Kupol" - Pevek from a helicopter travelling at the speed of 50 km/h, at elevation of 50 m above ground. The purpose of the survey was to identify landforms that appeared suitable for human living and potentially could have signs of archaeological significance. The research provided the first archaeological data in the areas that had not been studied previously.

Following the initial airborne reconnaissance, detailed archaeological surveys near Kupol site were carried out. They helped identify several cultural heritage sites that subsequently were avoided as Kupol project developed. It also helped plan future direct surveys along the winter road at potential locations of archaeological landmarks, in particular Lake Tytyl (discussed later in the text). 4.11.11.2 Dvoinoye Project Archaeological Investigations The Chukotka Mining and Geological Company retained VNII-1 and the Russian Academy of Science (its North- Eastern Research Institute in Magadan) to conduct archaeological investigations for the Dvoinoye Project. These investigations included the Dvoinoye mine site and the Dvoinoye-Kupol Road

Dvoinoye Mine Site

There are no objects of cultural heritage registered in the government records or under the state protection within the proposed Dvoinoye Mine footprint.

In 2010, Dvoinoye Mine site and additional survey along the Dvoinoye-Kupol Road was carried out. This work included walking routes and limited test pitting in places that appeared to be most suitable for human settlements and where a cultural layer was most expected.

The closest archaeological site to the Dvoinoye mine is the Rauchuvagytgyn I Late-Neolithic dwelling site on the south bank of Lake Rauchuvagytgyn, which is located 26 km to the north-west of the mine site, away from the Dvoinoye Mine activities and the Dvoinoye-Kupol Road. No impacts from the Project to this archaeological site were identified.

Archaeological reconnaissance at the Dvoinoye mine was conducted in the upstream reaches of the Dvoinoye River, at the Udobny Pass, and along upstream reaches of the Pravy Yarakvaam River (Figure 15). The reconnaissance routes were selected based on the landscape characteristics, Russian guidelines for archaeological surveys, and the field crew experience.

Visual observations confirmed the absence of soil and vegetative cover over the majority of the study area as well as the predominance of previously disturbed areas. Likewise, no sites suitable for permanent or seasonal living were found along the valley where the automobile road is proposed. Investigation of the Pravy Yarakvaam River valley revealed no evidence of temporary or permanent habitation by ancient people. There are no remainders of modern deer breeding sites in the valley.

Based on the observations, no archaeological signs were identified and it was concluded that a more thorough archaeological assessment, including the excavation of test pits, was not warranted as the area was unsuitable for human permanent residence or seasonal activity.

Dvoinoye-Kupol Road

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The proposed Dvoinoye-Kupol Road is mostly aligned with the existing winter road, which has been operated for many years. The detailed archaeological investigation focused on the proposed new road alignment sections only although the known historical sites were considered as well.

The assessment of potential impact from the road operation was conducted in 2005 as part of the Kupol studies. The purpose of the survey was to assess the anthropogenic risks and to identify archaeological sites. The results of the assessment were included in the Kupol ESIA.

In 2008, the survey was carried out around Lake Tytyl, which had some already known cultural heritage sites and was located in close proximity to the winter road route (Figure 15). As can be seen from Figure 15, there are ancient art monuments at the north-east bank of Lake Tytyl and at the confluence of the Tytylvaam River and the lake. These include the Tytylvaam II Late-Pleistocene – Earlier-Pleistocene dwellings sites and other sites dating back to Pleistocene – Holocene Ages and the Verkhnetytyl I- VI dating back to the beginning of the Holocene. Overall, there are more than 40 cultural heritage sites. Their age ranges from 10 thousand to 2.5 thousand years.

In 2009, additional archaeological work was performed on dwelling sites Verhnetytylskaya IV and Verhnetytylskaya V (Items 6 and 5, respectively on Figure 15). The areas around known archaeological sites along the new road were examined and test pits were excavated to identify cultural layers. Two pits were excavated on Utkuveem River (lake Rybnoye zone) and two pits in the mouth area of rivers Tytliutin – Tytylvaam, which flow into the lake Tytyl (Figure 15).

Examination of new road sections showed no archaeological sites within and in close proximity to the proposed road alignment, except for the dwelling site Verhnetytylskaya VI, which is situated 50 m from the proposed road alignment (Item 3 on Figure 15). 4.11.12 Indigenous peoples There are 20 different indigenous groups of the North that live in Chukotka. The largest groups are the Chukchi (75%), Eskimos (9%), Evens (8%), Chuvans (6%) and Yukagirs (1%). The largest number of representatives of indigenous community resides in Anadyr and Chukotka municipal districts (25% of the total number of indigenous peoples in Chukotka). The lowest number of indigenous community representatives resides in Chaun municipality (5% of the total number of indigenous peoples in Chukotka). Summary table showing distribution of the indigenous population in municipal districts is given below. Table 4.11-3: Number of Representatives of Indigenous Peoples in Chukotka Municipal Districts Number of northern Chukotka Autonomous Share in the total number of NIM in indigenous minorities (NIM) Okrug Municipal Districts Chukotka (%) (persons) Anadyr Municipal District 4,183 25 Bilibino Municipal District 1,805 11 Iultinsky Municipal District 1,840 11 Providence Municipal District 1,920 11 Chaun Municipal District 874 5 Chukotka Municipal District 4,237 25

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Indigenous peoples of the Russian Federation are represented by an influential non-profit organization "Russian Association of Indigenous Peoples of the North, Siberia and the Far East" (RAIPON). The association has branches in the regions where indigenous peoples reside (including Chukotka). In addition, the association has local organizations in urban areas and most of the native villages.

There is a national program entitled "Economic and Social Development of the Northern Indigenous Minorities until 2011" that continues to function. Main objectives of the program are to create conditions for the transition of indigenous peoples to sustainable development on principles of self-sufficiency and based on integrated development of traditional industries.

Most indigenous peoples are united in territorial-neighbourly and tribal communities that have a status of non-profit associations and are engaged in traditional environmental management. A distinguishing feature of such associations is that when they have a permit to fish, hunt or collect wild plants, they do not have a right to surpluses. Typically, these communities go to the tundra in groups of 15 people or so for several months (up to six months), live there with their families, pitch tents (yarangas), hunt and fish. These trips are important for the transfer of traditional experience from older to younger generations.

According to the NIM Department, 17 communities were registered in Chukotka as of 2010. Most of them (50%) are family, family-clan and clan communities, while the remaining 50% are territorial-neighbourly and NIM communities.

According to the regional government representatives in the Agriculture and Food Department, domestic reindeer in Chukotka increased from 92.5 thousand in 2000 to 197.6 thousand in 2010. This caused the regional authorities to seek better ways to bring the animals to international markets. Facilities for production of canned meat (mostly reindeer) have been commissioned in three municipal districts.

Despite the increase in numbers and advancement in processing meat for sale, the supply of reindeer products for the population is reportedly insufficient. The main buyer is Chukotoptorg (district state-owned enterprise) headquartered in Anadyr. Average price of reindeer meat is 150 roubles per kilo. Wild deer has a lower price. This often does not meet production cost.

According to local residents and the data provided by local authorities, the reindeer herding business is facing problems or low wages, high wear of equipment, poor supply of equipment (navigators, radios, etc.) and large distance from the slaughter house. There has been a downward trend in production of main livestock products reportedly due to reduction in the number of consumers. 4.11.13 Regional Economic Development Strategy Development strategy of the ChAO through 2020 aims to intensive development of the region's economy in key areas, including extractive industries and through the development of infrastructure. Development of industrial production and industrial infrastructure will focus on two key areas: resource development zones and power and transport zones. The Anadyr Industrial Zone will concentrate on oil, gas and coal while the Chaun-Bilibino Industrial Zone will be driven by extraction of precious metals. Power and transport will focus on strategic projects, including:  Construction of floating nuclear power plant in Pevek;  Construction of electric power lines Bilibino-Kupol and Komsomolskiy-Maiskoye;  Reconstruction of electric power lines Bilibino-Komsomolskoye-Pevek; and

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 Construction of roads Omolon-Bilibino-Komsomolskiy-Anadyr, Anadyr-Telekayskoe deposit-Beringovkiy (DNV, 2011).

The regional development strategy is not expected to be a major factor changing the socio-economic dynamic for the permanent population since much of the development will be based on incoming staff working on rotation (DNV, 2011). 4.12 Revisions to Kupol ESIA The Feasibility Study notes that some processing equipment upgrade will be required at Kupol to handle the throughput of additional ore from Dvoinoye. As well, the tailings management facility will need to be expanded, and ore stockpile(s) constructed. As a result of these changes, the Kupol ESIA will need to be revised. These revisions are addressed in a separate report and changes to the Kupol mine and processing facility are not addressed in this ESIA.

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5.0 ENVIRONMENTAL IMPACT ASSESSMENT METHODOLOGY The Dvoinoye Project is a complex and extensive undertaking that will occur in phases that differ in their potential interactions with the natural and socio-economic environments and in the occurrence of residual impacts. In order to focus the impact assessment, the project activities were divided into three main categories or phases:  Construction Phase, during which all of the activities associated with preparing the site and supporting infrastructure for operation of the mine, will be carried out. During this phase, decommissioning of the existing mine facilities that will not be required for the Project will be carried out. Included in this phase is construction of the all-weather road to Kupol;  Operations Phase, during which all of the activities associated with mining, ore processing and extraction of the gold will be carried out for the life of the mine. This includes underground mining activities, on-site stockpiling, and shipping of ore to Kupol; and  Closure and Post-Closure Phases, during which all of the activities required to close and stabilize the mine and associated facilities, are carried out, the activities required to monitor the effectiveness of closure are carried out, and during which the potential for long-term effects are considered.

Impact assessment methodology for the ESIA is described in this section. Environmental impact assessment addresses the physical (abiotic) components of the environment, including:  Geology and geochemistry;  Soils and soil quality;  Hydrogeology and groundwater quality;  Hydrology, surface water and sediment quality; and  Air quality, noise and vibration. While the impact assessment included predictions of changes to physical environmental components, the focus of determination of significance was generally based on the biological receptors that were subject to those changes. Numerical guidelines are readily available for many physical parameters such as water and air quality, but the significance of any exceedence lies in determination of effects on, or risks to, biological receptors or components of the environment.

Consequently, the environmental impact assessment also addresses biological resources. Many of the pathways of effect relate to changes in the physical environmental components listed above. Potential impacts may also arise from direct project-related activities such as site clearing that physically displace or alter habitat and also from indirect socio-economic factors such as increased human population density and improved access that can result in changes in exploitation of local biological resources. Biological components of the environment generally include:  Aquatic habitat (e.g., creeks and rivers);  Aquatic biota (e.g., algae, plants, invertebrates and fish);  Terrestrial habitat (e.g., described as forests, grasslands, wetlands, riparian corridors); and

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 Terrestrial biota (e.g., plants, and “wildlife” including invertebrates, amphibians, reptiles, birds and mammals). Taken together, the physical and biological impact assessments comprise the environmental impact assessment, and are used to predict any changes to the quality and availability (quantity) of resources in the study area. The process of assessing and evaluating the impacts of the project, as conducted in the following sections, is based on an integration of a number of criteria and sources of information. The process includes both an evaluation of site-specific information, in the form of empirical data from the site, modeling studies, and consultation with stakeholders and regulators, as well as a review of the broader technical and scientific literature. The latter includes the published scientific literature, impact assessments and environmental effects studies at similar sites, published Best Management Practices and professional judgement and experience. 5.1 Approach The methodology for the environmental impact analysis involved the following steps:  Identification of project and environmental interactions that could result in measurable impacts (undertaken in Section 3);  Identification of the suitable biological components that could be affected by project activities (undertaken in Section 4); and  Assessment of environmental issues and potential impacts (undertaken in Section 8). The identification of potential environmental impacts has been undertaken on the basis of the identified project activities and the likely interactions of these with the natural environment, including issues that have been identified in consultation with local communities, regulators and other stakeholders. The process recognizes that only where there is a potential interaction could there be a potential impact. 5.1.1 Identification of Project and Environment Interactions The assessment of environmental effects was performed using the following procedure:  All project activities were identified (from Chapter 3, Project Description).  An initial screening was undertaken to identify those project activities that could have an effect on, or interact with, the natural environment.

The project activities identified in the screening were assessed against existing or baseline attributes of the natural and social environment, including the physical, biological and socio-economic parameters that have been identified in the ESIA study areas.

Particular attention was given to surface and groundwater resources, and rare or endangered species. Project activities that will not interact with the environment were not considered further. 5.1.2 Selection of Biological Components for Assessment The effects on biological communities are typically addressed through consideration of changes that occur at the population level. These effects are typically manifest either through changes in habitat that render certain components of the habitat unavailable or unusable, or through potential direct effects on the organisms, such as increased lethality or reduced fecundity. Impact assessments strive to consider the effects on all of the components of the natural ecosystem. Given the large number of species that could potentially occur within the

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study area habitats, it is neither possible, nor particularly useful, to attempt to measure effects on all possible receptors. As a result, the impact assessment focuses on sensitive and locally significant species or groups of species, with the understanding that impacts on other components of the ecosystem would be similar.

Given the lack of site specific data for the biological resources in the Project area, the assessment is currently undertaken at the level of biological communities. As such, the effects assessment considers effects on the level of terrestrial plant and animal communities that could reasonably be expected to occur in the area, based on the existing data. Effects on specific biological components (e.g., particular fish species) cannot be undertaken until more detailed information is available for the site. 5.1.3 Environmental Study Areas Three areas are identified for the purpose of the environmental impact assessment: Site Study Area, Local Study Area, and Regional Study Area. The study areas are generally defined as described below. While the Site Study Area is common to all study components, the extent and shape of the Local and Regional Study Areas will differ slightly for each study component. Where the study areas differ from the generic description provided below, these are described for each study component.

Site Study Area is the area located within the Project footprint that will be directly affected by the Project. It includes:  At the Dvoinoye mine site, the footprint of the deposit, the mine infrastructure, and the associated servicing and maintenance areas and local roads.  The Dvoinoye-Kupol Road Local Study Area – the area outside the Project footprint that could be physically affected by the Project (e.g., noise and dust along the roads). The Local Study Area includes:  At the Dvoinoye mine site, the Site Study Area (as defined above) plus areas within a radius of 2 km around the Project site, and up to 5 km downstream for hydrological, water quality and aquatic biology study components (Figure 16).  The Dvoinoye-Kupol Road itself (as in the Site Study Area above) plus a 200 m buffer strip along each site. Regional Study Area For environmental technical disciplines, the Regional Study Area is defined to extend beyond the Local Area generally to a distance of up to 25 km. However, for most environmental components, impacts are not expected to extend beyond the Local Study Area. 5.1.4 Assessment of Environmental Issues and Potential Impacts A systematic and consistent approach was employed in the assessment of environmental issues and potential impacts. Proposed mitigation measures were considered in order to determine residual impacts and their net significance. The assessment of potential impacts was assessed in consideration of different categories of effect. The categories were:  Direction: The direction of an impact may be positive, neutral or negative with respect to a given issue (e.g., enhancement of a wildlife movement corridor would be classed as a positive direction, whereas habitat loss or fragmentation would be considered a negative direction).

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 Extent: The spatial area affected by the project. For the purposes of this assessment Extent was classified as: within the project footprint (i.e., the Site Study Area), within the Local Study Area, or within the Regional Study Area.  Magnitude: The amount of change in a measurable parameter or the predicted/actual level of change relative to an existing or specified condition. Magnitude was defined according to the specific nature of the impact. For the purpose of this assessment, magnitudes were classified as: low, moderate and high. The definition of magnitude differs for each study component, and is defined separately for each in this Section.  Duration: This refers to the length of time over which an environmental impact occurs. For the purpose of this assessment, duration was classified as: short term (i.e., lasting only during the construction period), medium-term (i.e., lasting the entire operational period) and long-term (i.e., extending beyond the closure of the project, sometimes in perpetuity).  Reversibility: This is an indicator of the potential for recovery of a given receptor from the impact. For the purpose of this assessment, reversibility was classified as Low for impacts that reverse to the pre-impact condition after the source of the impact is removed, Moderate for impacts that reverse to achieve 50% or greater of the pre-impact condition, and High for impacts in which a greater than 50% change occurs such that the pre-impact condition cannot be substantially achieved.

Magnitude for physical disciplines, such as hydrology, water quality and air quality is often assessed relative to existing criteria, such as regulatory guidelines. As a result, physical components, such as air quality, surface water and groundwater quality, and soils and sediment quality are assessed with respect to the environmental standards presented in Section 3.

Determination of the significance of an impact is based on an integration of the assessment measures. For example, an impact that has high magnitude, but is confined to the Site Study Area, is of short duration, and is reversible, would be considered to have low significance. In addition, significance is often modified by mitigation measures that serve to lessen the impacts, and for many of the components, these are inherent in the engineering design.

Exceedence of a regulatory criterion is not necessarily a significant effect in itself, and it does not automatically provide a measure of significance to biological receptors. Each environmental change must be interpreted according to the degree of risk of impact to the biological communities based on specific attributes of pathway, exposure and receptor characteristics, as well as the likelihood of measurable effects on populations or communities. This approach recognizes that effects at the community or population level can have much longer lasting impacts than effects on individuals. Therefore, the significance of an impact is usually assessed relative to a biological endpoint, such as effects on biological communities or human health. The determination of significance is based on the potential impacts on biological receptors, rather than the physical environment. Since the effects on physical components, such as water quality, are determined with respect to their potential biological effects (e.g., water quality guidelines have been developed with the purpose of protecting biological resources), the assessment of significance is considered within this context.

The assessment is based on the current project description, and includes all mitigation measures currently incorporated into the design. Where potentially significant impacts to the environment were identified, additional

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mitigation measures have been incorporated, where feasible, to minimize the residual impacts, which were then re-evaluated to determine the final significance of the likely impact.

The assessment was conducted with the use of tables that organized and summarized the process described above into comparable and intuitive presentations for each of the construction, operations, and closure and post- closure phases.

Assessment methods specific to each environmental component are briefly described in the following sections. Assessment measures for extent, duration, frequency and reversibility are common to each study component, and these are defined in Table 5.1-1. Measures for magnitude differ among each component and are defined separately for each component. Table 5.1-1: Assessment Measures Common to All Environmental Components Assessment Levels for Measures Measure Low Moderate High Impacts are restricted to the Impacts are confined to the local Impacts extend to the Extent Project Site. study area. regional study area. Impacts are short-term, Impacts are long-term, Impacts are medium-term, Duration limited to the construction extending many years and limited to the operations phase. phase. possibly into perpetuity. Impacts occur occasionally Impacts occur on a Frequency (once or a limited number Impacts occur regularly. continuous or near- of times). continuous basis. The receptor has the ability to The receptor has the ability The receptor has <50% return to a state that somewhat to return to an equal or ability to return to an equal reflects the original pre Reversibility improved condition; the or improved baseline disturbance condition; 50% or effects of the impact are condition; the effects of the more of the original value can fully reversible. disturbance are irreversible. be regained.

5.1.4.1 Air Quality The measured used to assess the potential air quality effects due to the Project are summarized in Table 5.1-2. Table 5.1-2: Air Quality Assessment Measures for Indicator Compounds Levels for Measures Assessment Measure Low Moderate High < 5000 µg/m3 outside CO Meets EDL outside 1.0 km Project footprint Meets EDL outside 0.5 km Maximum 24-hour buffer around Project < 3000 µg/m3 outside buffer around Project footprint Average 24-hour (annual) footprint Project footprint < 500 µg/m3 outside Project TSP Meets EDL outside 1.0 km footprint Meets EDL outside 0.5 km Maximum 24-hour buffer around Project < 150 µg/m3 outside Project buffer around Project footprint Average 24-hour (annual) footprint footprint

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Levels for Measures Assessment Measure Low Moderate High < 100 µg/m3 outside Project PM10 Meets EDL outside 1.0 km footprint Meets EDL outside 0.5 km Maximum 24-hour buffer around Project < 50 µg/m3 outside Project buffer around Project footprint Average 24-hour (annual) footprint footprint < 50 µg/m3 outside Project PM2.5 Meets EDL outside 1.0 km footprint Meets EDL outside 0.5 km Maximum 24-hour buffer around Project < 25 µg/m3 outside Project buffer around Project footprint Average 24-hour (annual) footprint footprint < 200 µg/m3 outside Project NO2 footprint Meets EDL outside 1.0 km Maximum 1-hour < 200 µg/m3 outside Project Meets EDL outside 0.5 km buffer around Project Maximum 24-hour footprint buffer around Project footprint footprint Average 24-hour (annual) < 40 µg/m3 outside Project footprint < 500 µg/m3 outside Project SO2 footprint Meets EDL outside 1.0 km Maximum 10-minute < 125 µg/m3 outside Project Meets EDL outside 0.5 km buffer around Project Maximum 24-hour footprint buffer around Project footprint footprint Average 24-hour (annual) < 50 µg/m3 outside Project footprint

Study Areas

The Site Study Area includes the Project footprint while the Local Study Area includes a 1 km buffer around the Project Site. The Regional Study Area extends outward from the 1 km buffer. 5.1.4.2 Hydrology Assessment Measures

Magnitude with respect to hydrological condition is measured as changes in flows and water levels. While changes in flows can include both low flows and high flows, typically changes in low flows are more important with respect to biological indicators, since maintenance of sufficient flows during low flow conditions is important for aquatic life. As a result, the assessment measure is based on effects on low flows. Table 5.1-3: Hydrology Assessment Measure for Magnitude Assessment Levels for Measures Measure Low Moderate High <15% change from >15% and <50% change from Magnitude >50% change from baseline baseline baseline The magnitude measure is based the understanding that if the predicted flow in a stream is less than the natural variability in the annual or monthly flow, then the expected level of effects is considered to be low. Given natural variability in stream flows, typically changes of less than 15% are not reliably measurable. Since natural variation in flows can easily exceed 15%, a change of less than 15% due to Project activities would be considered as low.

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A change of up to 50% in the flow is considered to have a moderate magnitude, while a change in monthly flow of greater than 50% is considered to be a high magnitude effect.

Study Areas

The Site Study Area includes the upper reaches of the Dvoinoye River within the mine site, and the small tributaries that drain to the Dvoinoye River. These include Oda Creek, Ametyst Creek, Rogach Creek, and Zhila Creek. Since infrastructure is also located in the valley of the Pravy Yarakvaam River, the Site Study Area includes the reaches of this river that are proximal to the site. Along the Dvoinoye-Kupol road, the Site Study Area includes the road with a 5m buffer strip on either side and any support infrastructure such as maintenance camps.

The Local Study Area for hydrology is linear, and includes the streams identified for the Site Study Area plus the Dvoinoye and Pravy Yarakvaam River for a distance of 5 km downstream of the site. Along the Dvoinoye-Kupol road, the Local Study Area includes the road and a buffer strip of 200m on either side of the road. 5.1.4.3 Hydrogeology Assessment Measures

Assessment measures for hydrogeology consider changes in groundwater quality. Since shallow groundwater occurs in isolated patches as taliks that are not interconnected into a local shallow groundwater system, groundwater quantity is not considered as an assessment measure, since the conditions under which taliks form is highly localized. For this reason also, the measures for groundwater quantity are applied to the individual taliks. Groundwater quality is assessed with respect to changes in quality relative to baseline conditions. Groundwater quality is also considered with respect to the relevant surface water quality guidelines where groundwater can express to surface. Table 5.1-4: Hydrogeology Assessment Measure for Magnitude Assessment Measure Levels for Measures Low Moderate High At or below guideline <10-times surface water >10-times surface water Magnitude (aquatic life) or baseline guideline (aquatic life). guideline (aquatic life).

Change in groundwater quality for any parameter is based on the potential for groundwater to express to surface water, and affect surface water quality. Guidelines are typically developed on the basis of conservative assumptions that incorporate safety factors for the protection of aquatic life, which is considered the most sensitive end use. Therefore, for the metals and major ions considered in this assessment, safety factors that reduce chronic exposure endpoints by 10-fold are typically used in developing aquatic life guidelines. As a result, an increase of up to 10-times the guideline value is considered to have only a moderate influence, since this could affect the most sensitive species in adjacent surface waters. Increases of more the 10-times have potential to affect other species as well, and are considered to be a high magnitude.

Study Areas

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Given the localized occurrence of groundwater taliks and the lack of interconnection with these shallow groundwater sources, only a Site Study Area is defined for hydrogeology. There are no anticipated impacts to groundwater in the Local Study Area. 5.1.4.4 Water Quality Assessment Measures

Water quality assessment measures are based on predicted changes in surface water quality relative to the applicable guidelines, and to existing water quality under baseline conditions.

Water quality guidelines are typically based on proposed uses, of which the most sensitive is the protection of aquatic life. As a result, the water quality measures used for this project are based on the Russian and international guidelines for the protection of aquatic life. Table 2.3-10 (Section 2) shows both Russian MACs for fisheries and the Canadian freshwater quality guideline for protection of aquatic life. The data indicate that Russian guidelines are, for most parameters of concern at this site, equivalent to guidelines designed for protection of aquatic life in other jurisdiction, and would be suitably protective.

Since concentrations for some parameters exceed local guidelines under baseline conditions, the changes in these parameters due to the project are assessed relative to change from baseline conditions. Given natural variability of surface waters, an increase in the concentration of any parameter of less than 10% is not considered to represent a change in water quality. Table 5.1-5: Water Quality Assessment Measure for Magnitude Assessment Levels for Measures Measure Low Moderate High At or below guideline Magnitude <10-times guideline (aquatic life) >10-times guideline (aquatic life) or baseline.

An increase of less than 10-times over the guideline is considered to represent a moderate magnitude, since guidelines include safety factors that for metals and major ions are typically in the order of 10-times a chronic effect concentration for a sensitive aquatic species (water quality guidelines for protection of aquatic life are typically based on toxicity data from chronic tests on sensitive species). An increase of less than 10-times the guideline is therefore not likely to adversely affect most aquatic life though some sensitive species may experience some chronic effects. Since an increase of greater than 10-time is likely to reflect concentrations that could result in chronic toxicity to aquatic species, an increase of greater than 10-times the guideline is considered to be of a high magnitude.

Study Areas

Site preparation and operation could affect water quality in streams within the Site Study Area that may extend into the Local Study Area. No effects are expected in the Regional Study Area, and as a result, a Regional Study Area has not been defined for water quality.

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5.1.4.5 Terrestrial Vegetation and Soils Assessment Measures

Effects on vegetation are likely to be due to direct removal of vegetation as a result of site preparation. Therefore, effects on vegetation are considered with respect to the percentage of vegetation cover affected, and the species present. The latter allows for consideration of rare, threatened or endangered species within an area.

The effects on soils are likely to be due to contamination of soils as a result of site activities. Therefore, for soils, magnitude is assessed on the basis of chemical criteria. Removal and stockpiling of soils, where these are available within the footprint would not result in changes to the chemical properties, and these soils would be suitable for site reclamation upon closure. As a result, the measures for magnitude do not include disturbance of soils. Table 5.1-6: Terrestrial Vegetation and Soils Assessment Measures for Magnitude Assessment Levels for Measures Measure Low Moderate High <20% of available habitat is 20-50% of available habitat is >50% of available habitat is Magnitude – Vegetation affected affected affected Soils meet EDCs. <10% increase from baseline for <2-times increase in potentially >2-times increase in Magnitude - Soils soils that currently exceed toxic parameters potentially toxic parameters EDCs. Some soils on the Project site currently exceed the EDCs (and Russian MACs) due to previous mining activity on site. Therefore, the assessment of magnitude is based on consideration of existing baseline conditions, as well as the environmental design limits and local Russian guidelines.

Study Areas

The Site Study Area for the vegetation and soils component consists of the actual mine and Dvoinoye-Kupol access road footprint. The Local Study Area includes the footprint and an area of 1.5 km around the mine site (defined by the study area shown on Figure 14) and a buffer strip of 200m along the Dvoinoye-Kupol road. Effects on vegetation and soils are not expected to extend beyond the Local Study Area, and a Regional Study Area has therefore not been defined. 5.1.4.6 Birds and Mammals Assessment Measures

Birds and mammals would be affected by the Project mainly through loss of available habitat, though wildlife could also be affected by vehicle interactions. Birds and mammals are not considered to be potentially exposed to sources of contamination. Seepage and leaching from stockpiles will be diverted to collection systems, and there are no proposed areas where contaminated water can collect. Other areas of potential contamination, such as fuel storage areas, are equipped with containment and any spills or leaks will be cleaned up, with little potential for exposure of wildlife.

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Table 5.1-7: Wildlife Assessment Measures for Magnitude Assessment Levels for Measures Measure Low Moderate High <20% of available habitat is 20-50% of available habitat is >50% of available habitat is Magnitude affected affected affected Studies have shown that for effects on populations to occur, >20% of the population needs to be directly impacted. The natural variability and resiliency of populations has been shown to readily compensate for effects on less than 20% of the population, and these changes do not affect the long-term survival of the population. While direct changes on populations cannot readily be measured at the site, the effects are therefore assessed on the basis of the amount of change in the available habitat, since this directly affects the survival of local populations. The approach also implicitly considers the availability of suitable habitat in the assessment. Where there is little available habitat for species, as is the case in much of the Project area, the effects on populations would be considered low.

While most species are considered generally with respect to any changes in habitat, special consideration is given to rare, threatened or endangered species.

Study Areas

The Site Study Area for the wildlife component consists of the actual mine and Dvoinoye-Kupol access road footprint. The Local Study Area includes the footprint and an area of 1.5 km around the mine site (i.e., the area in which vegetation zones have been characterized) and a buffer strip of 200m along the Dvoinoye-Kupol road. Effects on wildlife are not expected to extend beyond the Local Study Area, and a Regional Study Area has therefore not been defined. 5.1.4.7 Aquatic Biology Assessment Measures Table 5.1-8: Aquatic Life Assessment Measures for Magnitude Assessment Levels for Measures Measure Low Moderate High <20 change in 20-50 change in >50 change in density/diversity of benthos, density/diversity of benthos or density/diversity of benthos Magnitude or reduction of potential fish reduction of potential fish or reduction of potential fish habitat habitat. habitat The changes in populations of aquatic species are considered on the same basis as for terrestrial species, i.e., effects at the population level. For benthic organisms, for which local data are available, these can be assessed as a direct change in species and density of organisms. For fish species, that are not likely to be present due to the highly seasonal flow characteristics in the local streams, the assessment is based on the amount of suitable habitat that could be affected.

Study Areas

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The Site Study Area for the aquatic life component consists of those water bodies within or immediately adjacent to the actual mine and Dvoinoye-Kupol access road footprint. The Local Study Area for the mine site includes the Site Study Area and downstream reaches of the Dvoinoye and Pravy Yarakvaam River s for a distance of 5 km. The Local Study Area for the Dvoinoye-Kupol road includes any stream crossings or adjacent streams and a buffer strip of 200m downstream of any stream crossings. Effects on aquatic life are not expected to extend beyond the Local Study Area, and a Regional Study Area has therefore not been defined.

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6.0 SOCIO-ECONOMIC IMPACT ASSESSMENT METHODOLOGY Impact assessment methodology for the SIA is described in this section. As with environmental impacts, socio- economic impacts will also take into consideration construction, operations and closure stages of the project, but these phases will only be highlighted in the impact assessment when it is relevant to changes in the mitigation measures. 6.1 Socio-economic Study Areas Environmental study areas define three areas in relation to the impact assessment: Site Study Area, Local Study Area, and Regional Study Area. Socio-economic study areas are based on political and administrative divisions. There are currently no known existing settlements that will have direct site-specific or “local” impacts, such as resettlement, increased population from workers or changes to infrastructure. The direct area of influence is assumed to be an unpopulated and remote area of Chukotka. No direct impacts are expected on existing settlements and, therefore, there is no expected impact in a “local” area of influence or study area. The closest settlement is over 70 km from the mine site. However, it is also assumed that some indigenous activities may take place near the access roads. Impacts, such as the potential for economic displacement, are possible in the “regional” area of influence, which is defined as the Chukotka Region.

The baseline studies have focused on key settlements, Ilirney, Bilibino and Pevek and the municipal districts of Chaun, Anadyr and Bilibino. 6.2 Methodology The key steps in developing the socio-economic elements impact assessment are described below:  Socio-economic baseline: The basis of social analysis is the socio-economic baseline, which is complemented by consultation and discussion with those who may be affected by the Project. Information collected during the baseline study and consultation is used to identify factors that may be influencing the human environment prior to Project implementation.  Review of Project activities: Project activities that may affect the social or economic characteristics of local communities are identified.  Key Issue Identification: Key social and economic issues identified during the scoping phase of the ESIA are revised and considered with the final project activity details. The purpose is to identify the essential issues for the Project within the overall social, political and cultural context described in the baseline.  Impact Categories: The key issues are used to develop a set of impact categories that form the basis of the impact assessment. Each impact category may have a set of sub-category topics that address elements of the IFC Performance Standards and other international guidelines or issues raised during consultation.  Mitigation: Actions are developed to avoid or minimise negative impacts and maximise benefits. The interventions to minimise negative impacts and maximise positive impacts make up the social elements of the Environmental and Social Management Plan.  Residual Impacts: Residual impacts, also referred to as social significance, are the impacts predicted to occur after mitigation. The impact assessment is performed on residual impacts.

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Determination of socio-economic impact follows a different methodology than the one used for physical and biological impacts. There are, however, some similarities in the definition of attributes. The four attributes applied to the determination of socio-economic impact significance are listed and defined below in Table 6.1-1.  Direction: indicates whether the impact is positive, negative or neutral. Some impacts may have both positive and negative dimensions.  Magnitude: indicates the degree of change in a socio-economic parameter and is generally a qualitative assessment.  Geographic extent: indicates the geographic and administrative units that will be impacted. Some impacts may affect only individual households, whereas others may affect the Local Study Area (LSA), Regional Study Area (RSA), the entire country, or have a trans-boundary impact.  Duration: indicates the length of time over which an impact may occur. Duration is usually related to the Project description.

Unlike environmental impacts, social impacts will not be assessed on reversibility. Socio-economic impacts are part of an ongoing process of interdependent economic and social change. Although there are isolated exceptions, most socio-economic impacts are experienced continuously by people; thus, probability is not often a useful attribute for significance assessment. Table 6.1-1: Classification of Significance of Social Impacts Criteria Definition Positive – Impact provides a net benefit to the affected person(s). Negative – Impact results in a net loss to the affected persons(s). Direction Mixed – Impact may be positive or negative, but requires an intervention to demonstrate net benefit. Neutral – No net benefit or loss to the affected person(s). Negligible – No noticeable change anticipated. Low – Result predicted to be different from baseline conditions, but not to impair or change quality of life of the affected person(s). Magnitude Moderate – Result predicted to impair or benefit quality of life of the affected persons(s). High – Result predicted to seriously impair or substantially improve quality of life. Individual – Confined to individuals or individual households. Local – Confined to the LSA. Geographic extent Regional – Confined to the RSA. National – Extends to national level. Trans-boundary – Results impact neighboring countries in the region. Short-term – Confined to period before full operations (through 2013). Duration Medium-term – Extends through operations of the mine (until 2020). Long-term – Extends beyond the life of the mine (beyond 2020).

6.3 Social Investment The analysis of “social impact” will make a distinction between the requirement of mitigating negative impacts and philanthropic initiatives. While philanthropic initiatives are generally assumed to have a positive impact, they are

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not considered elements of the technical mining project and therefore associate impacts are not included in the impact analysis. 6.4 Monitoring and Evaluation Mitigation actions will be used to generate a set of performance indicators that are monitored regularly and evaluated at regular intervals in an iterative process. This iterative process seeks to generate feedback from potentially affected communities to continuously update and improve the ESAP. Key mitigations, and the accompanying monitoring commitments, form the basis for the socio-economic elements of the management plan.

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7.0 SOCIO-ECONOMIC IMPACT ASSESSMENT The socio-economic impacts will be positive and negative. Due to the existing Kupol mine and similarities of the two projects, as well as the overlap in stakeholders and impacts, there is evidence of some of the potential issues that will also be relevant in the expansion of the Dvoinoye Project.

Key issues and impact categories have been identified based on existing socio-economic baseline reports and review of project activities. The key issues also take into consideration elements of the IFC Performance Standards and previous stakeholder consultation, which has highlighted areas of concern or interest to interested parties near the Project site. 7.1 Key Issue Identification Key issues for the Project are related employment and resourcing skilled workers while trying to maximise local employment and procurement. The Project is located in a remote location with similar industrial facilities in the same region, so there are relatively limited new impacts due to the historical development of mining in the regional study area. However, the general area is known to be used by Indigenous Peoples and therefore adds an additional focus to ensure that the industrial development does not negatively impact rural communities and traditional livelihoods. The following are considered to be the high level, key issues for the Project:

Economic benefits: The potential for investment additional employment, procurement and tax revenues has created expectations for the success of the Project. However, a general lack of technically skilled people in local settlements will mean that many workers have to come from other regions of the country.

Indirect impacts of migrant workers: With in-coming migrant workers, particularly during the construction phase, there is the potential for indirect impacts such as usage of existing municipal infrastructure and potential health risks such as communicable diseases. The Kupol project experience suggests that the impact of migrant workers is low. Impacts from Dvoinoye Project are assessed in the next Section.

Impacts on Indigenous Peoples: Potential changes in the traditional livelihoods of Indigenous Peoples, including the potential for economic displacement or change in land management. The Kupol project experience suggests that these impacts are low. Impacts from Dvoinoye Project are assessed in the next Section. 7.2 Impact Categories The information reviewed in baseline studies and from stakeholder consultation is used to develop a set of impact categories that form the basis of the impact assessment. The categories were defined during the preliminary impact assessment and have been adjusted in consideration of the Project context.

The impact categories are:  Economy and employment;  Health, education and community safety;  Land ownership and use;  Indigenous Peoples: and  Cultural Heritage

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7.3 Economy and Employment 7.3.1 Economy and Employment – Potential Impacts (before Mitigation) Potential Project impacts on economy and employment before and after mitigation are discussed below and summarized in Table 7.3-2. Royalties, taxes and profit sharing agreements The impacts of royalties, taxes and profit Sharing are predicted to be positive to net economic contribution, which should extend throughout the operations phase of the work. Table 7.2-1 summarizes approximate tax payments for the Dvoinoye Project in total. Table 7.3-1: Total Project Tax Payments (Estimates in US $) Total Federal Regional Personal Income Tax 20,039,325 20,039,325 0 Funds Contribution4 43,985,862 43,985,862 0 Royalty 115,712,597 115,712,597 0 Property Tax 31,463,174 0 31,463,174 Other Taxes5 2,475,008 1,237,504 1,237,504 Corporate Income Tax 137,022,448 13,702,245 123,320,203 VAT 7,032,673 7,032,673 0 Total 357,731,087 201,710,206 156,020,881

Exact estimates of the technical and economic costs and payments are not available at this time, but will be quantified for disclosure.

While tax contributions are generally considered to be positive, impact can have some mixed results as seen in other projects around the world. Non-transparent payment of taxes, particularly in the extractive industries, has led to corruption and lost benefits when revenues are not paid transparently and monitored. For this reason, since 2007, the IFC has required from all its extractive industry projects to publically disclose their material payments to host governments. The risks related to tax payments account for a low-positive assessment of impact. Employment There will be new employment, which will be particularly beneficial during the construction phase when there is the need for a higher percentage of less skilled workers, and this will generate new income sources for a region with multiplier effects in employment in other sectors. Demand for employment in Northern Gold will peak in 2016 with and expected need for 680 national workers.

Employment and new jobs are generally considered a positive social impact. However, experience at similar projects show that the overall direction of impact for new employment opportunities can also have a mixed impact if not communicated in a transparent way, especially given the context of high expectations for well-paid

4 Funds include: pension fund, social insurance, medical insurance, accident insurance. 5 Other taxes include: transport tax, environmental payments, permissions.

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employment. A large influx of temporary workers can put additional strain on local communities, especially if contractors have not been informed about core labour rights and best practices.

In addition, there are inherent risks common to the development of large industrial projects. Without well- administered human resources policies, job creation can exacerbate existing social divisions and in some cases generate local conflict if job seekers do not trust that recruitment and human resource policies are fair and transparent. Assessment of impact prior to mitigation is lower – low-positive – given the need for appropriate human resource policies. Procurement of local goods and services Similar to employment, the need for local goods and services are generally considered to be a positive social impact with the additional purchasing power adding stimulus to the economy. Also in a similar way, other projects have shown that procurement can have less impact and even negative impact if the procedures are not transparent. This is particularly relevant when considering some of the barriers to small and medium enterprise development in a rural and remote location of Russia. This is particularly relevant when considering some of the barriers to small and medium enterprise development in a rural and remote location of Russia.

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7.3.2 Economy and Employment - Mitigation and Benefit Maximization Royalties, taxes and profit sharing agreements Kinross, the owner of Northern Gold, have adopted a set of 10 Principles that are used to guide all business around the world. These Principles are available in six languages, including Russian and posted on the http://www.kinrossgold.com/ and http://www.kinrossgold.ru/ websites. The Principles are guide several aspects of social impact. In relation to royalties, taxes and profit sharing, Principle 3 includes a commitment to work transparently.

Though royalties and taxes are considered positive, Northern Gold will take additional steps to fulfill the IFC requirement of reporting on all taxes and government payments, as stipulated by the Extractive Industries Transparency Initiative (EITI) and required for new extractive industry projects. Kinross has endorsed the principles and criteria of EITI. While Russia is not a candidate country, Northern Gold will support the objectives of the EITI by disclosing taxes, royalties, fees and duties paid to regional and national budgets.

Northern Gold maintains an existing external grievance mechanism. This management tool is not solely applicable to grievances related to royalties taxes and revenue payments, but rather is expected to be a mitigation measure meant to identify and capture all external grievances.

The grievance mechanism is noted in the first impact sub-category, but reporting on the external grievance mechanism is a key performance indicator for all social impact sub-categories.

Performance Indicators:  Information on all payments disclosed as part of periodic social performance reporting; and  Grievances reported as part of periodic social performance reporting. Employment Northern Gold will seek to expand its existing human resources management from the Kupol mine to cover activities of the Dvoinoye Project, as well as ensure that human resources is managed in compliance with national legislation and IFC Performance Standard 2.

Kinross has signed the United Nations Global Compact, in which four of the 10 principles are linked to labour:  Principle 3: Businesses should uphold freedom of association and effective recognition of the right to collective bargaining;  Principle 4: Businesses should support the elimination of all forms of forced and compulsory labour;  Principle 5: Businesses should support the effective abolition of child labour; and  Principle 6: Businesses should support the elimination of discrimination in respect of employment and occupation.

As part of its involvement, Kinross annually reports in English on progress toward supporting these principles. Reports have been disclosed for 2010 and 2011. The 2011 summarizes key elements related to labour: “We uphold the principle of freedom of association whereby our employees have the right to choose whether they want to belong to a union. Our Code of Business Conduct and Ethics enshrines the principles of fairness and non- discrimination for the Company, its directors, officers and employees and contractors (‘Kinross personnel’). Kinross

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has developed Supplier Conduct Guidelines articulating Kinross’ expectations for supplier conduct with respect to labour standards in accordance with the principles of the UN Global Compact” (Kinross, 2011A).

Kinross employment practices and results of local hiring are regularly reported through annual consultation. In 2011, there were positive trends in hiring more residents from the Chukotka region – 226 employees (up from 188 in 2010), as well as an increase in the number of indigenous peoples – 77 employees (up from 57 in 2010).

In July 2011, Kinross developed a formal recruitment policy that includes guarantees fair equitable and transparent recruitment. The policy also ensures the principle of non-discrimination and that compensation and benefits are based on transparently levels and policies. The policy explicitly forbids questions on the following topics during interviews: nationality and country of origin; religion; political affiliations; age; marital and family status; health and physical abilities; and criminal background (Kinross, 2011B).

The recruitment policy requires that all positions be based on clear job descriptions that are agreed in writing as per Russian legislation. The human resources department receives and stores all applications and only those that have been correctly logged may be considered for interviews. The recruitment policy commits the human resources department to be a part of all presentation and negotiations of compensation and benefits (Kinross, 2011B).

Worker inductions require that all employees review and sign off on key company human resource documents, including:  Company regulations;  Introductory safety instructions;  Job descriptions;  Health and safety instructions for a specific work place;  Pay and bonus regulation;  Rules of conduct;  Whistle blower policy;  Code of business conduct and ethics; and  Disclosure, confidentiality and insider trading policy (Kinross, 2011B). In addition to the policies and procedures listed above, Northern Gold will develop a formal worker grievance will be established and explained to all workers upon hire. Grievances will be reported in periodic disclosure of social performance, but ensure anonymity it protected in the disclosure process.

Given the risk of a lack of employment protection among contractors, Northern Gold has incorporated requirements for all contractors in its Occupational Health and Safety Plan for Construction. The plan states that Northern Gold duty to take reasonable precautions to protect all workers also covers non-employee or the employees of contractors. The plan also outlines requirements for tendering, rights and responsibilities of the contractor and procedures for health and safety violations.

Northern Gold will use commercially reasonable efforts to inform contractors about the requirements in Performance Standard 2. These efforts will include information about PS 2 labour and working conditions in tender

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documents and contacts. This information will inform contractors of their responsibilities to fulfill national requirements, as well as relevant requirements related to IFC Performance Standard 2.

Performance Indicators:  Continued disclosure and reporting against United Nations Global Compact labour principles;  Human resources statistics reported as part of periodic social performance reporting;  Worker grievance mechanism approved;  Worker grievances reported as part of periodic social performance reporting; and  Tender documents and contracts for contractors to include references to contractor responsibilities in relation to IFC Performance Requirement 2. Procurement of local goods and services Northern Gold makes an all efforts to purchase goods and services locally. To improve the efficiency and transparency, tenders are disclosed in advance. As part of its 10 Principles, Northern Gold, as feasible, tenders contracts to local and regionally-based businesses to foster sustainable local economic activity.

The corporate commitment to purchase locally increases the positive impact of procurement.

Performance Indicators:  Procurement contracts awarded to businesses based in Chukotka reported as part of periodic social performance reporting. Table 7.3-2: Impact Assessment - Economy and Employment Impact Assessment Criteria Assessed Impact Impact Before Category Direction Magnitude Extent Duration Residual Mitigation Royalties Medium- Low Moderate Positive Moderate Regional and taxes term (Positive) (Positive) Medium- Low Moderate Employment Positive Moderate Regional term (Positive) (Positive) Medium- Low Moderate Procurement Positive Moderate Regional term (Positive) (Positive) Medium- Moderate Low Inflation Negative Moderate Regional term (Negative) (Negative) Impacts listed in the table above indicate the potential impacts (before mitigation) and residual impacts after consideration of the Northern Gold mitigation or benefit enhancement actions. 7.4 Health, Education and Community Safety Potential Project impacts on Health, Education and Community Safety before and after mitigation are discussed below and summarized in Table 7.4-1.

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7.4.1 Health, Education and Community Safety – Potential Impacts (before Mitigation) Health and education The general nature of expanding the mine and associated facilities in a sparsely populated location will mean that there is limited impact on health and education. The development of such projects is usually associated with an improvement in health and education as there is an increase in tax contributions and overall economic activity in the local and regional area, but such impact are considered to be low. Migration Baseline conditions indicate that Chukotka has seen an outflow of residents overall. Given the changes to the region since the end of the Soviet Union, these movements are expected. There is neither a positive or negative impact linked to general population movements.

Migration and associated indirect impacts are complex and are linked to an in-flux of workers, especially during construction if there are workers from other parts of Russia or abroad. Planned well, the arrival of new workers has relatively small or unnoticeable impacts. Community safety and security The interaction between security employees and local residents can often be the most frequent interaction between the Project and local communities. Failure to link security services with the wider community liaison work can lead to misunderstandings, provision of misinformation and strained relations with local residents.

Contact with local residents is expected to be limited given that the closest settlement is 70 km from the mine. However, security staff should be familiar with procedures for dealing with local residents and provide sufficient information so that Project-affected stakeholders can effectively address questions and grievances to the appropriate department.

The Dvoinoye site can be accessed by vehicle during the summer from Bilibino and Pevek and that improving the transportation may cause increased access and traffic from third parties. Such access may indirectly cause exploitation of sensitive natural resources or further threaten traditional livelihoods.

The construction of the all-weather road to Kupol will create increased traffic in an area that is inherently isolated. There are no statistics on road safety and no immediate concerns related to the road raised by stakeholders. However, the increased traffic is assumed to have a potentially negative impact without appropriate mitigation measures as rural communities are not accustomed to heavy traffic. 7.4.2 Health, Education and Community Safety - Mitigation and Benefit Maximization Health and education Impact on health and education is not expected aside from indirect and positive contributions from taxes and improved employment opportunities.

Performance Indicators:  No additional performance indicators applicable.

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Migration Migration impacts will be limited through recruitment programs that aim to attract locals, reducing the impacts of large numbers of outside workers. There are not expected to be any impacts resulting from an in-flux of workers moving into any existing settlements. Those employees coming from farther away or outside Chukotka will be housed in an isolated camp near the Dvoinoye mine site. The accommodation complex will have the capacity for 356 people and provide all accommodation requirements on site. Personnel will be transported to the site by helicopter or, as possible, on the all-season road once constructed. (Hatch, 2012). Settlements closest to the worker accommodation are not expected to experience any changes and consultation with stakeholders has not identified any negative impacts related to worker in-flux from the similar arrangements at the Kupol facilities.

Performance Indicators:  No additional performance indicators applicable. Community safety and security A private security company, Wolf White, is responsible for security services for Kinross Far East, which will include the Dvoinoye Project. The contractor is supervised by the Kinross regional security manager. Existing security programs for the region are being updated to include site specifics and continuous monitoring, evaluation and improvements (Hatch, 2012).

Guard detachments are located at the:  Kupol mine;  Dvoinoye deposit;  21 km (Pevek);  Yarakvaam road camp; and  Truck shop and logistics Department in Magadan (Berzina St. 12а). At a corporate level, Kinross have aligned its company with the objectives of the Voluntary Principles on Security and Human Rights and has developed its own Human Rights Adherence and Verification Program (HRA & VP). This Program was developed in 2010 and was implemented at all operating sites. Training on the HRA & VP has been given to security personal with guidance on allegation reporting and verification, investigation and resolution, and monitoring of investigations conducted by public officials (Kinross, 2012).

Additional training for security will take place on an annual basis with information on the training results included in social performance reporting. Training for security personal will include information about the grievance mechanism to encourage the use of the community relations management tool.

Existing Kupol security systems have been developed for this operation and take into account some of the key risks:  Company personnel travelling via Moscow airports;  Criminal actions against company employees while in Magadan;  Theft on site;

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 Fuel theft;  Theft of high grade ore;  Poaching of wild caribou;  Presence of armed individuals;  Soft drugs and smoking blends; and  Violation of the site firearms policy (Hatch, 2012). With these elements being taking into consideration in the expansion of the Kupol security systems, and taking into account the isolation of the Dvoinoye Project site, negative community impacts are considered to be low. Having had a grievance mechanisms in place for over five years, there are no instances of stakeholder complaints in relation to community safety and security.

Performance Indicators:  Updates on security personnel arrangements included in periodic social performance reporting;  Information on security training program included in periodic social performance reporting.

Table 7.4-1: Impact Assessment - Health, Education and Community Safety Impact Assessment Criteria Assessed Impact Impact Before Category Direction Magnitude Extent Duration Residual Mitigation Health and Low Low Positive Low Regional Medium-term education (Positive) (Positive) Medium Low Migration Negative Low Regional Short-term (Negative) (Negative) Community Medium Low safety and Negative Low Regional Medium-term (Negative) (Negative) security Impacts listed in the table above indicate the potential impacts (before mitigation) and residual impacts after consideration of the Northern Gold mitigation or benefit enhancement actions. 7.5 Land Ownership and Use Potential Project impacts on Land Ownership and Use before and after mitigation are discussed below and summarized in Table 7.5-1. 7.5.1 Land Ownership and Use – Potential Impacts (before Mitigation) Physical displacement No physical displacement is expected. All land is owned by the government. Economic displacement The Dvoinoye site is inaccessible to almost all activities that have an economic value and benefit to local settlements. The only potential impact through the periodic contact with herding activities could be on herders’

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nomadic routes in Kupol-Dvoinoye road area. Such affects are linked to a herding crew working in the Chaun district with a total influence on 25 individuals. 7.5.1 Land Ownership and Use - Mitigation and Benefit Maximization Physical displacement No physical displacement is expected.

Performance Indicators:  No additional performance indicators applicable. Economic displacement Since July 2011, Northern Gold has sought to mitigate any potential negative impact with the herders near the Dvoinoye site by establishing regular communication and inviting the group to contact the company in the case of previously unanticipated impacts.

As a part of social program to support traditional lifestyle of reindeer herders’ group closest to the mine location, Northern Gold provides fuel, household goods and other supplies. These supplies are formalized in a Community Action Plan. From July to December 2011, assistance to the herding crew amounted to approximately $3,400. Assistance will continue through the life of the mine project and members of the herding crew will also be eligible for additional assistance provided through the expansion of the Kupol Fund, explained in more detail below.

Performance Indicators:  Community Action Plan summarized and disclosed in periodic social performance reporting. Table 7.5-1: Impact Assessment - Land Ownership and Use Impact Assessment Criteria Assessed Impact Impact Before Category Direction Magnitude Extent Duration Residual Mitigation Physical Not Applicable displacement Economic Not Applicable displacement Impacts listed in the table above indicate the potential impacts (before mitigation) and residual impacts after consideration of the Northern Gold mitigation or benefit enhancement actions. 7.6 Indigenous Peoples Impacts on Indigenous Peoples, including changes to traditional livelihoods, are considered to be social impacts of the Project. However, changes to traditional livelihoods that are linked to the broader shift toward industrial activity cannot be identified as a single impact or set of impacts that lead to corresponding mitigation measures that aim to stop the shift. Consultation with project affected indigenous groups has highlighted that some individuals are reluctant to go back to traditional livelihoods once they have worked in salaried positions with larger industries. Like all residents of Chukotka, traditional settlements and residents consulted throughout the development of the Kupol and Dvoinoye Projects have similar aspirations to other residents in the region – employment, better infrastructure and socio-economic conditions. Northern Gold respects individual choices that might move away from traditional livelihoods, but it also recognizes the long-term value of supporting and preserving indigenous values and customs.

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Kinross highlights the importance of respecting human rights in its Ten Guiding Principles for Corporate Responsibility. Principle six states: “conduct all of our activities in accordance with accepted standards in the protection and promotion of human rights. We respect the cultural and historical perspectives and rights of those affected by our operations, in particular indigenous peoples”. Northern Gold, as a Kinross subsidiary, adheres to this Principle. In seeking to comply with corporate and international standards on working with indigenous peoples, Kinross has created a formal and participatory program for socio-economic development through the Kupol Fund. The Kupol Fund, created in 2009, works directly with the indigenous peoples communities to encourage their self- determination and development, as one of the aspects required by the IFC in Projects that impact upon indigenous peoples and their traditional livelihoods.

The purpose of this section is to provide details on the Kupol Fund and its management. While the Kupol Fund is not solely aimed at indigenous groups, support for and preservation of indigenous values and customs is a core component. No specific impacts are described in this section, though relevant performance indicators will be included.

All activities related management of impacts related to indigenous peoples has been based on early baseline analysis and continued consultation with potentially affected groups. Consultation includes liaising with government officials, NGOs and the 17 formally registered communities.

The main objective of the Kupol Fund is to promote and support the sustainable socio-economic development of the Chukotka Region through four program areas:  Traditions of indigenous peoples from the North, Siberia and Far East, Including methods for traditional land use;  Health;  Education and training; and  Sustainable development of small and medium enterprises. The Kupol Fund is registered as a non-profit organization and it provides it full charter on the http://www.kinrossgold.ru website, which provides information on the full structure and details on roles and responsibilities in the oversight and management of the Kupol Fund. Management is organized in three primary entities, the Board of Trustees, an Executive Director and a Commission for Competition related to projects and other initiatives. The terms and guidelines for each entity are included in the charter. All management positions are publically disclosed and the organizational structure has participation and oversight from government and civil society members, as well as a majority of positions filled by leaders of from indigenous peoples communities and the major organizations representing their interests in the region.

Development assistance is provided through competitive grants for financial support. Information on how the competitions are conducted is also publically disclosed. Competitions operated on clear criteria:  Social significance of the problem a project seeks to address, which is determined by the applicant;  Social significance of the results or impacts of the proposed project;  Long-term expected results from the implementation of the project;  Practicality; and

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 Economic justification and clarity of the budget. Information online includes a packet of information needed for any applicant to participate in the competitions, including information on writing the budget and a checklist of legal information needed to take part and receive funds.

Reporting on all projects is provided online. This reporting includes a list of projects supported prior to the formal establishment of the Kupol Fund in 2009. Online reporting includes a list of project, financial information and long- form version of activities for the year. All documents are in PDF and downloadable for interested stakeholders.

Public participation in the on-going management of the Kupol Fund is linked to the continuation of stakeholder engagement activities. At a minimum, Northern Gold managers conduct at least one formal public hearing a year to talk about the Fund and its performance. This annual hearing is complemented by on-going stakeholder involvement related to the management of the Kupol Fund. Such stakeholder involvement aims to build capacity and encourage community ownership. All disclosure meetings include information on the grievance mechanism and clear details of key managers responsible for the acceptance and processing of grievances.

Performance Indicators:  Continued reporting on all management of the Kupol Fund; and  Continued reporting on competitions, projects selected and financial information associated with implementation of project. 7.7 Cultural Heritage Impacts on cultural heritage are linked with changes in traditional ways of life, but can also be related to changes from a relatively remote and rural area to one that relies more heavily on natural resource extraction.

No existing negative impacts have been identified.

As noted in Section 4.11, the known archaeological sites along the Dvoinoye-Kupol Road alignment have been avoided by re-routing the road around these sites. The Chukotka authorities responsible for the cultural heritage preservation have approved the Dvoinoye Project activities at the mine site and along the Dvoinoye-Kupol Road under two conditions (Department of Education, 2012):

1) No traffic is allowed across the Verhnetytylskaya VI heritage site. The protective measure should include, but not be limited to, the installation of warning signs. 2) A chance find procedure should be implemented for the event any archaeological objects are found during construction or operation of the road.

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8.0 ENVIRONMENTAL IMPACT ASSESSMENT Potential environmental impacts are discussed in this section. The impact assessment includes three project phases:  Construction (summarized in Table 8.5-1)  Operations (summarized in Table 8.5-2), and  Closure and post-closure (summarized in Table 8.5-3). The impact assessment has relied entirely upon third parties for the project description and baseline characterization. Golder has not field verified the information provided by others. 8.1 Key Issue Identification The key environmental issues have been identified based on the existing baseline environmental data and the project description.

The key issues are related to water, air, permafrost, and biological resources, in particular:  Water quality and quantity, discharges and seepage from the temporary waste rock dump and ore stockpile, and storm water runoff from disturbed areas, effects of re-routing the upper Dvoinoye River around the West Pit;  Groundwater quality and flow (quantity) from mining and infrastructure footprint;  Loss of physical habitat (aquatic and terrestrial) due to project footprint;  Effects on aquatic life from mining activities, including storm water runoff, seepage from temporary stockpiles, and discharge of domestic sewage;  Disruption of wildlife in the larger local area (e.g., 2 km radius around the Mine Area);  Permafrost, soil erosion, and slope stability;  Air quality and noise due to ore processing, dust from vehicles and blasting, vehicle and equipment operation; and  Effects of the Dvoinoye-Kupol road on vegetation, wildlife, water quality and aquatic life. While particular attention has been paid to these, the impact assessment has considered all possible sources of impact, and the assessment is not limited to the issues identified above.

A key aspect of environmental impact assessments is consideration of the effects of a project on the biodiversity of an area (ICMM 2006). Many of the potential impacts of the Project assessed in this section relate specifically to impacts on biodiversity. Biodiversity impacts that are assessed include:  Direct loss of terrestrial and/or aquatic habitat from Project infrastructure;  Effects of erosion and sedimentation on quality of aquatic habitats;

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 Toxic effects on terrestrial and aquatic life from chemicals, solvents, fuels, and seepage from waste rock facilities;  Effects of dust and noise on habitat quality and species use of habitats (e.g., disturbance); and  Direct loss of individuals through road accidents and hunting or fishing. The intent of the biodiversity assessment is to consider the overall impacts using the above assessment endpoints, since changes in biodiversity are due to the interactions of a number of influences. 8.2 Construction Phase Impact Assessment The effects of mine activities during the construction phase of the mine are considered in this section. The following subsections discuss those aspects of the project that could potentially interact with the environment, and provides the rationale for their assessment.

The construction phase is considered to include remediation of previously disturbed areas, in particular the open pits and the existing tailings facility as well as construction of new infrastructure. The construction phase does not include development of the underground mine, since this will occur during the operations phase. 8.2.1 Air Quality, Noise, Light and Vibration The effects of construction of the mine on ambient air quality for local residents will be limited due to absence of nearby settlements.

Construction will result in increased dust that may have a temporary effect on local vegetation. However, dust effects will quickly be mitigated by rainfall, and the effect of air emissions on vegetation is considered to be of low significance. Effects of dust on terrestrial fauna will likely be low, since terrestrial fauna will avoid the area due to construction noise and activity. Noise, light and vibration effects will similarly be limited to terrestrial fauna that will naturally avoid the area due to human activity. Since little habitat exists in the Project area, and few individuals have been observed in the area, the effects on wildlife will be confined to the areas directly disturbed. Less than 20% of the local wildlife populations are expected to be directly affected and the effects are predicted to be of low significance. Since the Project area is currently subject to human activity, terrestrial fauna, with the exception of scavenger species, will have already avoided the area.

Potential impacts of construction of the Dvoinoye-Kupol road on vegetation are similarly predicted to be low, since these will be limited to vegetation removal and effects of dust during construction, and road construction will take place predominantly in the existing winter road alignment. Dust from construction activities will be limited to habitats immediately adjacent to the road alignment. Effects on terrestrial fauna from noise will result in avoidance of the area by wildlife species. However, the effects will be confined to limited areas where there is active construction, and will be limited to those periods when construction is underway. Therefore, the effects are confined to small segments of the road, and are limited in duration. Wildlife species will return once construction disturbances cease.

Remediation of existing facilities (tailings disposal facility, open pits) will result in generation of dust, but as noted above, dust impacts are likely to be negligible.

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8.2.2 Groundwater Quantity and Quality Remediation of existing pits and tailings areas are expected to improve groundwater quality at down gradient monitoring locations. Closure of the former tailings facility in 2011 will result in migration of the permafrost upwards into the tailings, effectively eliminating any migration of groundwater to the active thaw zone. This will also eliminate potential migration of tailings water to surface water through this route. As a result, closure of the former tailings facility is expected to improve local groundwater and surface water quality. Table 4.8-1 shows that copper and zinc concentrations in the Dvoinoye River at locations downstream of the former tailings facility were lower in 2011, following closure of the tailings facility.

The effects of construction of infrastructure on groundwater quality are expected to be low. The landfill will be lined to prevent seepage to local groundwater sources. Groundwater occurs as isolated taliks in the river valleys and floodplains of the local streams. Construction activities for infrastructure will take place in upland rocky areas, where there is no reported shallow groundwater zone. Ditching will be constructed before infrastructure is built, to limit potential migration to local groundwater and therefore the impacts of construction activities on groundwater quality are predicted to be of low magnitude and significance. Fuel storage and explosives facilities will be constructed on impermeable pads to limit infiltration into active thaw zones that could affect taliks. Predicted impacts on groundwater are not expected to result in increases in any parameters over baseline conditions, and the significance of this activity is considered to be low.

Local groundwater quantity in the active thaw zone is determined by permafrost thawing, and is connected to stream flow. Construction of infrastructure will be on berms to protect the permafrost, and construction activities will not affect stream flows and therefore there is no anticipated effect on groundwater quantity. Therefore the magnitude of the effects on groundwater quality is considered to not affect baseline conditions, and the significance is considered to be low. 8.2.3 Surface Water Quantity and Quality Site preparation and construction activities are expected to increase the potential for erosion due to surface runoff from exposed areas and, to a lesser extent, by dust generated by construction activities. Currently, a ground cover of mosses and grasses protects lower slopes from erosion.

Ditching will be constructed early in the Project to intercept runoff and re-direct the flows to settling ponds prior to release to area watercourses. As a result, minor increases in turbidity are expected during the construction phase. The steep relief and sparse ground cover in the area, particularly on the steep upper slopes, result in local increases in turbidity in these streams during normal conditions. The effects of localized construction are anticipated to result in only incremental increases in turbidity in the Dvoinoye River and Pravy Yarakvaam River, given that the watershed areas upstream of the site that are currently affected by runoff and erosion during heavy rainfall events are a significant source of sediment during these events. Therefore, the magnitude of this impact is considered to be low. The activity occurs only for a short period until the ditching and settling ponds have been constructed, and the effects are considered immediately reversible upon completion of construction. Therefore, effects of infrastructure construction are considered to be of low significance.

Fuelling and servicing of vehicles will be in dedicated servicing areas, equipped with impermeable surfaces and spills containment and cleanup to prevent washout of any spilled materials to local watercourses. Construction personnel will be trained in their proper use. While fuelling will be an on-going activity during construction, this

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activity will be confined to designated areas with proper spills containment. Therefore, the impacts of fuelling activities on surface waters are predicted to be of low magnitude and significance.

Construction of a new channel to temporarily divert the flow of the Dvoinoye River and Pashkin Kluch Creek around the West Pit will result in a temporary increase in suspended solids as flow is diverted into the new channel and any loose material is suspended and carried downstream. This will result in a temporary and short term increase in total suspended solids (TSS). The effects are localized and are anticipated to result in only an incremental increase in turbidity in the Dvoinoye River, given that the watershed area upstream of the site consists of barren rocky slopes, is currently affected by runoff and erosion during heavy rainfall events, and is a significant source of sediment during these events. Baseline data (Table 4.8-1) shows that TSS levels are highly variable, with much higher concentrations in the spring during snow melt runoff. Therefore, aquatic life in the Dvoinoye River is adapted to periods of higher suspended solids, and would not be affected by a small short-term increase due to construction activity.

Changes in other water quality parameters are not predicted to occur during construction. Therefore, the change from baseline conditions is expected to be negligible, and the impacts on water quality are considered to be of low magnitude and low significance.

Changes in water quantity are not anticipated during the construction phase, since there will be no interference with groundwater flows or interception and retention of surface runoff (i.e., all runoff will be collected in ditches and routed to the treatment facility prior to release to surface water courses). Therefore, the change from baseline conditions is expected to be negligible, and the impacts on water quantity are considered to be of low magnitude and low significance.

The construction of the Dvoinoye-Kupol Road will cause short-term increases in suspended solids where stream crossings are constructed. Increased sediment loading to adjacent streams will occur during in-stream work to install stream crossings, culverts and road-side ditching, which could temporarily increase TSS concentrations in localized areas. Increases in TSS will be temporary, and construction activities in water will be timed, where feasible, with low flow conditions to minimize effects of TSS on aquatic life. Therefore, the effects are considered to be of low magnitude, limited to small areas around the stream crossings, limited to the short period of time required to construct the crossing and immediately reversible upon completion of construction. As a result, impacts of road construction on water quality are expected to be of low significance. Road construction will not interfere with stream flows, and therefore, impacts of road construction on water quantity are expected to be of low significance.

Fuelling of road construction equipment will take place in designated areas, away from local water bodies. Therefore, impacts from fuelling on water quality are predicted to be of low magnitude and significance. 8.2.4 Soils and Sediments Mine and Infrastructure Availability of soils is limited on the site, and as noted in Section 4, most of the site consists of exposed rocky upland areas, with soils confined to the river valleys where little construction activity will take place. Good quality soils, where available, will be stockpiled and protected from erosion. The review of existing conditions (Section 4) indicates that some soils in the areas of the previous mining and processing plants have elevated concentrations of some metals and metalloids. Therefore, soils with elevated concentrations of metals may not be suitable for re-

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use in future rehabilitation. Soils quality will be assessed prior to stockpiling against the EDLs and background soil quality. Soils in excess of the standards and significantly different from background levels will be disposed of in the landfill (these soils could be used as cover materials).

Impacts to soils and exposed ground during construction phase will be limited to spills of fuels and other substances. Fuelling and servicing of equipment will take place in dedicated areas that will be equipped with spills containment and cleanup materials. Any contaminated soils in areas not planned for continued use during operations will need to be cleaned up at the end of the construction phase and placed in the appropriate cell in the landfill. Therefore, effects on soils are considered to be of low magnitude, since there are no activities that could result in widespread degradation of soils, and any contaminated areas will be remediated.

Closure of the existing pits and tailings management area and decommissioning of existing site infrastructure will reduce any potential effects on sediment quality from these areas, improving sediment quality in those reaches immediately downstream of these facilities. Storm water and snow melt runoff will be collected in settling ponds prior to release to local streams, and effects on sediment quality will be minimized. As noted earlier, TSS concentrations in the Dvoinoye and Pravy Yarakvaam River are highly variable, with high concentrations generally in the spring during snow melt runoff. Aquatic life in these streams would be adapted to periods of increased TSS, and therefore, effects on sediment are considered to be of low magnitude and readily reversible. Dvoinoye-Kupol Road Soil types were investigated along the proposed road alignment, and analytical data for these soils have been provided for a number of locations. Data on existing soils indicate that soil types do not differ substantially from the regional soils and are likely mainly of cryogenic origin. Soils are therefore likely to experience erosion due to removal of vegetation cover. As well, removal of vegetation cover can result in the thawing of the underlying permafrost, with the potential for increased erosion of soils as well as slumping due to solifluction.

As noted above, stockpiling of soils, particularly in borrow areas, will be undertaken for use in restoration when the borrow areas are no longer needed.

Sediment quality in streams along the route will be affected primarily during construction. Increased sediment loading to adjacent streams will occur during in-stream work to install stream crossings, culverts and road-side ditching. Increases in sediment will be temporary, and will be timed, where feasible, with low flow conditions to minimize effects of sediment on aquatic life. Therefore, the effects are considered to be of low magnitude, limited to small areas around the stream crossings, limited to the short period of time required to construct the crossing and immediately reversible upon completion of construction.

Fuelling of road construction equipment will take place in designated areas, away from local water bodies. Therefore, impacts from fuelling on soil and sediment quality are predicted to be of low magnitude and significance. 8.2.5 Biological Communities 8.2.5.1 Vegetation Communities Construction of the mine and supporting infrastructure will result in the removal of minor amounts of vegetation since most of the construction related to the mine will occur in upland areas of exposed rocky slopes where vegetation growth is sparse or non-existent. As well, much of the Project area has already been disturbed by previous mining activities, which has resulted in bare exposed rocky ground susceptible to erosion. These existing conditions are reflected in the higher suspended solids concentrations in the Dvoinoye River (Section 4.8).

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As noted in the assessment of existing conditions, the vegetation communities in the upland areas, where these exist, are mainly dominated by lichens and mosses (Figure 14). The more diverse vegetation communities that occur at lower elevations in the river valleys and floodplains are outside of the areas where the mine or supporting infrastructure will be located. The mine portal and supporting infrastructure will be constructed in an already disturbed area, and there will be minimal vegetation disturbance as a result of the new construction. Similarly, the landfill site will be constructed in a previously disturbed area. Both the portal and landfill are in areas where the natural landscape consists of exposed rock (identified as “stony deserts with areas of lichen tundra” on Figure 14), with minimal vegetation.

The exceptions are the proposed locations of the accommodations complex, storage facilities, water treatment facility and explosives store, which are located in the valley of the Pravy Yarakvaam River. These facilities will be located upslope in areas where grasslands transition to exposed rock (Figure 14), away from the valley bottom vegetation communities, and therefore will have minimal impact on local vegetation. Construction of site facilities will affect small areas where sparse vegetation communities exist, and the magnitude of the effect is considered to be low. The extent of the impact will be limited to the footprint of the infrastructure, and will extend throughout the operations phase into close, when site infrastructure will be decommissioned. Effects on vegetation will not extend into the Local Study Area. As a result, the significance of the impact is considered to be low.

Erosion of soils during construction is expected to have little impact on these vegetation communities. As noted in Section 4, the valley bottoms are comprised of naturally accumulated alluvial materials that have eroded from higher elevations. These will continue to accumulate in the valley bottoms due to runoff and flooding of the rivers during peak flows that will deposit sediments along the floodplain.

The explosives warehouse will be located along the slopes, away from the more sensitive valley bottom vegetation communities. Potential runoff from the storage areas will be contained, and ditching will be directed to a local settling pond for testing before water is released.

Disturbance of vegetation communities will be kept to a minimum. Vegetation communities not only stabilize soil conditions, minimizing erosion and sedimentation of streams, they also serve to insulate the permafrost. Due to the slow growth characteristics of arctic vegetation, disturbed areas can take many years to re-establish vegetative cover. During this time increased erosion, as well as thawing of the permafrost (along with solifluction of the soils) can occur.

During construction, boundaries for infrastructure will be established, and all clearing and construction activities will be confined to these areas in order to minimize disturbance of adjacent vegetation communities. Boundaries will be clearly marked to minimize incursions of equipment.

Vegetation communities will also be affected along the proposed Dvoinoye-Kupol Road. Since vegetation communities along the road are similar to those encountered at the mine site, the potential impacts from road construction are expected to be similar to those noted above for development of the mine site. Erosion protection will be a concern in some areas, such as along the shorelines of the lakes and the large number of wetland areas along the proposed route. Incursions of construction equipment into adjacent areas not directly required for construction and operation of the road will be kept to a minimum. With appropriate mitigation measures, the effects of construction are predicted to result in minor changes in vegetation communities and are therefore expected to be of low significance.

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8.2.5.2 Terrestrial Fauna Effects on bird and mammal populations are considered with respect to the loss of habitat that may displace some individuals. Effects of dust from construction activities are expected to be of low significance since these will be confined to the Site Study Area. Dust suppression will serve to minimize dust generated by construction equipment. Much of the construction will occur during periods when temperatures are below freezing, and dust generation will be minimal.

Loss of habitat will be due to the construction of Project infrastructure. The main areas of construction will be the mine portal area, the landfill, and the accommodations/office/electrical power/fuel supply complex in the valley of the Pravy Yarakvaam River. The portal and landfill areas consist mainly of exposed rocky habitat with little vegetation (Figures 7 and 14 show these areas are comprised of stony deserts and previously disturbed areas), and as a result provide little foraging habitat for wildlife. No critical habitat has been identified in these areas, and the species recorded in the area would at most use the area as part of their larger foraging habitat. These areas have also been disturbed by previous mining activities. As a result, there is little available habitat in these areas for wildlife, and the effect on wildlife from development of these areas is expected to be of low magnitude. As noted in Section 4, with the exception of potentially nuisance species such as gulls, few species of birds or mammals have been observed in these upland rocky areas, and the observations on wildlife indicate that these areas do not constitute critical habitat for local species.

Development of the infrastructure complex in the valley of the Pravy Yarakvaam River will affect some grass and willow habitat, although the majority of the area occupied by the complex would be upland exposed rock habitat. As such there is little habitat suitable for wildlife in this area and no critical habitat has been identified in these areas. As well, the construction will avoid the lowland river valley habitat that would provide more suitable wildlife habitat. Since large areas of similar habitat are available locally and regionally, the significance of the loss of small areas of habitat within the Project area is considered to be low. The effects can be mitigated to some extent through establishment of site boundaries, to protect adjacent areas from incursions by construction equipment. Measures include clearly marking project area boundaries and identifying exclusion areas. As well, assessment prior to clearing should identify nests or dens of birds and mammals that can inform the need for mitigation measures such as seasonal timings or pre-clearing to avoid disturbance or destruction of wildlife during vulnerable periods. The development of the site will affect less than 20% of the available lowland habitat. As a result, the effect on vegetation and wildlife communities from site development is predicted to be low, confined to the mine area, and reversible upon closure. Therefore the effects on terrestrial communities are predicted to be of low significance.

Additional potential impacts could be through collisions with vehicles operating on site, as well as along transportation routes to the site. Vehicle speed controls may be necessary at certain times or along certain routes. As well, animals may be attracted to the site, where they may become nuisances and will need to be removed or exterminated. These effects can be mitigated by management of domestic solid wastes, and good housekeeping practices. Finally, effects on local wildlife could be affected by predation by domestic animals (primarily dogs) and hunting by site personnel, and can be mitigated through prohibitions on bringing pets to site, feeding wildlife, and hunting. In particular, bird and small mammal populations are sparsely distributed due to the low productivity of arctic habitats, and losses of individuals to predation by pets can have cascading effects on predators. Hunting could potentially affect reindeer populations, identified as being present in the regional area, during their yearly migrations, as well as waterfowl, and strict restrictions on hunting by site personnel will need to be enforced.

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With appropriate mitigation, the effects on bird and mammal populations from construction of the mine and associated infrastructure are expected to be low.

Habitat loss and effects on bird and mammal communities from construction of the Dvoinoye-Kupol Road are expected to be similar to the impacts at the mine site. The road alignment will generally follow upland terrain and will avoid lowland areas and wetlands due to the difficulties in constructing and maintaining the road in this type of terrain. Since the lowland areas are also the most sensitive bird and mammal habitats, the potential impacts are likely to be minimized. However, temporary disturbance of some individuals during construction will occur, and these individuals may be displaced. Since the disturbance will occur for a limited period of time, will generally not occur during breeding season (construction will mainly occur during the colder seasons), and will be reversible upon completion, the temporary displacement of species due to construction activity is considered of low significance. Loss of habitat will be confined mainly to the less productive habitats. Less than 20% of the lowland river valley habitats (confined mainly to the valley of the Maly Anuy River) will be affected by the road. As a result, the impact of habitat loss due to construction of the road is considered to be of low significance.

Restrictions on hunting along the road will also be strictly enforced. Restrictions on vehicle speeds, particularly during those periods when migratory species may be present, will be required. With appropriate mitigation measures, the effects of construction on wildlife are predicted to result in no measureable changes in wildlife communities and are therefore expected to be of low significance.

Potential impacts on the winter road from Pevek to Dvoinoye are likely to be minimal. Transport of supplies to the site will take place during winter when few animals are likely to be encountered. The same speed restrictions and restrictions on hunting and fishing will apply along this route as well. Since no construction is planned for this route, there will be no additional habitat loss. 8.2.5.3 Aquatic Communities Effects on aquatic communities during construction will primarily be limited to those activities associated with site preparation. Removal of vegetation cover and disturbance of soils/ground could result in increased erosion to local water courses. Coupled with elevated levels of some metals and metalloids in local soils, erosion could affect water quality and aquatic biota in local receiving waters. The effects are mitigated by the construction of sediment and erosion controls early in the construction period as needed and maintenance of appropriate setbacks throughout the construction period. As a result, the changes to TSS levels are predicted to be less than 15% (the Project area comprises less than 10% of the drainage area of the Dvoinoye and Pravy Yarkavaam Rivers) and the significance of effects on aquatic communities during construction are considered to be low.

Other potential impacts are associated with fuelling and servicing activities for construction equipment, as well as discharge of domestic waste water from the construction camp. The construction personnel are anticipated to use the existing accommodations on site, and therefore discharge of waste waters will be through the existing system until a new system has been constructed. The effects of spills of fuels and other chemicals will be mitigated through construction of designated fuelling and servicing areas, and spills cleanup. With appropriate mitigation measures, there is no predicted change in water quality and the significance of these effects is considered to be low.

Construction of the mine and infrastructure will have minor additional impacts on the aquatic communities of the upper reaches of the Dvoinoye River. The temporary diversion of the Dvoinoye River around the West Pit will result in the temporary loss of stream habitat and some benthic productivity in the reach affected until the new stream channel can become re-colonized. Construction of other site facilities will have a minimal impact on aquatic

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habitats, since in-stream activities will be limited to installation of stream crossings and treated water discharges. The flows in the river in the Project area are intermittent, and accordingly biological communities in the river are limited to those few species that can survive under these conditions. These include a small number of benthic organisms that are adapted to these conditions. Fish are unlikely to be present in these small streams, except on an occasional basis as they migrate upstream from permanent habitats well downstream of the mine site. Therefore, there is no critical fish habitat identified in the Project area.

The Dvoinoye River in the area of the Project has currently been affected by the operation of the former mine, and as a result the flow of the river has been diverted such that the upper reaches now flow through the West Pit. As well, the existing tailings facility is located next to the river, and the water quality data suggest there has been a minor impact, mainly as increased concentrations of some metals in surface water and sediments downstream of the tailings facility. These impacts are expected to be reduced as flow is diverted around the West Pit, and the former tailings facility is remediated. During construction, snowmelt and rainfall runoff from the site will be collected by ditches, and routed to a treatment facility prior to discharge. This will remove a significant amount of suspended material that in turn will improve water quality, and by extension, reduce potential impacts on aquatic biota. As noted in Section 4, the benthic fauna of local rivers is characterized by species that occur in the cold, clear streams of the arctic, and hence are relatively intolerant of increased sedimentation. As a result, changes in water quality are predicted to be negligible (<15% over existing conditions) and the significance of these changes is predicted to be low.

Effects on the aquatic communities due to construction of the Dvoinoye-Kupol Road will be limited to the immediate area of the river crossings. Since the proposed route follows existing rivers such as the Tytliutin River, and runs along the margin of Lake Tytyl, measures need to be implemented to prevent sedimentation of these water bodies during construction. As well, vehicle maintenance areas need to be contained to prevent spills of fuels reaching watercourses and fuelling needs to be in designated areas with spills containment and cleanup materials on hand. Ditching, and appropriate sedimentation ponds need to be constructed to prevent runoff from road construction reaching local watercourses, and these need to be inspected and maintained regularly. Road construction will consider fish use of local streams to avoid construction during sensitive life stages, such as spawning periods. Therefore, with appropriate mitigation measures to control runoff, the significance of effects of road construction on aquatic life is predicted to be low.

Effects on aquatic communities from transport of equipment and supplies to the site from the port at Pevek will be minimal, since transport will occur in the winter months when streams and rivers are frozen. Spills can be contained and cleaned up before these reach open waters. Erosion and sedimentation are minimal due to the frozen conditions and the cessation of activities in the spring. 8.2.6 Biodiversity Changes in biodiversity reflect the integration of a number of factors, including habitat alteration or loss, disturbance from noise and human activity, the effects of increased erosion and sedimentation, the spills of materials such as fuels and other chemicals, and seepage from waste rock and ore stockpiles. As such, effects on biodiversity represent the sum of the impacts considered in the previous sections.

Potential sources of effects on biodiversity include land preparation for construction, vehicle movements, vehicle servicing, erosion and runoff from rainfall events and snow melt, and spills of fuels and lubricants.

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Biodiversity is an interrelated concept. Changes in vegetation communities, for example, can cascade to effects on bird and mammal populations, as well as effects on aquatic communities through increased erosion. The previous sections have shown that with appropriate mitigation measures, the effects on vegetation communities can be minimized, in part due to the location of the mine and infrastructure in terrain that has little native vegetation due to the steep rocky slopes and harsh climate. This, in turn, has minimized the potential impacts on bird and mammal populations that are generally present in the lowland areas outside of areas disturbed by the Project. By avoiding these areas, and by restricting hunting and fishing, these populations are likely to experience minimal impact from the Project. Terrestrial studies have also noted that no rare, threatened or endangered species have been recorded or observed in the Project area.

Biodiversity in local watercourses is naturally low due to the ephemeral nature of these watercourses. These streams naturally experience large fluctuations in flow, with attendant increases in TSS. The small area of the Project relative to the drainage areas of these streams indicates that the effects on the biodiversity of aquatic life are likely to be low.

Therefore, with mitigation measures, such as limiting the areas of disturbance, restricting vehicle speeds and hunting and fishing, minimizing erosion and sedimentation through maintenance of drainage and treatment systems, and containment and cleanup of spills, the effects on biodiversity are expected to be low.

In arctic habitats, the lack of resources and harsh climatic conditions generally limit the potential biodiversity enhancements that can be implemented by a Project. The low natural biodiversity in these areas is a consequence of the local conditions, and will respond to few anthropogenic efforts at enhancement. Most efforts will be directed to minimizing the impacts on biodiversity by limiting the extent of habitat disturbance, and avoiding the more productive habitats. Nonetheless, biodiversity can be enhanced by promoting regeneration of those areas disturbed as soon as practical when these areas are no longer needed. 8.3 Operations Phase Impact Assessment During the operations phase, there is limited new construction, since the mine infrastructure necessary to operate the mine will be in place. Construction will be mainly limited to advancement of the ramps and stopes as underground mining progresses. Supplies will continue to be brought to site throughout the operations phase. Waste rock and ore will be stockpiled, and ore shipped regularly to the processing facilities at Kupol while waste rock will be processed for use as backfill in the underground workings. 8.3.1 Air Quality, Noise, Light and Vibration Air Quality Air quality during operations can potentially be affected by a number of sources and therefore air dispersion modeling was undertaken to provide an assessment of the Project activities that are likely to cause a measurable change to air quality. The activities assessed include mining, ore processing and supporting activities. The atmospheric assessment characterizes the effects of the Project in a thorough, traceable, step-wise manner. Results are compared to the air quality limits listed by the Russian Federation (1999), or suggested World Health Organization (year) targets (in the absence of local guidance) that form the basis for the EDLs in Section 2. Internationally accepted emission estimation and dispersion modeling guidance was followed in completing the work.

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The sources of emissions included in this assessment are:  emissions from underground mining;  fugitive emissions from drilling and blasting activities;  fugitive dust emissions from stockpiling and material handling activities;  fugitive emissions from crushing and screening activities;  emissions from paste backfill plant operations;  fugitive dust emissions from haul routes (unpaved roads);  vehicle tailpipe exhaust emissions; and  emissions from power generation. Emissions were calculated using activity and equipment specifications provided in the Feasibility Study completed for the Project by Hatch in accordance with accepted emission estimates. Potential air quality effects due to the proposed operations at the Dvoinoye Mine site and along the Dvoinoye-Kupol road were assessed using hourly, daily and annual dispersion modeling. The operating conditions and the calculation methods were conservatively based and are not likely to underestimate the emission rates for the Project.

These air emission estimates were then used as inputs for the dispersion modeling that provided estimates of maximum ground-level concentrations resulting from the Project emissions. Air dispersion models were used to estimate the ambient ground level concentrations released from the Project during the operational phase. There is no local air modeling guidance; therefore an internationally accepted dispersion modeling approach for this assessment was followed. The likely environmental effects for the air quality indicators were evaluated with the aid of the CALPUFF dispersion model. The CALPUFF dispersion modeling system is a non-steady-state Gaussian puff model and is internationally accepted for this type of air dispersion modeling assessments.

The CALPUFF dispersion model requires processed meteorological data to provide the calculated concentrations. No government approved dispersion modeling data was available for the Project location and in addition the regional study area has limited meteorological stations with insufficient instrumentation to characterize the local meteorology. Therefore five years (2007 – 2011) of gridded prognostic data for the regional study area was downscaled with the Pennsylvania State University/National Center for Atmospheric Research mesoscale meteorological model (NCAR/PSU MM5). This site specific meteorological data set was developed in accordance with accepted practices and compared to the limited available from the closest meteorological stations to the Project. The site specific meteorological data agrees with the limited available data.

This site specific data were further processed with the CALMET meteorological model to produces three- dimensional wind fields based on local terrain and land use. The output of this model is used by CALPUFF. No on-site wind monitoring is available, however an assessment of the wind fields generated by CALMET behave in accordance with expected wind conditions.

A complete description of the meteorological data, dispersion model and emissions calculations is provided in Appendix C, and briefly summarized below.

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Modeling Approach

Modeling was completed on a 30 x 30 km grid, centred on the Dvoinoye Mine, with 500 m grid spacing. Additionally, a separate assessment of the haul road between Dvoinoye and Kupol was completed, to determine the distance from the roadway at which particulate (TSP, PM10 and PM2.5) would meet the Environmental Design Limits (EDLs) for the facility.

Emissions Estimates

A complete description of the methodology for calculating the facility emissions is provided in Appendix C. A summary of the site emissions is provided in Table 8.3-1. Table 8.3-1: Sources of Air Emissions from the Project Source Description Indicator Compound Emission Rate (g/s) Emission Rate (kg/day) North Vent Raise CO 2.365 204 TSP 5.348 262 PM10 1.622 140 PM2.5 0.450 39 NOx (as NO2) 3.323 287 SO2 0.002 0.1 Central Vent Raise CO 2.651 229 TSP 5.994 518 PM10 1.818 157 PM2.5 0.505 44 NOx (as NO2) 3.725 322 SO2 0.002 0.2 Ore Sorting and Storage TSP 1.326 114 Pad PM10 0.295 26 PM2.5 0.142 12 Waste Rock Pile TSP 2.426 210 PM10 0.735 64 PM2.5 0.318 28 Crushing and Screening TSP 0.091 8 Plant PM10 0.034 3 PM2.5 0.008 0.7 Cemented Rockfill Plant TSP 0.071 6 PM10 0.019 2 PM2.5 0.005 0.5 Power Generation Building CO 2.709 234 TSP 0.347 30 PM10 0.347 30 PM2.5 0.347 30 NOx (as NO2) 11.821 1021 SO2 0.006 0.5 Road from West Portal to CO 0.654 56 CRF TSP 0.875 76 PM10 0.281 24 PM2.5 0.061 5 NOx (as NO2) 0.975 84 SO2 0.001 0.1

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Source Description Indicator Compound Emission Rate (g/s) Emission Rate (kg/day) Road from East Portal to CO 0.085 7 Ore Pad TSP 0.113 10 PM10 0.036 3 PM2.5 0.008 0.7 NOx (as NO2) 0.126 11 SO2 0.0001 0.01 Road from East Portal to CO 4.420 382 Waste Pile TSP 5.912 511 PM10 1.896 164 PM2.5 0.413 36 NOx (as NO2) 6.590 569 SO2 0.007 0.6 Onsite Haul Road CO 0.116 10 TSP 0.129 11 PM10 0.042 4 PM2.5 0.010 0.9 NOx (as NO2) 0.172 15 SO2 0.0002 0.01 Offsite Haul Road (1 km CO 0.159 14 only) TSP 0.266 23 PM10 0.084 7 PM2.5 0.016 1 NOx (as NO2) 0.237 20 SO2 0.0003 0.02

Modeling Results and Assessment – Dvoinoye Project Site

The dispersion modeling results for the Dvoinoye Project Site are provided in Table 8.3-2. Table 8.3-2: Dispersion Modeling Results Indicator Averaging Period EDL Maximum Maximum Maximum outside Compound Onsite (µg/m3) outside Project security perimeter (µg/m3) footprint (µg/m3) (µg/m3)

CO Maximum 24-hour 5000 a 1419 684 318 Average 24-hour (annual) 3000 a 203 39 18 TSP Maximum 24-hour 500 a 1760 1000 433 Average 24-hour (annual) 150 a 313 57 24

b PM10 Maximum 24-hour 100 561 331 145 Average 24-hour (annual) 50 b 99 18 8

b PM2.5 Peak 24-hour 50 219 112 52 Average 24-hour (annual) 25 b 28 6 3

c NO2 Maximum 1-hour 200 829 524 295 Maximum 24-hour 200 a 452 234 162

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Indicator Averaging Period EDL Maximum Maximum Maximum outside Compound Onsite (µg/m3) outside Project security perimeter (µg/m3) footprint (µg/m3) (µg/m3)

Average 24-hour (annual) 40 a 114 88 46

c SO2 Maximum 10-minute 500 8.7 5.1 2.4 Maximum 24-hour 125 d 2.5 1.2 0.6 Average 24-hour (annual) 50 a 0.3 0.1 0.03 Notes: a Russian standards (maximum acceptable concentrations) b WHO Interim Target-2 c WHO Guideline d WHO Interim Target-1

CO and SO2 were predicted to meet the EDL throughout the modeling domain, including within the disturbed footprint, and therefore are considered to be of negligible impact.

A “low” impact was assigned to annual TSP, annual PM10, annual PM2.5, and 24-hour NO2, all of which were predicted to meet the Project EDL within 0.5 km of the disturbed footprint area.

A “moderate” impact was assigned to 24-hour TSP, 24-hour PM10, 24-hour PM2.5, 1-hour NO2 and annual NO2. These indicators were predicted to exceed the EDL outside the 0.5 km buffer around the Project footprint; however, none of them would be likely to exceed the EDL more than 1.0 km from the Project footprint. Figure 17a through Figure 17e show maximum predicted concentrations for these indicators and averaging times. Since there are no human receptors within 1.0 km of the Project, this is considered to be of low significance.

No air quality indicators were predicted to have a “high” impact for this project as the mine site is located in a remote area, far from human populations.

Modeling Results and Assessment – Dvoinoye to Kupol Haul Road

TSP, PM10 and PM2.5 from hauling operations between Dvoinoye and Kupol were considered separately from the mine site. The purpose of this modeling was to determine at what distance from the road the airborne particulate concentrations would meet the Project EDL.

PM10 and PM2.5 were predicted to meet the EDLs at any distance from the haul route, making them of negligible consequence for the purposes of this assessment. TSP was predicted to occasionally exceed the EDL on the road, but met the Project EDL 100 m distance from the road, making this indicator of “low” significance.

Conclusions

Dispersion modeling for the Dvoinoye mine and haul road to Kupol were completed using conservative assumptions based on the information available in the Feasibility Study (Hatch, 2012). While certain compounds were found to potentially exceed EDL concentrations within the disturbed footprint of the site, concentrations rapidly dropped off. Only the 24-hour PM10, 24-hour PM2.5, 1-hour NO2 and annual average NO2 concentrations

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were found to exceed EDLs at a distance of 0.5 km from the site. At a distance of 1 km from the site, all compounds met the Project EDLs. Air emissions would continue during the mine life and are reversible upon closure. Therefore, the effects of air emissions are considered to be of low significance.

Potential impacts of dust from the haul route between Dvoinoye Mine and the processing facility in Kupol were found to be minimal, with concentrations of all size fractions of airborne particulate meeting the EDLs within 100 m of the road.

Overall, the Project is completely capable of operating within the EDLs. Certain dust reduction measures must be maintained in order to control road dust, and these have been included in the dispersion modeling and need to be incorporated in the design and management plans for the Project. Noise, Light and Vibration Noise, light and vibration are expected to continue at the mine site and will continue to result in terrestrial fauna avoiding the area. As noted in Section 4, the higher elevations provide little habitat for most species, and displacement of species is expected to be minor. Noise will be localized around the portal area and the accommodations complex, and will be associated mainly with ore and waste rock stockpiling, ore transfer, operation of the cemented rock backfill plant and operation of the electrical power station. Vibration will be localized to the portal area since all blasting will take place underground. Light will be a disturbance mainly during the colder winter months, when few animals will be around, thereby minimizing the impacts of light on local fauna. There are no human settlements nearby that could be disturbed by light, noise or vibrations.

Noise, light and vibration from ore transport and road maintenance vehicles, will affect terrestrial fauna if the all weather road is selected, and ore transport occurs on a regular basis throughout the year. Fauna will avoid the area around the road depending on the frequency of traffic. During winter months the effects on fauna will be minimal, since few species will be present in the winter months.

Aquatic habitats would not be affected by noise, light or vibrations. 8.3.2 Groundwater Quantity and Quality Advancement of ramps and shafts is not expected to affect shallow groundwater. The ramps and shafts will go much deeper than the taliks and will avoid taliks wherever possible since this would necessitate additional pumping of mine water (and treatment).

Infiltration of rainfall and snow melt will be negligible, since rainfall and snow melt will be diverted around the mine portals.

Any groundwater that may seep into the mine workings will freeze due to the low temperatures underground and will be removed during the mucking process.

Fuel storage areas are constructed on pads, with berming to contain any spills. Any leakage from fuel storage areas will therefore be contained and cleaned up before it can reach shallow groundwater aquifers (i.e., taliks).

The landfill site will be constructed with substrates that prevent seepage to groundwater. Mine portal area infrastructure and the landfill will be constructed in upland areas of bedrock exposure which are outside of the areas where shallow groundwater taliks occur. These areas will have perimeter ditching to prevent off-site migration of any substances to adjacent groundwater aquifers. Therefore, the effects of mine operation on

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groundwater quality are predicted to be of low significance since there is no predicted change to groundwater quality. 8.3.3 Surface Water Quantity and Quality The mine operation will not result in the direct discharge of mine or process water to local surface water courses. Surface water courses are intermittent in flow, and are generally dry for most of the year. As a result, a surface water quality and quantity model has not been developed. The only discharges from the site are surface runoff, which is collected and treated from those facilities where runoff could come into contact with contaminating substances, and the domestic wastewater treatment system.

Therefore, the effects on surface water quality and quantity during the operations phase will be primarily from:  runoff and seepage from waste rock and ore stockpiles and potential release to area watercourses;  runoff from cleared areas of the site; and  discharge of domestic water. Currently, there is no indication that mine water will be generated during underground mining. However, if mine water is generated, water will be tested, and treated as appropriate. It is expected that the small volumes of water generated by use underground for mining will freeze and be removed during mucking.

Seepage/runoff water from the waste rock and ore stockpiles will be collected in ditches, and treated in settling ponds prior to discharge. Water quality data presented in Section 4.8 shows that the existing waste rock pile has had minimal effect on water quality in the Dvoinoye River. Since geochemical testing has shown that the waste rock to be produced during mining would be similar in composition to the existing waste rock, any seepage from the new waste rock pile is not expected to result in changes in water quality. Table 4.5-10 shows that copper concentrations in the new waste rock are similar to concentrations in the Dvoinoye River downstream of the existing waste rock piles, and indicate that there will be no change in water quality from temporary storage of the waste rock at surface. The kinetic test results presented in Table 4.5-10 represent the first flush results, which typically have the highest concentrations of leachable metals, and therefore represent concentrations that would be expected during short term storage of waste rock at surface. As noted, waste rock will be processed as cemented rock backfill and will therefore be stored at surface for only short periods of time. As well, the new waste rock pile will be located along the south side of the Dvoinoye River in the mine portal area. Ditching in this area will prevent runoff and seepage to the Dvoinoye River. Seepage water will be directed to settling ponds prior to release. It is anticipated that water from these sources will not need additional treatment prior to release to surface water courses. However, water quality will be monitored during operations, and if higher concentrations that could result in potential impacts are noted, then additional treatment measures will be implemented as appropriate. Therefore, the effect of runoff from the waste rock and ore stockpiles on water quality in the Dvoinoye River is expected to be of low significance.

Surface (storm water) runoff is expected to result in negligible changes in runoff volumes, since the drainage area remains unchanged and Project activities will not result in impoundment or abstraction of surface waters. However, storm water runoff will likely be retarded slightly due to collection and treatment of runoff, and therefore peak flows in the Dvoinoye River may be slightly depressed, with runoff released to surface waters over a longer period of time than would occur naturally. This may slightly reduce peak flows during rainfall events, which could have a beneficial effect by reducing in-stream erosion. The effects are expected to be of low magnitude (less than 15%

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change), occur infrequently, and to be reversible at closure. Therefore effects on water quality are expected to be of low significance.

Water from domestic use will be treated prior to discharge and with appropriate treatment will not result in impacts on receiving waters. Domestic water will be pumped to the water treatment facility from the accommodations and office complex, and will be collected by truck from more remote areas (e.g., portal buildings) for transport to the treatment facility. Discharge of treated water will slightly increase flows in the Pravy Yarakvaam River, since domestic water will be obtained from groundwater sources. The predicted increase in flows is 11% (200 m3/day discharge vs. 1814 m3/day minimum 30-day flow with return period of 200 years, from Table 4.7-5) which is less than 15%, and therefore the effects are considered of low magnitude and significance.

Water from the West Pit will be pumped out, discharging to the Dvoinoye River (the Dvoinoye River will be diverted to the south around the West Pit during the construction phase). The water quality in the pit currently exceeds the environmental design criteria only for sulphate, and then only during late summer-fall (September) sampling (i.e., during the low flow period) (Table 4.8-1). Therefore, water from the pit should be pumped out during spring and summer higher flows, when data shows pit water quality would be similar to water quality in the Dvoinoye River. As a result, draining of the West Pit is not predicted to adversely affect downstream water quality since there will be no predicted exceedances of baseline conditions. Concentrations of sulphate in the pit water are below levels that could affect aquatic life during higher flow periods, and are only slightly higher than maximum sulphate concentrations in the Dvoinoye River upstream of the site. Effects of draining of the pit are expected to be of low magnitude and low significance, since water quality will not be affected, and the duration of the effect is limited to the pumping period.

Surface water quality in streams and lakes along the proposed route of the Dvoinoye-Kupol road could be affected by runoff and spills. Sediment controls and spills containment measures implemented during construction will need to be maintained during operations. 8.3.3.1 Underground Mine, Waste Rock and Ore Stockpiles Surface water is not predicted to be affected by mine water since exploration activities have indicated there is no free water in the rock. Due to the presence of permafrost any water in the mine is predicted to freeze, and would be removed during mucking. Waste rock would be either directly re-used underground as backfill, or would be transported to the waste rock pile at surface for processing into cemented backfill. Ore will be transported to surface, and stored in temporary stockpiles for shipment to Kupol. Drainage from the surface waste rock and ore stockpiles will be collected by ditches and directed to settling ponds for treatment prior to release. Therefore, effects of any mine water would be mitigated by collection and treatment. Since there is no predicted change in water quality, the significance of seepage from the waste rock and ore stockpiles is considered to be low.

Flows in existing water courses will remain unimpeded since there are no impoundments or surface water abstraction facilities. Rainfall and snow melt runoff will be collected by ditching and treated in settling ponds prior to release to local streams. As a result, there are no predicted changes in stream flows and the significance of this impact is considered to be low. 8.3.3.2 Maintenance and Fuelling Areas Fuelling and servicing of mine vehicles at surface will take place in dedicated areas. These include hard surfaces to reduce infiltration of fuels and lubricants into soils, and spills cleanup materials to contain any spills. The system

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will discharge to an emergency sump. As a result, there are no anticipated water quality effects from fuelling and maintenance areas, and the effects of these operations on surface water quality are judged to be of low significance. Underground equipment will be serviced underground by dedicated fuelling vehicles that will be equipped with spills containment and cleanup materials.

Enclosed maintenance areas will have sumps to retain any spilled materials. The system will discharge to the storm water system, and will be directed to the treatment facility via piping, or in more remote areas, will be collected by tank truck for transport to the treatment facility. Treatment includes grit traps and oil-water separators. The treated water will be discharged to the Pravy Yarakvaam River. The treatment system will be designed to meet the Maximum Acceptable Concentrations (MACs) for surface water bodies approved by the Russian Ministry of Natural Resources. As a result, there is no expected release of harmful substances to surface waters and the effects on surface water quality are considered to be low. 8.3.3.3 Storm Water Storm water will be collected from site infrastructure through a system of drainage ditches that will direct flows to the treatment facility. Non-contact storm water will be treated in settling ponds prior to release to adjacent surface waters.

Storm water in contact with potential sources of contaminants (e.g., in fuelling areas) will initially be pumped to the storm water system to allow for settling of particulates, with further treatment to remove any fuel or lubricant residues prior to discharge to surface waters. Water from the treatment system will be discharged to the Pravy Yarakvaam River. As such, storm water quality is not expected to be altered due to Project activities, and the effects of release of storm water on surface water quality are considered to be low.

Storm water collection systems are not expected to alter flows in the adjacent streams. Runoff will be intercepted by ditches, but released after settling. As a result the stream flow regime may be moderated slightly as the peak discharge will be decreased, but the period over which discharge occurs would be slightly extended as the settling ponds drain (i.e., the storm hydrograph will be slightly flattened and extended).

The Project area comprises less than 10% of the catchment area of the Dvoinoye and Pravy Yarakvaam Rivers. Therefore runoff from site facilities will comprise less than 10% of the flows within these rivers. As shown in Table 4.5-10, the initial kinetic test results show that average concentrations of metals in the waste rock, ore and low- grade ore will meet the Project EDLs. As a result, the effects of storm water runoff are predicted to be of low magnitude and low significance on water quality in adjacent watercourses.

Therefore, the significance of storm water discharge on water quality and quantity in the Dvoinoye and Pravy Yarakvaam River is predicted to be low. 8.3.4 Soils and Sediments Atmospheric deposition from dust, and seepage of rainwater from the temporary ore stockpile and waste rock stockpiles could affect adjacent soils. However, it is expected that containment structures (berms) will prevent migration of any solubilised metals to adjacent areas. Soils will be tested upon closure, and any unacceptable contamination will be remediated. Contaminated soils would be disposed of in the landfill.

As well, discharges from the site will be treated prior to release to surface water. Sediment control measures around mine infrastructure will be maintained, and spills containment and clean-up will be undertaken in all

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servicing areas. Contaminated soils will be cleaned up before these can migrate to local watercourses. Seepage from the waste rock and ore stockpiles will be intercepted by ditches. As well, the predicted concentrations of metals in any leachate (Table 4.5-10) that may reach local streams will be similar in concentrations to existing water quality in these streams. As a result, impacts on sediment quality during operations are predicted to be low. 8.3.5 Biological Communities 8.3.5.1 Vegetation Communities Any additional site clearing should be accompanied by ongoing assessment or management practices (such as pre-clearing of vegetation and other cover) to avoid sensitive vegetation communities and also to avoid disturbing nesting and denning wildlife during critical periods. Given the small footprint of any additional areas, and the large extent of available habitat, the significance of any additional habitat loss on local biological communities is expected to be low. As well, any effects can be further mitigated upon closure through site rehabilitation. 8.3.5.2 Terrestrial Fauna During operations, there will be no additional habitat loss over the changes that occurred during construction. Continued noise and human activity will displace wildlife from the Project footprint area. There will be a need to control or prohibit hunting and encroachment, including the presence of pets (dogs) at the site. Vehicle speed limits will be controlled to reduce the incidence of roadkill. Domestic waste will be disposed of in a manner that does not attract wildlife. Baseline studies indicate that gulls have been attracted to the site. Since gulls can also predate nesting birds, taking eggs, attraction of nuisance species such as these will be avoided through proper waste management. Feeding of wildlife will be prohibited. Housekeeping and building design and management will discourage occupation by or attraction of wildlife to the site. Given the scarcity of wildlife in the area, predation by domestic pets, losses by vehicle collisions, and extermination of nuisance animals could affect mammal species populations in the local areas, particularly through cumulative effects from these activities. In particular, restrictions on reindeer hunting will be enforced to ensure there are no adverse effects on local migrating populations. With mitigation measures in effect, there are no predicted change sin local wildlife populations, and the significance of this effect is considered to be low.

Potential effects on wildlife along the Dvoinoye-Kupol Road are expected to be limited to losses due to interactions with road traffic. Currently the road is used only in winter when few wildlife species will be present. Year-round operation of the road, with frequent heavy truck traffic will increase the potential for collisions with wildlife during the summer months when migratory species return. Transport of ore from Dvoinoye to Kupol will involve 36 truck trips per day from Dvoinoye to Kupol for ore transport. As well, transport of fuel and supplies to both Dvoinoye and Kupol will occur over a number of seasons as the road is used year-round. The lowland areas surrounding the Maly Anuy River currently contain the greatest concentration of wildlife within the areas affected by the Project. Enforcement of vehicle speeds, and driver training will be implemented to minimize wildlife losses. Additional habitat loss is not expected during operations. As noted above, strict prohibition of hunting will be enforced to minimize impacts on terrestrial biota. This applies particularly to reindeer, which have been observed reasonably close to the Project site. Similar restrictions will apply along the winter road from Pevek. Impacts on wildlife along this route are expected to be minimal, since transport of equipment and supplies will take place in the winter months when few animals will be around.

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8.3.5.3 Aquatic Communities Mine water is not expected to be generated since any water generated during mining will freeze due to the low temperatures and will be removed during mucking. Runoff from the ore stockpile and waste rock stockpiles will be collected and routed to the treatment facility. Release of storm water and seepage water from the waste rock pile is not expected to result in adverse effects on aquatic life. Settling of suspended matter prior to release of storm water to surface water bodies will reduce TSS, and will also allow for complexing of metals to suspended matter, reducing biological availability. Current water quality data below the waste rock pile indicates there is no effect on water quality. Since geochemical testing has shown that the rock to be mined is similar, there is no expected increase in any of the parameters. Existing water quality (Section 4.8) has shown that while there are some exceedances of the EDLs for copper, sulphate and zinc, concentrations of all parameters are below levels that would be expected to have an adverse effect on aquatic life. Since guidelines such as the EDLs are usually based on conservative assumptions, that include safety factors, the potential for effects from these substances is considered with respect to the available toxicity data for these parameters. These are reviewed below:  Copper: copper concentrations in the Dvoinoye River below the waste rock piles in 2011 were recorded at a maximum of 0.002 mg/L. The environmental design limit value for copper has been derived from the Russian MAC of 0.001 mg/L. A review of copper toxicity data assembled by the U.S. EPA (EPA ECOTOX database) shows that the lowest effects levels for benthic organisms, which would be the only receptors likely to be exposed, are in the order of 0.013 mg/L (reported NOEC (no observable effect concentration)) for the amphipod Hyalella azteca, reported by Deaver and Rogers (1996) as cited in ECOTOX). As a result, no adverse effects are predicted on aquatic life due to copper.  Sulphate: sulphate concentrations that could affect benthic organisms are taken from Soucek and Kennedy (2005).who reported an LC10 (lethal concentration that could affect 10% of the test organisms) for Hyalella azteca in moderately hard waters, as occur in the Dvoinoye River, of 262 mg/L. Maximum concentrations in the Dvoinoye River downstream of the West Pit were reported in Section 4.8 as 149 mg/L, which is well below the effect levels for sensitive benthic organisms. As a result, no adverse effects are predicted on aquatic life due to sulphate.  Zinc: the maximum concentration recorded in the Dvoinoye River downstream of the West Pit was 35 µg/L at sampling location Dv 3 (Table 4.8-1), which is above the EDL of 10 µg/L. A review of zinc toxicity data assembled by the U.S. EPA (EPA ECOTOX database) to assess effects levels for benthic organisms, which would be the only receptors likely to be exposed. Mukhopadhyay (1983) (cited in ECOTOX 2012) reported a NOEL (no observable effect concentration) for chironomids of 90 µg/L. Wilding and Maltby (2006) reported a LOEC (lowest observed effect concentration) of 190 µg/L for the amphipod Gammarus pulex (cited in ECOTOX 2012). Kashian et al. (2004) (cited in ECOTOX 2012) reported a NOEL for stonefly nymphs of 470 µg/L. These concentrations are well above the maximum concentration for zinc recorded in any of the Project site water bodies, and indicate that zinc concentrations would not be predicted to result in adverse effects on aquatic life

The above review indicates that while these substances exceeded the EDLs on occasion under baseline conditions, the effects thresholds are much higher than the measured concentrations in the Dvoinoye River, and no effects are expected on aquatic life. The initial kinetic test results (Table 4.5-10) show that average concentrations of metals in the leachate would meet Project EDLs. Therefore, there is no predicted impact on

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aquatic life from the waste rock and ore stockpiles since there is no predicted increase in any of these parameters in adjacent watercourses.

Snowmelt and runoff will be collected in ditches and routed to the treatment facility prior to discharge. Snowmelt and runoff water is expected to contain higher concentrations of suspended solids, but not elevated levels of metals.

Water from other operations areas, including maintenance areas will also be directed to the treatment facility prior to discharge. As a result, the effects on the aquatic environment are also expected to be low. Storm water from constructed facilities will be routed to the treatment facility prior to discharge to surface water, with the ditches lined to prevent erosion. The Project is located in an area of steep rocky slopes with little vegetation, and as a result runoff in the local streams experiences periods of higher turbidity during rainfall and snow melt (Table 4.8- 1).Therefore, site runoff is not expected to increase turbidity above levels currently experienced in the Dvoinoye and Pravy Yarakvaam Rivers during runoff events. As a result, the anticipated effects on aquatic communities are expected to be low.

Recreational fishing would likely be a reasonable pursuit for workers and visitors rotated through the site. While fisheries resources are low at the mine site, fishing pressure could affect fisheries resources in lakes and rivers along the Dvoinoye-Kupol road. However, fishing would need to be controlled in terms of locations, seasons and catch restrictions to avoid potential impacts on spawning or migrating fish populations.

Effects of operation of the Dvoinoye-Kupol Road on aquatic communities would be similar to the effects during construction: increased erosion and sedimentation from vehicle traffic and road maintenance activities, potential spills of fuels to water courses, and potential accidents resulting in spillage of ore. The aquatic communities in the streams and rivers along the access route would be sensitive to these impacts, and could be locally affected. However, the rocky terrain will result in naturally higher turbidity in streams during rainfall events, and biota would be adapted to periods of higher turbidity. The effects will be mitigated by ditching and sediment control measures (e.g., rock check dams) where ditches drain to existing watercourses to minimize release to local streams. Spills will be contained and cleaned up to prevent contamination of surface waters. Therefore, the significance of localized impacts on the broader populations of these species in these watercourses is likely to be low. 8.3.6 Biodiversity Effects on biodiversity during operations are expected to be confined to continued noise disturbance, and the on- going loss of some habitat. As noted earlier, the Project infrastructure is located primarily in upland areas of exposed rocky substrates where critical habitat has not been identified and that provide limited foraging habitat for the species recorded in the area. Mitigation measures inherent in the Project design will minimize effects of rainfall runoff (erosion and sedimentation in streams) and the effects of spills and leaks of fuels.

Biodiversity on the Dvoinoye-Kupol Road would be affected mainly by vehicle accidents, and these will be mitigated to the extent possible by restrictions on vehicle speeds, education of drivers, and restrictions on hunting and fishing. The alignment of the road typically follows upland areas that contain fewer preferred habitats for wildlife, which will minimize the likely encounters with wildlife. Maintenance of drainage systems, such that they prevent sediment eroded during rainfall events from affecting stream habitats, is an example of management measures that can minimize biodiversity impacts.

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Few biodiversity enhancements are available in these habitats, and the main measures to affect biodiversity are those mitigation measures that minimize the impacts on terrestrial and aquatic ecosystems. 8.4 Closure Phase During the closure phase, the mining operations cease and infrastructure that will not be required in post-closure is decommissioned. Salvageable equipment is removed; all fuels and reagents removed, and any contaminated soils are remediated.

Site reclamation will be undertaken, and includes re-contouring of the site, construction of post-closure drainage systems, and reclamation of disturbed areas. Soils stockpiled during the construction phase, if any, will be used for site reclamation. 8.4.1 Air Quality, Noise, Light and Vibration Effects during closure will be similar to those during construction, as the site is decommissioned and include dust from demolition activities, and noise from equipment. In post-closure, the effects on air quality, noise, light and vibration are expected to be eliminated. As a result, species displaced by activity on the site are expected to return, as suitable habitat regenerates. 8.4.2 Surface Water and Groundwater Quantity and Quality During closure, surface runoff will be directed around any remaining infrastructure. Natural drainage will be restored to the extent possible. Since the mine workings will be frozen, no impact of mine water on surface water is predicted. The existing waste rock will be used as backfill in the mine during operations, and as a result there will be no waste rock left on surface that could affect surface or groundwater quality. The site will be graded, any contaminated soils (e.g., potentially contaminated soils around fuelling/servicing areas) will be removed and placed in the landfill, and ditching directed to settling ponds that will drain naturally to surface waters. Once ground conditions are stabilized, there will be no further predicted erosion to surface waters, and TSS levels are expected to revert to pre-development conditions.

Fuels, lubricants and reagents will be removed from the site, and therefore there is no potential for seepage or leakage to surface or groundwater.

Groundwater wells not required for future monitoring will be sealed. Therefore conditions during closure and into post-closure are not predicted to result in changes in surface water or groundwater quality or quantity, and the effects are considered to be of low significance.

It is assumed that the Dvoinoye-Kupol road will not be decommissioned, but will be maintained for light vehicle use for inspections during post-closure. Therefore, ditching and sediment control measures will be maintained into post-closure for as long as the road remains in service. 8.4.3 Soils and Sediments Soils nutrient levels are generally poor, and addition of nutrients or soil amendments may be necessary to promote regeneration of vegetation cover in those areas where vegetation existed prior to Project development. Soils stockpiled during construction, if any, will be used for site reclamation in those areas where natural soils were disturbed. The barren rocky nature of the site indicates that only very limited areas contained soils and reclamation would be minor.

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Soils contaminated during construction and/or operations (e.g., temporary waste rock and ore stockpiles, fuelling and servicing areas) will be tested and remediated as required.

Sediments are not expected to be affected during mining. Closure activities that protect surface water quality will also protect sediment quality. 8.4.4 Biological Communities 8.4.4.1 Vegetation Communities The closure phase offers opportunities to mitigate some of the habitat destruction that occurred during the construction and operations phases by means of site rehabilitation. However, as noted, most site activities take place in areas of barren, rocky soils with limited or no vegetation.

There is potential for effects on vegetation communities through re-use of contaminated soils stockpiled during the construction phase. Selection of soils for re-vegetation as noted needs to be based on concentrations of metals in soils. Suitability of soils could be based either on site-specific uptake studies using local plant species, or through comparison with published literature thresholds. Since existing soil concentrations exceed guidelines in some areas that indicate potential anthropogenic influences, soil testing and separation may be required prior to re-use. Soils with higher concentrations may be suitable for subsurface applications, beyond the root depths of sensitive plant species.

Any spills of fuels would be remediated before revegetation is undertaken. 8.4.4.2 Terrestrial Fauna Closure activities are expected to facilitate regeneration of most of the habitat lost during the construction and operations phases of the project. Since much of the Project area consists of exposed rocky slopes, regeneration will be confined to the small areas where natural vegetated habitats occurred prior to Project development. However, as noted above, re-generation of disturbed habitats may take decades to accomplish, given the slow rate of growth of arctic vegetation. Site rehabilitation measures, such as replacement of soils and seeding, if practical and feasible, will likely accelerate restoration of available habitat for birds and mammals. Since the area affected is small relative to the extent of similar habitat available regionally, the effect is expected to be of low positive significance.

The effects on bird and mammal populations upon closure and into post-closure will be addressed through restoration of vegetation communities in the area, specifically through selection of appropriate vegetation species to provide cover and food for wildlife. Demolition and removal or disposal of on-site structures, filling of sumps, wells and pits, and removal of fences and transmission lines would be necessary to avoid unnecessary hazards to wildlife.

Wildlife are expected to become re-established as noise and activity cease in post-closure, and the area begins to revert to a natural state. 8.4.4.3 Aquatic Communities Effects on aquatic communities during closure will result mainly from site disturbance activities as the site is decommissioned. This could result in increased runoff as buildings are dismantled, and site grading is undertaken. The effect is considered of low significance, since site drainage systems will continue to operate during closure. The effects can be mitigated by proper maintenance of drainage systems.

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Effects during post-closure are likely due to runoff from the site. As noted, mine water is not expected since any water in the mine will freeze. All waste rock left on surface from previous mining activities will be consumed as backfill in the final years of mine life, and no waste rock will be left on surface. No ore stockpiles will be left on surface since all ore will be shipped to Kupol prior to mine closure. The effects of runoff can be mitigated by proper care and inspection of control systems, including the site drainage ditch system. As a result, no impacts on aquatic life are expected from closure of the mine site.

Effects on the Dvoinoye-Kupol road in closure and post-closure will be limited to occasional light vehicle traffic and road maintenance equipment. 8.4.5 Biodiversity The closure and post-closure phases represent the periods in the project life cycle when biodiversity enhancements can be most effectively employed. As noted earlier, disturbance will be limited to rocky areas that provide limited foraging habitat for the species present in the area and the overall effects on biodiversity during construction and operations were predicted to be low as a result. During construction and operations, and into closure, the lack of suitable habitat, the sparse local wildlife populations and the harsh climate all serve to limit biodiversity in the Project area. The slow regeneration times for vegetation communities also means that regeneration of habitats will be a prolonged process.

As a result, there are few biodiversity enhancements available aside from revegetation where there is suitable habitat. The most effective measure for biodiversity enhancement will be the removal of human activity from the site that will permit natural regeneration of vegetation in disturbed areas. In due course, the lack of human activity on the site will permit wildlife to return to the previously affected areas. As a result, in post-closure no net loss in biodiversity is predicted. 8.5 Summary of Environmental Impact Assessment The assessment of potential risks to environmental components has indicated that with proper maintenance of pollution controls, effects on the environment can be minimized and contained within the Mine Area. In this case, the potential effects on biological communities, which are the ultimate receptors of any changes to the environment, would be limited to physical disturbance of the habitat. As such, the effects can be reasonably mitigated upon habitat restoration after closure. The potential environmental impacts are summarized in Tables 8.5-1 through 8.5-3.

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Table 8.5-1: Summary of Assessment of Potential Impacts - Construction Phase

Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude

Low: Emissions will be temporary Fumes and Immediately Low: Local Proper during exhaust from Confined to Limited to Continuous reversible exceedance maintenance construction and Air quality equipment. Site Study construction during upon of MACs is of equipment None intermittent. Dust Area. phase. construction. cessation of not will reduce Effects are generation. construction. expected. emissions. immediately reversible.

Low: No human Immediately Nearly Low: No settlements in the Worker Noise from Confined to Limited to reversible continuous human area. Animals will protection, as Noise construction Site Study construction upon None during settlements avoid the area per local equipment. Area. phase. cessation of construction. in the area. due to noise and regulations. construction. activity. Reversible in Soil, where Confined to the medium Low: Small Low: Effects will available, will parts of the Extends term, when areas will be be confined to Site be stockpiled Site Study through One time site affected. local areas within preparation Soils Soil removal and used for None Area where construction effect. restoration Limited soils the mine footprint and site infrastructure phase. occurs in Project where there are construction restoration is sited. during area. natural soils. of upon Closure. infrastructure closure. Spills Low: Effects will containment Runoff of soils Limited to Reversible be small and and to streams. rainfall since TSS Low: Local localized. Streams designated Spills of fuels Confined to Can occur events and will be streams are are highly turbid servicing Water Quality and lubricants Local Study throughout snowmelt flushed out highly turbid during runoff None areas will from vehicles Area. construction. during of the system during runoff events. reduce and stationary warmer during peak events. Spills will be potential for equipment. months. flows. contained and impacts on cleaned up. water quality. Low: site Low: Groundwater Construct and Site Single infrastructure occurs in taliks in maintain preparation Confined to Occur occurrence is located in river valleys, not Not ditching early Groundwater activity effects Site Study throughout in each area upland areas upland areas. None reversible in on Area. construction as sites are with no Drainage systems construction groundwater. prepared. shallow will collected and phase. aquifers. divert runoff from

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Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude upslope areas before flows reach aquifers. Low: small areas Stockpiling of Impacts of vegetation Low: small soils and re- Confined to extend up Reversible affected. Large Confined to areas (<20% seeding of Removal of small areas until upon closure areas of similar Vegetation one time of vegetated affected None vegetation. in the Site rehabilitation for most vegetation occur removal. areas) will areas, where Study Area. during areas. broadly be affected. practical, closure. throughout the upon closure. region. Removal of Low: limited habitat through habitat occurs in construction upland areas Rehabilitation and noise. where Project is upon closure Low: small Effects of Throughout located. Animals will restore Reversible in areas hunting on construction Confined to displaced will find most affected Terrestrial Local Study most areas (<20%) of local and one time suitable habitat habitats. None Biota Area. upon habitat populations. operations removal. nearby. Restrictions closure. affected Effects of pets phases. Restriction on on hunting locally. (dogs) on hunting and pets and pets small mammal will protect (dogs). and bird sensitive wildlife populations. populations. Surface Confined to Low: erosion is a Low: small drainage and rainfall significant factor Reversible areas sediment events in these Effects of Confined to as TSS will contributing control. Local Study during watersheds. Biota Aquatic Biota runoff on construction be flushed runoff. <20% Dedicated None Area. warmer is adapted to aquatic biota. phase. out during change in servicing months periods of high high flows. benthic areas for during turbidity. Spills will community. construction construction. be cleaned up. equipment. Low: short Low: dust duration, and Remediation Fumes and Immediately Limited to generated confined extent of existing exhaust from reversible Site Study short Single from small limit any effects of open pits Air Quality equipment. upon None None Area. construction occurrence area over earth movement. and tailings Dust completion of period. short period Positive impact on facility generation. construction. of time. downstream water quality.

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Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude Low: area is Immediately already disturbed Noise from Limited to Continuous reversible Low: area is Site Study by mining Noise construction construction during upon already None None Area activities. Local equipment. phase construction cessation of disturbed. fauna already construction. avoid the area. Moderate positive: Erosion improved soil protection quality will protect during Reduction of Persist long Confined to Moderate: vegetation, remediation. metals and Site Study Not Soils into post- one-time improved terrestrial and Monitoring None others Area reversible. closure remediation. soil quality. aquatic life from required to compounds. exposure to verify efficacy harmful of substances. remediation. Erosion protection Reduction in during Moderate positive: loading of Moderate: remediation, Persists long Confined to improved water some metals, Local Study Not loadings Monitoring Water Quality into post- one-time quality will benefit None suspended Area reversible. expected to will be closure remediation aquatic life solids, nitrates be reduced required to downstream. and sulphate verify efficacy of remediation. Moderate positive: Reduction in Monitoring reduced impacts loading of Moderate: will be Persists long Confined to on local some metals, Local Study Not reduced required to Groundwater into post- one-time groundwater None suspended Area reversible. impacts on verify efficacy closure remediation sources, with solids, nitrates groundwater of potential benefits and sulphate. remediation. to surface water. Low positive: Restoration of Low: small small areas of habitats lost Confined to areas of habitat returned to Site Study Persist into Not None Vegetation during former one-time potential natural use. May None Area. post-closure. reversible required mining remediation habitat require extended operations affected time period to revegetate.

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Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude Low positive: small areas of Restoration of Low: small habitat returned to habitats lost Confined to areas of natural use. Terrestrial Site Study Persist into Not None during former one-time potential Available habitat None Biota Area post-closure reversible required mining remediation habitat for birds and operations affected mammals depends on revegetation. Low positive: habitat quality precludes Low: habitat extensive use of Erosion Improvements Confined to quality is Local Study Persists into Not habitat by aquatic protection Aquatic Biota in water one-time limited by None Area post-closure reversible biota. Main during quality. remediation seasonal beneficiaries will remediation. flows. be the limited benthic community. Low: Emissions will be temporary Fumes and Immediately Low: Local Proper during exhaust from Confined to Limited to Continuous reversible exceedance maintenance construction and Air Quality equipment. Area around construction during upon of MPCs is of equipment None intermittent. Dust road. phase. construction. cessation of not will reduce Effects are generation. construction. expected. emissions. immediately reversible. Immediately Low: parts of Low: noise will be Dvoinoye- Noise from Confined to Limited to Continuous reversible the area are temporary and Kupol All- Noise construction area around construction during upon already intermittent. Local None None Weather equipment. road phase construction cessation of disturbed by fauna will adapt or Road construction. winter road. avoid the area. Maintenance of erosion Soil erosion Immediately Low: Low: parts of the control from Confined to Limited to Occasional reversible confined to area are already measures Soils construction area around construction during upon small area None disturbed by during activities. Fuel road phase construction cessation of and short winter road construction. spills construction. duration Spills cleanup.

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Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude Maintenance Low: erosion of sediment Immediately Low: protection as control Confined to Limited to Occasional reversible confined to Soil erosion, required and spills measures Water Quality area around construction during upon small area None fuel spills. containment and during road phase construction cessation of and short cleanup will construction. construction. duration minimize impacts. Spills cleanup. Low: Low: Immediately confined to contaminated Confined to Limited to Occasional reversible Proper spills small area soils will be Groundwater Fuel spills area around construction during upon cleanup and None and removed and road phase construction cessation of disposal. infrequent disposed of construction. occurrence immediately. Low: erosion Minimize protection as Soil erosion, Reversible areas to be Confined to Limited to Continuous Low: required and thawing of upon cleared, and Vegetation area around construction during confined to ground insulation None permafrost, cessation of avoid road phase construction small area. will prevent soil fuel spills. construction. sensitive loss. Spills will be habitats. cleaned up. Continuous Low: habitat loss Avoid Habitat loss, during Reversible Low: will be confined to Confined to Limited to sensitive Terrestrial vehicle traffic construction, upon confined to less sensitive area around construction habitats, None Biota hazards, fuel spill hazard cessation of small area habitats. Noise road phase enforce spills is construction. (<20%). will displace some speed limits. occasional species. Time Low: Low: construction construction confined to will avoid critical to avoid Sedimentation, Reversible Confined to Limited to Continuous small area. spawning periods. spawning habitat upon Aquatic Biota area around construction during <20% In stream periods. None disruption, fuel cessation of road phase construction change in construction will Construct and spills construction. benthic be confined to maintain community. small areas. sediment controls. TMF at Addressed in Addendum to Kupol ESIA Kupol

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Table 8.5-2: Summary of Assessment of Potential Impacts - Operations Phase

Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude

Dvoinoye- Air quality Fumes and Confined to Limited to Continuous Immediately Low: EDLs Low: No Maintain None. Kupol All- exhaust from Local Study operations during reversible will be met significant effects vehicle Weather equipment. Area. phase. operations. upon along road. from dust of emissions Road Dust cessation of fumes. systems. generation operations. from vehicles. Noise Noise from Confined to Limited to Continuous Immediately Low: No Low: No human None None vehicles and road operations during reversible human settlements in the equipment. alignment. phase. operations. upon settlements in area. Animals will cessation of the area. avoid the area. construction. Soils Air emissions Confined to Dust and Dust and Reversible Low: Spills Low: Effects of Vehicles to None. from dust and road emissions emissions during will be spills will be carry spills vehicle alignment. occur continuous closure. contained confined to local containment exhaust. Spills throughout until Spills are and cleaned areas beside the and cleanup of fuels and operations Closure. immediately up. <10% road. Effects of equipment. lubricants. phase. Spills may reversible increase in air emissions are Dust control occur with cleanup. soil predicted to be on roads and occasionally. parameters. low. maintenance of vehicle emissions controls. Water Quality Runoff of soils Confined to Can occur Limited to Not Low: Effects Low: Ditching and Vehicles to None to streams. Local Study throughout rainfall reversible. will be sediment controls carry spills Spills of fuels Area. operations. events minimal since will reduce containment. and lubricants during runoff would erosion. Maintenance from vehicles. warmer add to Maintenance of sediment months. existing areas will have controls to turbidity in treatment system. limit potential streams. for impacts <10% on water increase quality. expected. Groundwater Spills of fuels Confined to Can occur Limited to Not Low: small Low: Impacts Spills cleanup None and lubricants Local Study throughout warmer reversible. quantities from construction in fuelling from vehicles. Area. operations. months. expected in phase will servicing continue through areas.

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Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude confined the operations areas. phase. Vegetation Dust from Confined to Impacts Confined to Reversible Low: small Low: small areas Dust control None vehicles and local areas extend up one time. upon closure areas (<20%) of vegetation on roads. spills of fuels in the Site until for most will be affected by spills. Spills and lubricants. Study Area. rehabilitation areas with affected by Any affected cleanup. during remediation spills. areas will be closure. of affected remediated. areas. Terrestrial Removal of Local Study Throughout Confined to Reversible in Low: small Low: no additional Limit new None Biota habitat Area. operations one time most areas area (<20%) habitat loss incursions through phase. removal. upon of habitat during operations. into adjacent construction closure. affected. habitats. and noise. Enforce vehicle speeds. Aquatic Biota Effects of Local Study Confined to Confined to Not Low: effects Low: erosion and Regular None runoff on Area. construction rainfall reversible. of runoff will be maintenance aquatic biota. phase. events sedimentation controlled. of sediment during will be control warmer mitigated. measures. months. <20% of Immediate benthic spills cleanup community affected. Ore Air quality Dust from ore Site Study Throughout Intermittent. Reversible Moderate: Low: Effects of None. None Stockpiling at stockpile. Area. operations upon EDLs will be dust will be Dvoinoye phase. closure. met within 1 confined to the km of the Project area. No mine. human settlements within the area. Noise Noise from Site Study Throughout Intermittent Reversible Low: Noise Low: wildlife None None loading and Area operations upon closure will be low currently avoids off-loading relative to the area due to operating noise and activity. plant No human settlements in the area.

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Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude Soils Dust from Site Study Throughout Dust will be Reversible Low: Ore has Low: Seepage Stockpile will None loading/off- Area operations. continuous. upon closure low ARD from stockpile will be a loading. Seepage is potential. be collected and constructed Seepage from intermittent, routed to pad to stockpile. depending treatment. Ore minimize on has low ARD seepage to precipitation. potential. soils. Water Quality Runoff and Confined to During Intermittent Reversible Low: Ore has Low: Runoff and Maintain None seepage from Site Study operations. during open upon closure low ARD seepage will be ditches in stockpiles. Area water period potential. No intercepted by good order in operations change from drainage ditches. during baseline No effect operations. water quality expected on water courses. Groundwater Seepage from Confined to During Intermittent Reversible Low: No Low: No Maintain None stockpiles. Site Study operations. during upon closure change in groundwater ditches in Area operations groundwater aquifers are good order quality. known in the during area. Ditches will operations. intercept runoff before reaches taliks. Vegetation Loss of habitat Confined to Throughout Continuous Reversible Low: Low: Lack of Prevent None Site Study operations during upon closure Stockpiles vegetation in incursions Area operations are located in rocky upland into adjacent upland areas areas of natural areas. devoid of stockpiles will vegetation. preclude impacts <20% of on vegetation. vegetation affected. Terrestrial Loss of habitat Confined to Throughout Continuous Reversible Low: Lack of Low: Exposed Prevent None Biota Site Study operations during upon closure vegetation rocky habitat is incursions Area operations. limits habitat not preferred into adjacent for terrestrial habitat for most natural areas. biota. <20% terrestrial of habitat species. Small affected. area is affected.

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Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude Aquatic Biota Runoff and Confined to Throughout Continuous Reversible Low: <20% Low: No predicted Maintain None seepage from Site Study operations. during upon change in change in water ditches in stockpiles Area. operations closure. benthic quality. good order community. Sedimentation will during be controlled by operations. ditching. TMF at Kupol Addressed in Addendum to Kupol ESIA Underground Air quality Dust and Local Study Throughout Continuous. Dust and Moderate: Low: emissions Dust control None Mine and fumes from Area. operations fumes will EDLs will be will be confined to measures as Waste Rock blasting and phase. cease upon met within 1 the Project area. needed. Stockpile vehicles. closure. km radius of No human Maintain the site. settlements vehicle nearby. emissions controls. Noise Noise from Site Study Throughout Vehicle Reversible Low: Noise Low: No human No additional None blasting and Area (Local mine noise is upon will be habitation nearby. mitigation vehicle Study Area operations. continuous. cessation of confined Animals will avoid required. operations. for blasting). Blasting is operations. mainly to area. Workers will intermittent. mine area. need protection as per local regulations. Soils Dust and spills Site Study Throughout Intermittent. Reversible Low: Dust Low: Effects on Mitigation None of fuels and Area. mine upon from blasting soils will be measures, lubricants. operations. closure. is not limited to dust. such as spills Seepage from expected to Seepage and containment waste rock be toxic. spills will be and cleanup stockpile. Seepage will contained and are included be controlled any areas in the design. by pad and remediated. ditches. Water Quality & Release of Site Study Throughout Intermittent, Reversible Low: Waste Low: Seepage Maintain None Quality toxic Area mine depending upon closure rock has low and runoff will be storm water substances operations on since ARD collected by collection (blasting precipitation stockpiles potential. No ditches for system. residues, events. will be predicted treatment. metals removed at change in leaching). end of stream water operations. quality

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Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude

Groundwater Seepage of Site Study Throughout Intermittent Reversible Low: Low: No known Maintain None Quality & toxic Area. mine depending upon closure Seepage will aquifers in the storm water Quantity substances to operations on since be areas. Surface collection groundwater. precipitation stockpiles intercepted runoff will be system. events. will be by ditches intercepted before removed at and routed to reaching talik end of treatment areas. operations. facility. Vegetation Dust from Site Study Throughout Intermittent. Reversible Low: Dusts Low: Dusts are None. None blasting. Area. mine upon are not not expected to operations. cessation of expected to be toxic. Dust will mining. contain toxic be washed from substances. plant surfaces during rainfalls. Terrestrial Noise and Site Study Throughout Continuous. Reversible Low: Dusts Low: Animals will None. None Biota dust from Area. mine upon are not avoid area due to blasting and operations. cessation of expected to noise. Dusts are vehicles. mining. be toxic. not expected to be toxic. Aquatic Biota Release of Site Study Throughout Dependant Effects Low: Waste Low: Ditching will Maintain None toxic Area mine on rainfall reversible rock has low collect seepage ditching substances operations and snow upon ARD and runoff for around waste and increased melt. closure. potential. treatment. No rock areas. turbidity. <20% change change in water predicted in quality or quantity benthic expected. community Site Air quality Emissions Local Study Throughout Continuous. Effects Moderate: Low: Emissions Emissions None Infrastructure from support Area. mine reversible EDLs will be are confined to will meet facilities. operations. upon met within 1 the Project area. local closure. km radius of No human regulations the site. settlements for worker nearby. exposure. Noise Noise from Local Study Throughout Continuous. Effects Low: noise is Low: Noise will be Noise will None support Area. mine reversible not expected confined to local need to meet facilities. operations. upon to exceed area. Mine local closure. local criteria. workings are regulations underground and for worker will minimize exposure. noise generated.

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Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude Soils No impacts on soils expected during operations. Water Quality & Release of Local Study Throughout Continuous. Reversible Low: Low: Waste Mitigation None Sediments domestic Area. mine upon Domestic waters will be measures are waste water. operations. cessation of waste water treated prior to incorporated operations. is not discharge. into the expected to design. exceed local criteria. No change in water quality. Groundwater Abstraction of Mine Study Throughout Continuous Reversible Low: Taliks Low: Taliks are Monitor None water for mine Area operations upon Closure occur as isolated and will groundwater and domestic phase isolated not affect local or use and level. use. bodies, and regional abstraction groundwater in will not affect shallow thaw regional zones aquifers Vegetation No additional impacts expected during operations. Terrestrial Noise Local Study Throughout Noise – Reversible Low: Noise Low: No Restrictions None Biota disturbance. Area. mine constant. upon and human additional impacts on hunting Hunting. operations. closure. activity from above current are required. current impacts. Low operations populations could have driven be affected by animals away hunting. from the area. Aquatic Biota Water quality Local Study Throughout Continuous. Reversible Low: No Low for water Restrictions None effects. Area. mine upon effects from quality from on fishing Fishing operations. closure. water quality domestic use due may be pressure. since criteria to treatment. required. are not Fish habitat expected to occurs be exceeded. downstream of Restrictions the site and is not on fishing. readily accessible.

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Table 8.5-3: Summary of Assessment of Potential Impacts - Closure and Post-Closure Phase

Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude

TMF at Kupol Addressed in Addendum to Kupol ESIA Dvoinoye- Air quality There are no sources to the atmosphere during closure and post-closure once mining has ceased and ore is no longer trucked to Kupol. Kupol All- Noise There are no sources of noise during closure and post-closure once mining has ceased and ore is no longer trucked to Kupol. Weather Road Soils Restoration of Site Study Throughout Continuous Not Low: Habitat Low: Small areas None None habitat. Area. Post- applicable. in footprints of habitat lost Closure. of during infrastructure construction will will be remain. restored. Water Quality Runoff from Site Study Throughout During Not Low: Ditching Low: Sediment Regular None plant site. Area. Post- summer applicable. on site and control measures inspections Closure. months. re-vegetation will reduce runoff. and will reduce High background maintenance erosion. turbidity in local of ditches and streams from sedimentation topography. controls. Groundwater Contamination Site Study Throughout During Not Low: road is Low: Road will None None of ground Area. Post- summer reversible. not likely to be used only water. Closure. months. affect occasionally by groundwater light vehicles for quality. inspection. No sources of contamination are anticipated. Vegetation Restoration of Site Study Throughout Continuous Not Low: Habitat Low: Small areas None None habitat. Area. Post- applicable. in footprints of habitat will Closure. of continue to be infrastructure lost. will be restored. Terrestrial Restoration of Site Study Throughout Continuous Not Low: Habitat Low: Small areas None None Biota habitat. Area. Post- applicable. in footprints of habitat will Closure. of continue to be infrastructure lost.

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Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude will be restored. Aquatic Biota Runoff from Local Study Throughout During Not Low: No Low: Areas Inspect and None plant site. Area. Post- summer applicable changes in affected will be maintain Closure. months. water quality closed, ditching storm water or quantity will be diversion predicted. maintained, system. surface sources such as waste rock and ore stockpiles will be removed. Underground Air quality There will be no sources to the atmosphere from the underground mine upon closure. Mine Noise There will be no sources of noise upon closure activities. During closure, noise will be similar to levels during construction. Soils There are no sources of impact to soils during post-closure. Soils will be re-used during closure for site rehabilitation. Water Quality Runoff from Site Study Throughout Intermittent Not Low: No Low: Ditches will Maintain None portal area. Area Post-Closure reversible changes divert runoff ditches in predicted in around portals. good order. stream water Disturbed areas quality will be remediated upon closure. No mine water expected from underground working since this will freeze.

Groundwater Mine may Site Study Throughout Intermittent No reversible Low: No Low: any None None affect local Area Post-Closure change seepage into groundwater predicted in mine will freeze quantity. groundwater and not express quality to surface waters Vegetation No interaction with vegetation communities is anticipated from the underground mine. Terrestrial Loss of habitat Site Study Throughout Continuous Not Low: Small Low positive: None None Biota area. Area. Post- reversible. area of Small area of Closure. habitat habitat lost at affected by portal will be portal. restored.

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Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude

Aquatic Biota Runoff from Site Study Throughout Intermittent Not Low: No Low: Ditches will Inspect and None portal area. Area Post-Closure reversible changes divert runoff maintain predicted in around portals. storm water stream water Disturbed areas diversion quality will be system remediated upon closure. No mine water expected from underground working since these will freeze.

Servicing Air quality There are no sources of atmospheric emissions during closure and post-closure once dismantling is completed. Atmospheric emissions sources during and closure are similar to construction as dismantling begins and areas are remediated and reclaimed. Maintenance Noise There are no sources of noise during closure and post-closure after completion of closure operations. Noise sources during closure are similar to Areas construction as dismantling begins and areas are remediated and reclaimed. Soils Contaminants Site Study Throughout Continuous Reversible Low: Low: Sources of Remediation None from Area. Post- upon cleanup Contaminated contamination will and operations. Closure. of areas will be be removed. appropriate contaminated cleaned up disposal. areas. upon closure. Water Quality Runoff from Site Study Throughout Continuous Reversible Low: no Low: Remediation None site areas. Area. Post- upon cleanup change in Revegetation of and Closure. and re- water quality affected areas appropriate vegetation of is predicted. and ditching will disposal. site. divert runoff. Cleanup of contaminated areas will remove sources of contamination. Groundwater Contamination Site Study Throughout Continuous Reversible Low: no Low: Effects on Remediation None of ground Area. Post- with cleanup change in groundwater and water. Closure. of groundwater expected to be appropriate contaminated quality is minimal due to disposal. areas and re- predicted. ditching, re- vegetation. vegetation and cleanup.

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Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude Vegetation Contamination Site Study Throughout Continuous Reversible Low: Low: Vegetation Restoration None from Area. Post- with cleanup Contaminated will be restored and operations. Closure. of areas will be through cleanup remediation contaminated remediated. of contaminated with areas. Re-vegetation areas and appropriate will restore rehabilitation. disposal. habitat. Terrestrial Habitat Site Study Throughout Continuous Not Low: Small Low: Areas of Site None Biota Area. Post- applicable. areas of habitat restored restoration Closure. habitat will be are small relative restored. to local availability of similar habitat. Aquatic Biota Runoff Site Study Throughout Intermittent Reversible Low: No Low: Site None Area. Post- upon cleanup changes Revegetation of restoration Closure. and re- predicted in affected areas and vegetation of stream water and ditching will remediation site. quality. divert runoff. with Cleanup of appropriate contaminated disposal. areas will remove sources of contamination. Accommo- Air quality There are no sources of atmospheric emissions during closure and post-closure once dismantling is completed. Atmospheric emissions sources during dations and closure are similar to construction as dismantling begins and areas are capped or remediated. Offices Noise There are no sources of noise during closure and post-closure after completion of closure operations. Noise sources during closure are similar to construction as dismantling begins and areas are capped or remediated. Soils Contaminants Site Study Closure. Throughout Reversible Low: Low: Sources of None from Area. Post- upon cleanup contaminated Contaminated contamination operations Closure. of soils will be areas will be will be contaminated contained in cleaned up upon removed. areas. the landfill closure. Water Quality Runoff from Site Study Throughout Continuous Reversible Low: no Low: Regular None site areas. Area. Post- upon cleanup change Revegetation of inspections Closure. and re- predicted in affected areas and vegetation of water quality. and ditching will maintenance site. divert runoff. of ditches. Cleanup of contaminated

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Environmental Potential Activity Significance Mitigation Residual Component Impact Extent Duration Frequency Reversibility Magnitude areas will remove sources of contamination. Groundwater Groundwater Local Study Throughout Continuous Not Low: no Low: Cleanup will None None quality and Area. Post- applicable change in reduce potential quantity. Closure. groundwater contamination of quality ground water. predicted. Wells will be shut down, restoring ground water flows. Vegetation Contamination Local Study Throughout Continuous Reversible Low: Low positive: Site None from Area. Post- with cleanup Contaminated Vegetation will be restoration operations. Closure. of areas will be restored through and contaminated remediated. cleanup of remediation areas. Re-vegetation contaminated with will restore areas and appropriate habitat. rehabilitation. disposal. Terrestrial Habitat Local Study Throughout Continuous Not Low: Small Low positive: Site None Biota Area. Post- applicable. areas of Areas of habitat restoration Closure. habitat will be restored are and restored. small relative to remediation local availability with of similar habitat. appropriate disposal. Aquatic Biota Runoff Local Study Throughout Continuous Reversible Low: No Low: Regular None Area. Post- upon cleanup changes Revegetation of inspections Closure. and re- predicted in affected areas and vegetation of stream water and ditching will maintenance site. quality. divert runoff. of ditches. Cleanup of contaminated areas will remove sources of contamination.

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8.6 No Project Alternative Accepted international guidance requires that for every project, the alternative of not constructing the project must be assessed. The Project adds incrementally to the disturbed area created by previous mining activities at the site, and ensures that the existing mine and infrastructure are closed appropriately. Should the Project not proceed, it represents a loss of local income for a variety of workers, both those directly employed by the mine, and for those businesses locally, regionally (e.g., port facilities at Pevek) and nationally supporting the operations of the mine through provision of equipment, supplies and services. With appropriate mitigation measures, the environmental effects would be managed at levels that would be expected to have low significance. 8.7 Cumulative Impacts Currently the only other project within a reasonable distance from the Dvoinoye Project site is the Kupol Mine, located approximately 112 km to the south. The Dvoinoye and Kupol mines are complimentary, in that the proximity of the Kupol mine eliminates the need to have separate processing facilities at Kupol. This minimizes the footprint of the Dvoinoye mine, and focuses the emissions in a single area. Therefore, the two mines together reduce the overall impact that would occur had the two projects developed self-supporting infrastructure at each site. 8.8 Effects of Climate Change Climate change predictions typically expect a 2°C increase in the average yearly temperature by 2050. However, it is generally acknowledged that temperature increases in the northern latitudes would likely be higher.

Global temperature increases in arctic regions could generally affect the project mainly through increased potential for permafrost thawing. Reductions in permafrost could affect the Project through thawing of the permafrost under the former tailings facility, and through thawing of the permafrost in the mine workings that could result in release of mine water to surface water courses.

Continuous permafrost occurs in regions where the mean annual soil temperature is less than -5°C. Soil temperatures at the bottom of the seasonal thaw zone range from -4.2°C to -8.4°C.

Anisimov and Poliakov (2003) note that in the arctic regions the main impact of climate change is an increase in the depth of the permafrost thaw zone. The authors note that an increase of up to 0.5°C is predicted to occur in the Far East regions of Russia with an increase in the seasonal thaw zone of up to 20% over current thaw depths.

Pavlov (1994) notes that in western Siberia, temperature at the 10m depth increased by 0.3°C to 0.7°C from1981 to 1990 (i.e., over a ten year period). Using this as a basis for prediction, temperatures over the next 40 years (i.e., until approximately 2050) could increase by 1.2°C to 2.8°C.

Romanovsky (2004) estimates that temperatures in eastern Siberia at depths of 1.6-2.3 m have increased by 0.03°C per year, or approximately 1.2°C higher than current temperatures by 2050.

Current permafrost temperatures at depths of 3m at the Project site based on hydrogeological investigations are - 9°C to -11°C in areas outside talik zones (Section 4.6). An increase of 1.2°C to 2.8°C is expected to not have a significant impact on permafrost at depth. The most sensitive areas of the Project to permafrost thawing would be the underground workings and the former tailings facility. The underground workings are at depths that are unlikely to be affected by increased permafrost thawing at the surface.

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Near surface temperatures based on the data in Section 4.6 indicate temperatures range from -10°C to -12°C. As a result, temperatures are not expected to increase in the former tailings facility to where thawing of the tailings, with potential seepage to the Dvoinoye River, would occur.

French (1976) notes that the zone of continuous permafrost coincides with mean annual ground temperatures of -5°C, measured below the zone of annual variation. This correlates with an annual mean air temperature of -6°C to -8°C. Since ground temperatures are predicted to increase by up to 2.8°C from -9°C, as measured at the site, climate change is not likely to affect permafrost conditions, and therefore is unlikely to affect the underground workings or the former tailings facility. 8.9 Effects of the Environment on the Project Effects of the environment on the Project include potential hazards, such as seismic activity, forest fires and avalanches.

Hatch (2012) notes that the Project is located in Region 6 of nominal seismic intensity on the MSK-64 scale, and in the range of 2.8 to 4.3 on the Richter scale, and therefore in a zone of low to moderate seismic activity.

The report by FE Kolyma BHEM (2010) (attached as Appendix D-6), provides a review of avalanche and mudflow hazards in the Project area. The report notes that the potential for avalanches in the mine portal area is very low, and likely to occur only during winters with very high snowfall. Similarly, the location of the accommodations, office, electrical generating station, and fuel storage facilities in the valley of the Pravy Yarakvaam River is considered to be potentially avalanche prone. As a result, facilities were located outside of the area in which avalanches could potentially occur. The location of the explosives store was determined on the basis of susceptibility to avalanches. The area selected is outside of the avalanche prone area.

Since the site is located to the north of the tree line, forest fire danger is not present. Brush fires could occur in the lowland areas, but these habitat types are outside of the Project area. Risks of tundra fires that could burn for long periods of time affecting the Project are also low, since the Project infrastructure and the mine are located in areas of rocky substrates.

Climate change is not considered to potentially affect the Project, since predicted temperature increases will maintain permafrost conditions throughout the life-of-mine.

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9.0 ENVIRONMENTAL AND SOCIAL ACTION PLAN A detailed Environmental and Social Action Plan (ESAP, also referred to as Environmental and Social Management Plan - ESMP) that specifies action, responsible party, deliverable, timeline, and estimated budget cannot be prepared at the current stage of ESIA development. Therefore, this section of the ESIA presents a general description of the ESAP.

An ESAP defines the management framework, processes and monitoring requirements for the Project. It should meet the requirements of local (Russian) and international regulations as well as Kinross corporate standards. The ESAP will cover all project phases, from construction to operations and the closure/post-closure. It may be updated and revised as the Project develops. The ESAP will apply to all Project personnel and contractor/subcontractor personnel as well as visitors to the Project Site.

The implementation of the ESAP will be the responsibility of the Health, Safety and Environment (HSE) Officer and Corporate Responsibility and Social Affairs Managers. The HSE Officer will be responsible for the accident prevention, mine safety, environmental awareness, and training programs. He will report to the Director of Production. The Corporate Responsibility and Social Affairs Managers will communicate Kinross environmental policies to the local community through an on-going consultation process.

The ESAP is developed based on the Summaries of Assessment of Potential Impacts at construction, operations, and closure stages developed in Section 8. Tables 8.5-1, 2 and 3 provide methodical analysis of potential impacts at all project stages, for all project and environmental components. The ESAP follows the layout of Section 8 and is sub-divided into construction, operations and closure phases. The plan specifies:  What needs to be mitigated (environmental issue);  Why does it need to be mitigated (Environmental impact); and  How should it be mitigated (Management Action).

9.1 Management Framework

The integrated management framework provides the organizational and management context for the activities associated with the management of negative effects and enhancements of benefits identified in the ESIA. The management framework includes the following:  roles and responsibilities of Northern Gold and Project stakeholders, and resources required for implementation;  Russian legal requirements and standards, and international guidance;  ESAP goals and objectives;  program management processes to be implemented to meet objectives;  effectiveness and compliance monitoring, adaptive management and reporting;  inspections and auditing;

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 communication and stakeholder consultation; and  grievance management. 9.1.1 Roles, Responsibilities and Resources

An organizational structure will be established for the implementation of the ESAP with clearly defined lines of authority, areas of responsibility and accountability. The ultimate responsibility will reside with the Project’s Site Manager. Key components of the ESAP will be allocated to the senior manager with overall responsibility and ownership for its implementation. Details will be finalized prior to construction. These relationships reinforce Northern Gold’s commitment to the implementation of an effective ESAP.

Strong, effective collaboration will be maintained between the Project, all levels of government and affected villages, particularly in relation to Project operations and community development initiatives. 9.1.1.1 Education and Training

In addition to strong senior management team commitment and leadership, education and training of employees, contractors and others will be undertaken to establish a high level of awareness of ESAP objectives and individual responsibilities.

Capacity to effectively implement the ESAP requires that Project employees and contractors are trained in relevant environmental management procedures. The ESAP training will be implemented by qualified employees and contractors with integration into the Project’s operational training programs, where and as applicable.

The ESAP related planning, guidance and training materials will be reviewed annually and where appropriate, modified to changing conditions as these become apparent. 9.1.1.2 Resources

Northern Gold will provide the human, financial and technical resources needed to conduct environmental management, mitigation, enhancement and monitoring activities it is responsible for, throughout all phases of the Project. This will include provision of resources needed to implement the Closure Plan and to discharge post- closure long-term obligations, including monitoring, and care and maintenance obligations.

Some socio-economic management, effects mitigation, benefit enhancement and monitoring activities will require external resources to maximize effectiveness or for completeness. Northern Gold acknowledges that some stakeholders may have limited resources that could present a challenge to some aspects of ESAP implementation. It further recognizes the role it will play in supporting productive and co-operative relationships between these stakeholders that goes beyond its reporting of environmental monitoring results. This extends to confirming that the parties involved in environmental management activities and local community development initiatives are mutually aware of roles, responsibilities and involvements.

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9.1.2 Legal Requirements, Standards and International Guidance

The Project will comply with applicable Russian regulatory requirements during all phases of the Project. The Project may also adopt international guidelines on a voluntary basis, which may be more stringent and/or supplement criteria not currently included in Russian regulatory requirements.

Environmental compliance values consist of Russian regulatory requirements for air emissions, ambient air quality, dust deposition, noise levels and liquid effluent discharges. These requirements are considered to be protective of human health and the environment.

An overview of the institutional, policy and legal framework guiding the preparation of the ESIA, as well as the design and operation of the Project is provided in Section 2 and discussed under the relevant sections in the ESAP as appropriate. 9.1.3 Goals and Objectives

Northern Gold has developed the following goals for the environmental management of the Project:  design, construct, operate and close facilities in such a manner as to mitigate and manage negative environmental effects and enhance benefits;  appropriately train employees and contractors and provide ongoing awareness programs;  comply with current Russian regulatory requirements;  maintain consistency with international guidance and good practices;  develop specific objectives for the management of negative environmental (biophysical and socio-economic) effects and enhancement of benefits;  work with the community to identify priorities for its community development initiatives;  undertake periodic monitoring and audits, and adapt the plans to changing conditions as they become apparent; and  maintain effective communication and consultation with Project stakeholders. 9.1.4 Program Management

The ESAP sets out a broad program of activities to manage the mitigation of negative environmental effects and enhancement of benefits. Though some are related, others are independent of each other. In recognition of this, the following mechanisms will be used to manage the biophysical and social management plans as an integrated program:  Northern Gold and Senior Management Team Review and Approval – The senior management team will review and approve all mitigation- and benefit-specific plans and procedures, to verify that goals and objectives, performance indicators, implementation schedules and monitoring programs are compatible with ESAP program goals.

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 Internal Reporting – A system of internal progress reporting will be established to verify activity-level compliance. As monitoring programs are initiated results will be incorporated into Northern Gold’s existing record-control systems.  Structured Management Review – biophysical and social monitoring data will take different forms and have different end uses. Northern Gold will establish a review process for monitoring data, incorporating independent internal and/or external review by suitably qualified personnel to verify the integrity and suitability of information maintained in its existing Environmental Management System (EMS).  Change Management – biophysical and social management plans will be adapted to changing circumstances, whether these changes arise from external drivers, such as regulatory changes, changes in existing conditions, a change in processes to enhance effectiveness, such as the application of new technology to improve the efficiency of a process/treatment technology, or a change in concerns in the community. Changes will be managed with the knowledge of the involved parties. 9.1.5 Effectiveness Monitoring and Adaptive Management

The ESAP will be implemented as an adaptive framework. This recognizes the uncertainty in effects predictions, the difficulty in measuring the effectiveness of some commitments, and changing socio-economic conditions throughout the life of mine.

Accordingly, some of the processes and procedures initially developed will be adapted to maintain their effectiveness in light of monitoring results, changes in Project activities and improved understanding of the interrelationships between effects.

The need for adaptation will be identified through what is referred to as ‘effectiveness monitoring’. Effectiveness monitoring is the evaluation of data collected through the ESAP’s various monitoring programs to verify that appropriate indicators are being used, or activities are meeting their intended objective.

Effectiveness monitoring for adaptive management will be ongoing and participatory, involving Northern Gold, affected people, the local level of government and other stakeholders. The involvement of external parties is particularly important

Of additional relevance to the Project’s social management plan is public domain reporting on the effects of resource development projects on communities elsewhere in Russia and internationally. Insights gained from the review of such studies can inform the interpretation of data collected through social management plan activities. Northern Gold will consider the results of such studies as part of its effectiveness monitoring. 9.1.5.1 Compliance Monitoring

The purpose of compliance monitoring goes beyond conformity with current Russian regulatory requirements. It extends to Northern Gold’s performance against commitments documented in the ESIA: Project design and operational elements, management and monitoring plans, mitigation and enhancement commitments and community development initiatives. In overview, compliance monitoring entails:

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 maintaining full human resource records in a form that will permit an annual roll-up of selection, employment, promotion, training and exit statistics on the workforce by residence, gender, level and occupation as a percentage of the total workforce;  maintaining procurement records in a form that will permit an annual roll-up of the number, value and general content of contracts for goods and services by supplier location and ownership, as a percentage of total procurement;  requiring contractors to provide annual reporting on employment and procurement that provides the same information;  maintaining records on health and safety, accidents, breach of worker codes of conduct and other relevant information pertaining to events that occur in direct relation to operations;  flagging anomalous monitoring results for verification and follow-up assessment where warranted;  maintaining records on public education events (such as traffic safety training), including content and participation rates;  maintaining records on delivery of mitigation and benefit enhancement commitments;  maintaining records on community development support, identifying objectives, levels of external involvement, organizations or households in receipt of support and outcomes;  maintaining records on formal consultations, meetings, grievance and dispute events with affected people, the government, Project workers and contractors, noting attendance, concerns raised and resolutions;  maintaining copies of information disclosure materials distributed by the Project; and  undertaking a formal analysis of the results of the above, at least annually, to determine ESAP compliance with documented ESIA related activities, to identify obstacles, areas of concern, systematic successes or failures, and to determine whether process or procedural changes are indicated.

The monitoring programs agreed between Northern Gold and its stakeholders will be implemented by Northern Gold’s staff, with assistance of identified external expertise as necessary. 9.1.5.2 Reporting of Results

Northern Gold will communicate monitoring results internally to staff as appropriate. Where appropriate, the information will be used to adjust policies, procedures and/or effects mitigation and benefit enhancement commitments.

The monitoring results will also be reported annually in an appropriate form and discussed with affected people and all levels of government, including at the national level as applicable, with a view to:  maintain an environment of transparency and accountability;  promote participation of people in decisions with the potential to affect them; and  build confidence in the biophysical and social management performance of the Project relative to Northern Gold’s commitments.

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The results of monitoring, as they relate to the findings of external audits, will be reported to national authorities as applicable. 9.1.6 Inspections and Audits

Northern Gold will conduct annual audits as per Kinross corporate standards. 9.1.7 Communication and Consultation

Northern Gold’s stakeholder engagement is managed through its Stakeholder Engagement Plan, a management document in English and Russian. The Company has conducted annual public consultations starting from 2005 as it related to the Kupol project and therefore has a strong understanding of stakeholders in the wider Chukotka Region. At the early stages of stakeholder engagement, the consultations were focused on the Kupol project operation. After acquisition of Dvoinoye deposit in 2010, annual consultations have included discussion of the new Project as well.

Annual public meetings give updates on various aspects on Company’s activities in Chukotka. The list of reported issues includes:  Operations’ production and performance, plans and exploration;  Overview of socio-economic impact on the territory (taxes, royalties, fees and duties paid to the territory and federal budgets, etc.);  Environmental and social monitoring and results of impact assessments;  Human Resources information (i.e., employment, training and development, bonuses and insurance policies);  Charity and philanthropic aspects of work; and  Summary of Kupol Foundation activities. As summarized in the SEP, since the acquisition of Dvoinoye mine, the main areas of concern have been employment opportunities, perspectives of project development and regional economy impact, further assistance to indigenous people in development of traditional use of natural resources. 9.2 Biophysical Management Plan

This section outlines the management approach to address the Project’s potential effects on the biophysical environment (atmosphere, land, water, ecology). Elements to be incorporated into the detailed design of Project facilities and into Project operations are a key part of Northern Gold’s commitment to mitigating the potential effects of the Project. These design and operational elements were considered in assessing effects of the Project as described in Section 8. Some additional mitigation measures have also been developed to further minimize effects. Collectively these measures, along with comprehensive monitoring, comprise Northern Gold’s commitments to responsible biophysical and social management of the Project.

A biophysical monitoring program will be in place during all phases of the Project and will include detailed monitoring plans for air quality, soils, surface water, groundwater, water quality, and aquatic biology, wildlife and

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vegetation. The scope of the monitoring programs will vary depending on the Project phase. The overall objectives of the biophysical monitoring program are to:  verify effects predictions;  monitor the effectiveness of the proposed mitigation measures;  provide information for use in adaptive management to address potential unforeseen environmental effects; and  demonstrate compliance with current Russian regulatory requirements and voluntarily-adopted international guidelines. 9.2.1 Surface Water Quality Ditching and associated water treatment facilities needs to be constructed early in the construction phase to ensure that site preparation and construction activities do not result in impacts on local water courses. Ditching needs to be maintained during construction, operation and closure to divert storm water to treatment facilities. Regular inspections and cleanouts will be required to maintain the system. Ditching should be inspected after each significant precipitation event, and in spring prior to snow melt.

Sediment traps will be constructed along the Dvoinoye-Kupol Road in natural depressions to prevent suspended matter release to the environment. Sediment traps are to be inspected regularly and repaired as necessary. 9.2.2 Soils Soils, where fertile soils are available that would be suitable for re-use in site restoration need to be stockpiled, and protected from erosion. As noted, these are limited to river valleys at lower elevations and are unlikely to be disturbed by the Project. Spills of fuels need to be contained, and any contaminated soils must be removed and disposed of in the landfill.

Soils are generally of poor nutrient quality and may need to be amended with organic matter prior to use for site restoration. 9.2.3 Air Quality Air emissions controls on operating equipment need to be inspected and maintained as per manufacturers specifications. Dust suppression should be undertaken as needed on site roads, and the Dvoinoye-Kupol all weather road. 9.2.4 Groundwater Spills to soils (fuels, lubricants, reagents) need to be contained during construction and operations, and any spills cleaned up immediately to prevent contamination of soils, vegetation, surface water and groundwater. All active areas need to have spills containment and cleanup facilities available, and personnel need to be trained in their proper use and disposal.

The groundwater monitoring system should be expanded to include:  Inclusion of the water supply wells, drilled in a valley of the Pravy Yarakvaam River, 1.5 km below the existing mine camp, in hydrogeological monitoring system.

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 On sites where taliks were not encountered (wells WC2, WC4 and WC5, see Section 4.6)) additional wells should be drilled to depths of 25-30 m. Considering that taliks are generally less than 20 m in width, the distance from a well to the river should not exceed 10-15 m. Installation of the wells should be undertaken during summer or autumn period when taliks have reached their maximum size and are most readily located.  All wells included in the monitoring system should be equipped as follows: . All wells should be equipped with screens.

. Mouths of all wells should be equipped with the clay/cement lock for prevention of inflow of surface water in wells.

. In designs of wells it is necessary to provide decisions on isolation of the water-bearing horizons from each other. 9.2.5 Biological The impact assessment conducted in Section 8 has shown that due to the nature of the habitat affected by the Project, there will be no significant impact on biodiversity. The rocky upland areas, the sparse wildlife populations in these areas, and the seasonal flow regimes in local streams that preclude permanent fish habitat all serve to reduce biodiversity in the area of the Project footprint. As well, suitable habitat is provided in those adjacent areas with vegetation communities suitable for supporting bird and mammal populations. These, too, are sparsely distributed in the area, and likely account for the low numbers of species and individuals observed in the area (Section 4). Therefore, monitoring of wildlife populations, as would be typical of biodiversity management plans, would be of limited effectiveness. Rather, the biological management plan is developed to focus on those site activities that could affect terrestrial and aquatic habitats off-site. By ensuring that mitigation measures are implemented and maintained in good order, off-site impacts, such as erosion and sedimentation, or incursion of equipment into adjacent habitats can be minimized, and effects on biodiversity avoided. Thus, the biodiversity management plan is addressed through the components of the biophysical management plan that ultimately serve to protect the integrity of the local habitats that in turn are essential in maintaining existing biodiversity of the area.

Boundaries and/or constraints on site areas need to be established to ensure there is no encroachment on adjacent areas. Disturbance of soils and vegetation should be kept to the minimum footprint necessary to conduct the required activity. This will minimize erosion potential, with resultant minimization of turbidity and contaminated soil transport to local water courses, and will also minimize the extent of site rehabilitation measures during closure. Barriers should be constructed where appropriate to keep equipment operating within defined areas. Plant personnel need to be informed of these limits, with field marking/signage and mapping developed as necessary.

Ongoing assessment of habitat use in conjunction with clearing for construction, pit expansion, stockpiles, access roads, etc should be undertaken. This should include identification of critical wildlife habitat (dens, burrows, nests of birds and mammals) and implementation of mitigation where feasible.

Given the low density of wildlife in the area, and the poor resource base, local mammal and bird populations need to be protected. As such, hunting should either be strictly controlled and limited to areas well-removed from the site or prohibited entirely. As well, controls and/or prohibition of pets, and dogs in particular need to be enforced to protect local wildlife.

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Housekeeping and domestic waste management need to be maintained on a regular basis, particularly during the warmer months, to minimize wildlife attraction to the site during operations.

Speed control and driving restrictions on some roads may be necessary to avoid roadkill (as well as for safety reasons).

As noted earlier, sediment controls would need to be implemented, inspected and maintained to avoid off-site habitat destruction. 9.2.6 Summary The management activities summarized in Tables 9.2-1 to 9.2-3 will be supported by detailed plans and procedures. The Environmental Manager will be responsible for the implementation of management plans. Monitoring reports will be prepared and issued periodically to document results of management plans and to inform adaptive management actions. Table 9.2-1: Biophysical Environmental Action Plan - Construction Phase Activity Potential Impact Item No. Mitigation/Management

Air quality - fumes and exhaust from 1 Proper maintenance of equipment to reduce emissions. equipment. Noise from construction equipment 2 Worker protection, as per local regulations. Soil, where available, will be stockpiled and used for site Soil removal 3 restoration upon Closure. Runoff of soils to streams. Spills of fuels Erosion control during construction. and lubricants from vehicles and 4 Spills containment and designated servicing areas. stationary equipment. Site preparation Erosion control during construction. and construction Site excavation effects on groundwater 5 of infrastructure Spills containment and designated servicing areas. Stockpiling of soils and re-seeding of affected areas Removal of vegetation. 6 upon closure. Impacts on terrestrial biota. Removal of Restrict construction activities to defined areas, and habitat through construction and noise. 7 prevent incursions into adjacent areas. Restrictions on Effects of hunting on local populations. hunting Construct surface drainage and sediment controls early Effects of runoff on aquatic biota. 8 in the Project. Dedicated servicing areas for construction equipment. Fumes and exhaust from equipment. 9 Proper maintenance of equipment to reduce emissions. Dust generation Noise from construction equipment 10 Worker protection, as per local regulations. Soils - reduction of metals and others Erosion protection during remediation. On-going 11 compounds monitoring to verify efficacy of remediation. Water Quality - reduction in loading of Erosion protection during remediation, On-going some metals, suspended solids, nitrates 12 monitoring to verify efficacy of remediation Remediation of and sulphate existing open pits and tailings Groundwater - reduction in loading of facility some metals, suspended solids, nitrates 13 Monitoring to verify efficacy of remediation and sulphate. Vegetation - restoration of habitats lost 14 None required during former mining operations Terrestrial Biota - restoration of habitats 15 None required lost during former mining operations Aquatic Biota - improvements in water 16 Erosion protection during remediation. quality

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Activity Potential Impact Item No. Mitigation/Management

Air quality - fumes and exhaust from 17 Proper maintenance of equipment will reduce emissions. equipment Noise from construction equipment. 18 Proper maintenance of equipment. Soil erosion from construction activities. Maintenance of sediment control measures during 19 Fuel spills construction. Spills cleanup Maintenance of sediment control measures during Water Quality - soil erosion, fuel spills 20 Dvoinoye-Kupol construction. Spills cleanup. All-Weather Road Groundwater - fuel spills 21 Proper spills cleanup and disposal Soil erosion, thawing of permafrost, fuel Minimize areas to be cleared, and avoid sensitive 22 spills habitats Terrestrial Biota - habitat loss, vehicle 23 Avoid sensitive habitats, enforce speed limits traffic hazards, fuel spills Aquatic Biota - sedimentation, habitat Time construction to avoid spawning periods. Construct 24 disruption, fuel spills and maintain sediment controls.

TMF at Kupol Addressed in Addendum to Kupol ESIA 25

Table 9.2-2: Biophysical Environmental Action Plan – Operations Phase Activity Potential Impact Item No. Mitigation

Air quality - fumes and exhaust from Proper maintenance of equipment will reduce emissions. equipment. Dust generation from 26 Dust control as needed. vehicles. Noise from vehicles and equipment. 27 Worker protection, as per local regulations. Soils - air emissions from dust and Vehicles to carry spills containment and cleanup vehicle exhaust. Spills of fuels and 28 equipment. Proper maintenance of equipment will lubricants. reduce emissions. Water Quality - Runoff of soils to Vehicles to carry spills containment. Maintenance of Dvoinoye-Kupol streams. Spills of fuels and lubricants 29 sediment controls to limit potential for impacts on water All-Weather from vehicles. quality. Road Groundwater - Spills of fuels and 30 Spills cleanup in fuelling servicing areas. lubricants from vehicles. Vegetation - Dust from vehicles and spills 31 Dust control on roads. Spills cleanup. of fuels and lubricants. Terrestrial Biota - Removal of habitat Limit new incursions into adjacent habitats. Enforce 32 through construction and noise. vehicle speeds. Aquatic Biota - Effects of runoff on Regular maintenance of sediment control measures. 33 aquatic biota. Immediate spills cleanup

Ore Stockpiling at Dvoinoye and Addressed in Addendum to Kupol ESIA 34 Kupol

TMF at Kupol Addressed in Addendum to Kupol ESIA 35

Air quality - dust and fumes from blasting Mitigation to reduce dust from vehicles is included in the 36 and vehicles. design. Underground Noise from blasting and vehicle No additional mitigation required. Workers will need 37 Mine, Ore and operations. protection as per local regulations. Waste Rock Stockpile Soils - dust and spills of fuels and Mitigation measures, such as spills containment and lubricants. 38 cleanup are included in the design. Maintain ditching or Seepage from ore and waste rock berming around stockpiles.

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Activity Potential Impact Item No. Mitigation

Water Quality & Quality - release of toxic Proper maintenance of seepage collection ditches and substances (blasting residues, metals 39 drainage to treatment systems. leaching). Groundwater Quality & Quantity - release Proper maintenance of seepage collection systems will of toxic substances. 40 prevent contamination of nearby shallow groundwater Abstraction of groundwater zones (taliks). Vegetation - dust from blasting. 41 None required Terrestrial Biota - noise and dust from 42 None required. blasting and vehicles. Aquatic Biota - release of toxic 43 Maintain site ditching and collection systems. substances and increased turbidity. Air quality - emissions from support Emissions will need to meet local regulations for worker 44 facilities. exposure. Noise will need to meet local regulations for worker Noise from support facilities. 45 exposure. Soils 46 No impacts on soils expected during operations. Water Quality & Sediments - release of 47 Mitigation measures are incorporated into the design. Site domestic waste water. Infrastructure Groundwater - abstraction of water for 48 Monitor groundwater levels. mine and domestic use. Vegetation 49 Prevent incursions into undeveloped areas. Terrestrial Biota - Noise disturbance. 50 Restrictions on hunting. Hunting. Aquatic Biota - Water quality effects. 51 Restrictions on fishing. Fishing pressure.

Table 9.2-3: Biophysical Environmental Action Plans – Closure and Post-Closure Phase Activity Potential Impact Item No. Mitigation

TMF at Kupol Addressed in Addendum to Kupol ESIA 52

There are no sources to the atmosphere during closure Air quality 53 and post-closure once mining has ceased and ore is no longer trucked to Kupol. There are no sources of noise during closure and post- Noise 54 closure once mining has ceased and ore is no longer trucked to Kupol. Dvoinoye-Kupol Soils - restoration of habitat. 55 None required All-Weather Regular inspections and maintenance of ditches and Water Quality - runoff from plant site. 56 Road sedimentation controls. Groundwater - contamination of ground 57 Remove sources of surface contamination. water. Vegetation - restoration of habitat. 58 Seeding where appropriate. Terrestrial Biota - restoration of habitat. 59 Seeding where appropriate Aquatic Biota - Runoff from plant site. 60 Inspect and maintain ditching. Underground None required. There will be no sources to the Air quality 61 Mine atmosphere from the underground mine upon closure.

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Activity Potential Impact Item No. Mitigation

There will be no sources of noise upon completion of Noise 62 closure activities. During closure, noise will be similar to levels during construction. There are no sources of impact to soils during post- Soils 63 closure. Soils will be re-used during closure for site rehabilitation. Underground working is predicted to freeze. Site Water Quality - runoff from portal area. 64 inspections will confirm whether there is need for Drainage of mine water (if applicable). additional mitigation. Groundwater - mine may affect local None required. No seepage of groundwater is predicted 65 groundwater quantity. due to presence of permafrost. No interaction with vegetation communities is anticipated Vegetation 66 from the underground mine. Terrestrial Biota - loss of habitat area. None required. Water quality will reflect local geology 67 Water quality pit. since no waste rock will remain at surface. Aquatic Biota - water from mine (if None required. Water quality will reflect local geology 68 applicable). since no waste rock will remain at surface. There are no sources of atmospheric emissions during closure and post-closure once dismantling is completed. Air quality 69 Atmospheric emissions sources during closure are similar to construction as dismantling begins and areas are remediated and reclaimed. There are no sources of noise during closure and post- closure after completion of closure operations. Noise Noise 70 sources during closure are similar to construction as dismantling begins and areas are remediated and Servicing and reclaimed. Maintenance Soils - contaminants from operations. 71 Remediation and appropriate disposal. Areas Water Quality - runoff from site areas. 72 Remediation and appropriate disposal. Groundwater - contamination of ground 73 Remediation and appropriate disposal. water. Vegetation - contamination from 74 Restoration and remediation with appropriate disposal. operations. Terrestrial Biota - habitat 75 Site restoration Site restoration and remediation with appropriate Aquatic Biota - runoff 76 disposal. There are no sources of atmospheric emissions during closure and post-closure once dismantling is completed. Air quality 77 Atmospheric emissions sources during closure are similar to construction as dismantling begins and areas are capped or remediated. Noise There are no sources of noise during closure and post- closure after completion of closure operations. Noise 78 sources during closure are similar to construction as dismantling begins and areas are capped or remediated. Accommoda- tions and Offices Soils 79 Sources of contamination will be removed. Water Quality - Runoff from site areas. 80 Regular inspections and maintenance of ditches. Groundwater quality and quantity. 81 None required Vegetation - contamination from Site restoration and remediation with appropriate 82 operations. disposal. Site restoration and remediation with appropriate Terrestrial Biota - habitat 83 disposal. Aquatic Biota - runoff 84 Regular inspections and maintenance of ditches.

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9.3 Monitoring Table 9.3-1 summarizes the monitoring measures that will need to be undertaken in response to the potential impacts identified in Section 8. These are considered with respect to the potential sources of impact, and the applied mitigation measures as described in Section 9.2. Table 9.3-1: Summary of Environmental Mitigation and Monitoring Measures Impact Source Mitigation Monitoring

 Dust collectors to be installed and maintained on equipment if needed.  Regular sampling for particulates, Increased airborne emissions and dust and gases (SOx, NOx, etc) during dust (particulates and metals) from  Dust control on roads as needed. construction, operation and closure. operation of equipment and vehicles  Emissions controls on vehicles and equipment, maintained in good working order.  Noise will be measured at the Exceedance of noise guidelines due boundaries of the Sanitation to equipment operation at night.  None identified. Protection Zones around operational areas as required by Russian Federal Sanitary and Environment Authorities. Alteration of on-site drainage of Site drainage will be restored during Monitoring of precipitation and river storm water and re-use of water on   site. closure. flows during operations phase.  Camp sewage will be treated prior to discharge.  Monitoring of discharges. Reduction in water quality due to Project construction and operation.  Rainfall runoff water will be re-used on site.  Regular inspection and maintenance  Road runoff water will be managed through of sediment control measures. sediment control measures.  Soils will be stockpiled for site rehabilitation during closure. Stockpiles will be protected Disturbance of soils due to Project against erosion.  Regular reporting of soil reclamation construction and operation. measures during all Project phases.  Contaminated soils will be removed and disposed of.  Vegetation removal will be minimized.  Seed banks will be established for Disturbance of vegetation revegetation during closure. communities during construction and  Regular inventories to monitor operation.  Protect sensitive areas where possible. vegetation loss and reclamation.  Re-vegetate disturbed areas during closure or as soon as practicable. Disturbance of wildlife communities  Avoid sensitive habitat where possible.  Regular inventories to monitor habitat during construction and operation  Minimize habitat loss. loss and reclamation.  Re-vegetate disturbed areas as soon as possible to restore habitat.  Limit vehicle collisions through speed limits and driver training.  Restrict hunting and trapping on site.  Implement proper waste management to minimize nuisance species. Disturbance of aquatic habitat during  Minimize construction and operations  Regular monitoring of aquatic all Project phases. impacts of erosion and sedimentation communities. through appropriate best management  Regular monitoring of fish tissue practices. residues.  Avoid in-stream work during critical periods (e.g., spawning).  Treat discharge water as necessary to achieve water quality targets.

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9.3.1 Socio-economics The social elements described in Table 9.3-2 are meant to highlight additional actions to be taken by Northern Gold to reduce negative impacts or lessen business risk. Not all actions described in the narrative on mitigation are included as some elements in the mitigation analysis are already in place. Table 9.3-2: Summary Table of Impact, Mitigation Actions and Indicators. Economy and Employment Sub-topic Action Description Performance Indicator / Output Information disclose as part of Royalties, taxes and profit Disclosure all information on royalties, taxes and periodic social performance sharing profit sharing. reporting. Grievances reported as part of Royalties, taxes and profit Implement and report on the formal third party periodic social performance sharing grievance mechanism.6 reporting. Expand and maintain existing human resources Human resources statistics Employment management policies from the Kupol mine to cover reported as part of periodic social activities of Dvoinoye. performance reporting. Worker grievance mechanism approved. Develop, implement and report on a formal worker Employment Worker grievances reported as grievance mechanism7. part of periodic social performance reporting. Tender documents and contracts Inform contractors of their responsibilities in relation Employment for contractors include references to IFC Performance Standard 2. to IFC PS2. Procurement totals from Monitor efforts to procure goods and services Procurement of local goods Chukotka-based suppliers within Chukotka and report statistics on an annual and services reported as part of periodic social basis. performance reporting. Information on inflation monitoring Monitor regional inflation rates and report on and any changes to salaries Inflation changes to salaries. included in periodic social performance reporting. Kupol Fund activities targeting Monitor Kupol Fund activities targeting vulnerable vulnerable groups included in Inflation groups and report on specific initiatives. periodic social performance reporting. Health, Education and Community Safety Health and education No mitigation. Not applicable. No migrant workers housed in or near existing Migration Not applicable. settlements.

6 As explained in the section on impact mitigation, the third party grievance mechanism is expected to be a mitigation measure to identify all external grievances. It is listed as part of the first impact sub-topic, but is relevant for all impact sub-categories.

7 The worker grievance is similar to the third party grievance mechanism, but as per international requirements, a separate worker grievance mechanism is to be developed and explained to workers at the time of hire.

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Economy and Employment All migrant workers accommodated in isolated and self-contained work camp. Kupol security systems expanded to cover all Updates on security personnel Community safety and facilities and risks related to Dvoinoye Project. arrangements included in periodic security social performance reporting. Security training program Community safety and Human Rights Adherence and Verification Program summarized in periodic social security implemented and updated on an annual basis. performance reporting. Land Ownership and Use Physical displacement No predicted impact; no mitigation. Not applicable. Provide continued support to herding crew based in Community Action Plan Economic displacement Chaun District with fuel, household goods and summarized and disclosed in other supplies. social performance reporting. Indigenous Peoples Continue transparent management of Kupol Fund, Changes to the Kupol Fund Changes on indigenous allowing indigenous communities to participate in charter include in periodic social people livelihoods all social development initiatives. performance reporting. Audit, financial and annual Changes on indigenous reporting of Kupol Fund disclosed Report on all competitions and projects. people livelihoods in periodic social performance reporting.

9.4 Operational Management Plans The Project will develop and implement operational management plans that meet existing Russian legislation and the International Finance Corporation Guidelines for Hazardous Materials Handling for International Projects. 9.4.1 Materials and Waste Management Plan The materials and waste management plan is intended to provide for:  the safe transport, storage and use of potentially hazardous materials;  minimizing the potential for releases;  containing, controlling and remediating a release as soon as practicable;  minimizing waste generation and maximizing the recycling of materials and wastes to the extent practicable;  employee training in hazardous and non-hazardous waste handling;  developing and implementing plans for waste management and disposal; and  making sure there is long-term physical and geochemical stability of wastes within the Project Area. Non-hazardous wastes (i.e., wastes not considered toxic, corrosive, or explosive) that the Project generates will include:  domestic waste;  packaging materials;

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 construction materials;  biosolids; and  used equipment/parts and tires. Hazardous wastes (i.e., wastes considered toxic, corrosive, or explosive) will be disposed in the landfill in accordance with Russian regulations, or outside of the Project Area. Procedures will be developed for the safe storage, transportation and disposal of these materials. Hazardous waste shipped to outside of the Project Area will be accounted for and records maintained of shipping manifests and/or bills of lading. Hazardous wastes include:  pathogenic wastes;  chemical wastes;  hydrocarbon wastes;  pressurized containers and vessels;  used batteries;  used electronic devices; and  mercury-containing lamps or devices. Additional steps will be taken to:  develop a hazardous materials management system consistent with the IFC Guidelines for Hazardous Materials Management (IFC 2007a);  implement a workplace hazardous materials information system, which includes identification of hazardous substances in equipment;  provide training to employees and contractors so that they are familiar with proper hazardous materials handling and labelling practices and appropriate first aid measures;  make material safety data sheets available and accessible at work places where hazardous materials are stored and used;  develop chemical and fuel spill prevention, control and countermeasure procedures;  keep hazardous materials records (including purchasing, warehousing and disposal);  make sure there is secure interim storage of waste destined for transport;  make sure there is correct storage and labelling of waste appropriate to its type/hazard; and  transport and store explosives safely and securely.

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9.4.2 Waste Rock The waste-rock pile will only be used for temporary storage of waste-rock, before using the waste-rock as backfill in the underground mine. The Project will, as a minimum, carry out the following:  design, construct and operate the temporary waste-rock pile in conformance with all applicable regulations and international best practices;  verify on an ongoing basis that the temporary waste-rock pile is constructed and operated in conformance with the approved design; in particular, design slopes and drainage works;  repair on an ongoing basis significant erosion that occurs on the slopes of the temporary waste-rock pile; and  capture any surface runoff from the temporary waste-rock pile.

9.5 Critical Incident Preparedness and Response The Project Site HSEC Managers will develop and maintain a Critical Incident Preparedness and Response Plan (CIPRP), which will cover potential incidents. The overall intent of the CIPRP is to implement processes and promote the necessary culture and competencies to identify, analyse, evaluate and treat environmental incidents throughout the life cycle of the Project. All Project personnel will be familiar with the CIPRP, as well as those plans prepared by their respective organizations. The objectives of the CIPRP are to:  establish a safe environment for all employees, contractors, visitors and neighbours;  implement incident management requirements to recognize, respond to, report on and investigate traffic accidents, spills and other events, including near misses;  establish procedures to conduct Project activities in an environmentally responsible manner consistent with environmental regulations, guidelines and best practices;  identify and manage significant environmental risks;  establish a comprehensive system for managing emergencies and a high degree of emergency preparedness;  respond to emergencies with the primary goal of preserving human life and the safety of emergency response personnel;  contain, where practicable emergencies and their effects within Project Site boundary;  co-operate with external emergency response organizations; and  safely return to normal operations following the unlikely event of an emergency. Implementation of the CIPRP will be the responsibility of the HSEC Department.

Implementation of the CIPRP will involve:

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 distributing copies to individuals designated by the Project manager and placing others at strategic locations, and ensuring that all copies are maintained current;  training all individuals with responsibilities for its implementation;  training all employees in general emergency notification and evacuation procedures at the time of their employment and annually thereafter;  organizing and training an emergency response team in accordance with applicable regulations and codes;  conducting on-site and off-site emergency response training drills for the potential emergencies described below; and  maintaining all emergency equipment, materials and supplies, and ensuring that they are available and in good working order.

The CIPRP will address human-caused emergencies and natural disasters that threaten life, the environment and/or property, and are beyond routine operational control. As a minimum, the CIPRP will address the following:  off-site chemical and/or fuel spill;  on-site chemical and/or fuel spill;  tailing disposal facility (TDF);  precipitation;  earthquake;  vehicle accidents; and  site fires. In developing the CIPRP, Northern Gold will consult the United Nations Environment Programme (UNEP) document, “United Nations Environment Programme’s Awareness and Preparedness for Emergencies at Local Level (APELL) for Mining – Guidance for the Mining Industry in Raising Awareness and Preparedness for Emergencies at a Local Level” (UNEP 2001). In general, CIPRPs are a logical complement to environmental management planning since CIPRPs provide response plans for significant environmental risks identified during project risk assessments. These response plans are intended to pro-actively minimize negative effects in the event of risk occurrence, regardless of root cause.

The goals and priorities of the CIPRP to be developed for the Project include:  identification and management of environmental risks;  pro-active mitigation of risk and potential emergency situations emphasizing occurrence prevention and minimization of effects in the event of occurrence;  implementation of a comprehensive system for managing emergencies;  emergency preparedness on the part of Project staff, to establish rapid and effective response;

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 emergency response that is predicated primarily on the preservation of human life and the safety of emergency response personnel;  containment of emergencies and their effects within facility boundaries;  co-operation with external emergency response organizations;  public awareness of potential risk factors and involvement in emergency preparedness;  return to normal operations based on safety criteria; and  adaptive management of emergency preparedness measures as applicable following post-event review. Personnel will be designated and trained to implement the CIPRP in reaction to inadvertent releases of potentially hazardous substances, or other environmental emergencies that may occur within and outside of the Project Area. In addition to a designated incident commander and emergency response team members, other key staff involved in the implementation of the CIPRP will include operations, environmental, safety and security supervisory personnel. Contractors performing work for Northern Gold will also be required to undergo appropriate training with access to equipment and supplies that will allow them to contain and control any release until the arrival of an emergency response team.

Implementation of the CIPRP will involve:  assignment of defined emergency response responsibilities to individuals reporting directly to Northern Gold management;  organization and training of an emergency response team in accordance with applicable regulations and codes;  establishment of a register of risks and hazards associated with Project activities and substances used and stored within the Project Area;  identification, development and implementation of risk- and hazard-specific processes and procedures;  securing adequate supplies of appropriate emergency equipment and supplies and maintaining these in good working order;  appropriate availability/distribution of version-controlled CIPRP-related documentation;  comprehensive training for all individuals with responsibilities for CIPRP implementation;  integration of emergency response procedural awareness and training in occupational health and safety training for all employees;  incorporation of mechanisms into procedures for community and stakeholder awareness of possible risks and hazards; and  an incident review process. The CIPRP will address operational emergencies and natural disasters that threaten life, the environment, property and/or land or resource use.

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The following sections summarize the CIPRP procedures to be developed to address each of these types of occurrences. 9.5.1.1 Chemical and/or Fuel Spill Outside of the Project Area

The Project will use a number of potentially hazardous chemicals and reagents. The delivery of these substances to the Project Area poses a risk along the entire transportation route due to the possibility of accidents and the associated potential for spills. The procedures for transporting hazardous materials to the Project Area will consider recommendations outlined in the TransAPELL and APELL for Mining documents published by the United Nations Environment Programme (UNEP 2000, 2001; OECD 1997).

To establish preparedness for and response to a chemical and/or fuel spill outside of the Project Area, Northern Gold will:  purchase reagents only from reliable suppliers who use experienced transport contractors;  establish clear lines of responsibility for safety, security, release prevention, training and emergency response in written agreements with producers, distributors and transporters;  engage throughout the handling chain only reputable shipping contractors and shipping companies that have emergency procedures in place, and audit their performance;  require that all drivers be trained in emergency response and that the transport trucks carry appropriate spill containment and neutralizing agents;  require that trucks carrying hazardous payloads travel in convoys and only during the day;  clearly define all transport routes and identify all critical areas, such as sources of community drinking water;  consult with communities and stakeholders along the access roads to make sure that they are aware of the associated risks; and  have a designated co-ordinator to make sure that the authorities are notified should a spill occur. 9.5.1.2 Chemical and/or Fuel Spill within the Project Area

To establish preparedness for and response to a chemical and/or fuel spill within the Project Area, the Project will:  make sure that chemicals in liquid form and fuel are stored in appropriate storage tanks that meet applicable international guidelines;  make sure that storage tanks are placed within containment basins equivalent to 110% of the capacity of the largest vessel within the basin;  develop specific handling, storage, and accidental release procedures and practices for substances used and stored within the Project Area; and  in the event that a major chemical and/or fuel spill occurs within the Project Area and effects outside of the Project Area are anticipated:

. notify the surrounding communities;

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. notify regulatory authorities;

. implement containment, mitigate and rehabilitation; and

. investigate the incident. 9.5.1.3 Fires on or Near the Project Area Northern Gold will maintain the capability to respond to fires on or near the Project Area. To achieve this Northern Gold will:  maintain adequate supplies of water within the Project Area at all times to meet anticipated fire suppression requirements;  develop and implement procedures for making sure that the potential for Project Area and surrounding area fires is minimized on an ongoing basis; and  maintain fire-fighting equipment in good working order. 9.6 Inspection, Audits and Reporting The Project Team, and contractors as appropriate, will conduct ongoing evaluations of environmental program effectiveness and compliance, including, but not limited to daily/weekly inspections as well as scheduled and non- scheduled audits, consistent with the Project procedures.

Audits will be conducted at key Project milestones, as determined by the Northern Gold Project HSEC Manager, and as may be required under Russian Regulations. Correction action plans for any non-compliances will be prepared and implemented. These plans will include, as a minimum, description of the non-compliance, root cause analysis, recommended corrective actions, roles and responsibilities, schedule and as appropriate environmental mitigation and/or compensation measures. 9.6.1 Inspections Inspections against the ESMP and any additional more detailed plans developed under the ESMP will be conducted on a regular basis as deemed necessary by the Project Management Team and/or supervisors. Inspections will be conducted by environmental personnel and/or supervisors and will be documented and submitted to the Northern Gold Project HSEC Manager, who will maintain files of all reports.

Project personnel will be encouraged to continuously inspect their work areas for hazardous conditions and those conditions/work activities that may have unacceptable environmental impact. If corrective action is deemed appropriate, the individual should promptly advise their supervisor or the appropriate environmental manager. 9.6.2 Audits Audits utilize more formal and extensive management system tools than inspections, but have the same intent, i.e., to assess current performance and improve future performance. Audits will compare Project status against Project requirements; commitments, plans, procedures, goals, etc.

Audit results, including non-compliances, will be comprehensively documented in an audit report. For any non- compliance issues that may have the potential to represent high Project risk, the audit leader shall immediately forward these findings to the Northern Gold Project HSEC Manager.

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Audit findings that identify a violation of government regulation/permit requirements shall be immediately forwarded to the Northern Gold Project HSEC Manager. The Northern Gold Project HSEC Manager will ensure proper notification of the applicable government agency.

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This report was prepared by Rein Jaagumagi, Senior Environmental Specialist, and Paul Lawrence, Senior Socio- Economic Specialist. The report has been reviewed and approved by Alex Gordine.

Report Signature Page

GOLDER CONSULTING (RUSSIA)

Alex Gordine Principal, Managing Director

RJ/AG/dh

Company Registered in Russian Federation OGRN 1089847372350 (INN 7841395430)

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REFERENCES Anisimov, O.A. and V.Y. Poliakov. 2003. GIS Assessment of Climate-Change Impacts in Permafrost Regions. In: Permafrost. Phillips, Springman and Arenson [eds.]. Swets and Zeitlinger, Lisse.

BEMA Gold Corp. 2006. Environmental and Social Impact Assessment Kupol Gold Project Fareast Russia. March 2006.

Chapovsky, E.G. [ed.]. 1977. Engineering Geology of the USSR. Vol.4. Far East. M., MGU. Инженерная геология СССР. Том 4. Дальний Восток. / Под ред. Е.Г. Чаповского. – М., МГУ, 1977.

Chukotka Autonomous District (ChAO), 2012. Official Website. Accessed 01/10/12.

DNV, 2010. Trip Report: Socio-economic Analysis and Assessment of the Socio-economic Conditions of Chukotka Autonomous District / Краткий отчет по командировке: Социально-экономический анализ и оценка социально – экономических условий Чукотского Автономного Округа.

DNV, 2011. Social Impact Assessment Related to CMGC Dvoinoye Project, November 2010 – February 2011 / Оценка воздействия на социальную среду в связи с освоением компанией ЗАО «ЧГГК» месторождения «Двойное» Ноябрь 2010 - Февраль 2011.

Ershov, E.D. [ed]. 1989. Geocryology of the USSR. Eastern Siberia and Far East. [Геокриология СССР. Восточная Сибирь и Дальний Восток. / Под ред. Э.Д. Ершова. – М., Недра, 1989]

French, H.M. 1976. The Periglacial Environment. Longman Group, London. 309 p.

Hatch. 2012. Kinross Gold Corporation Dvoinoye Project Feasibility Study Report. Report by Hatch to Kinross Gold Corp. March 2012.

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IMC Montan, 2009. Estimation of Mineral Resources and Reserves of Dvoinoye Deposit and their Classification According to JORC Code System. December 2009.

Kalabin A.I. 1960. Permafrost and Hydrogeology of North-East of the USSR. Magadan, VNII- 1, 1960. Калабин А.И. Вечная мерзлота и гидрогеология Северо-Востока СССР. – Магадан, ВНИИ-1, 1960.

Kinross, 2011A. KINROSS GOLD CORPORATION 2011 UN GLOBAL COMPACT COMMUNICATION ON PROGRESS.

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Romanovsky, V.E. 2004. How Rapidly is Permafrost Changing and What are the Impacts of These Changes? http://www.arctic.noaa.gov/essay_romanovsky.html.

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Shilo N.A. Relief and geological conditions. In: Far Eastern North. Natural conditions and resources of the USSR. M., Nauka, 1970. (Шило Н.А. Природное районирование. В кн.: Север Дальнего Востока. Природные условия и естественные ресурсы СССР. М., Наука, 1970.)

Severnoe Zoloto 2005. The Report on investigation, gold and silver resources evaluation at the flanks and ore body of the zone I up to the +850 m level. The deposit Dvoynoye, 1995-2004. “Severnoe Zoloto”, Pevek, 2005. (Отчет об изучении, оценке запасов коренного золота и серебра фланговых зон и рудной зоны 1 до горизонта +850 м рудного поля месторождения “Двойное” за 1995-2004 г.-ЗАО “Cеверное Золото”, Певек, 2005.)

Severnoe Zoloto, 2011. Sanitary Zone Study for Dvoinoye Groundwater Supply Source, 2011. (Проект зоны санитарной охраны подземного водозабора “Двойное”. “ООО” Северное Золото. 2011

Soucek, D.J. and A.J. Kennedy. 2005. Effects of Hardness, Chloride, and Acclimation on the Acute Toxicity of Sulfate to Freshwater Invertebrates. Environ. Toxicol. Chem. 24 (5): 1204-1210.

Tolstikhn, O.N. [ed.]. 1972. Hydrogeology of the USSR. Vol.XXYI. North-East. Гидрогеология СССР. Том XXYI. Северо-Восток. / Под ред. О.Н. Толстихина. – М., Недра, 1972.

UNDP, 2011A. Human Development Report 2011, Sustainability and Equity: A Better Future for All. New York, USA. 2011.

UNDP, 2011B. National Human Development Report for the Russian Federation, 2011: Modernization and Human Development. Moscow, Russia. 2011

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VNII-1. 2011a. Technical Report. Engineering Surveys and Environmental Studies for Construction of Underground Mine and Infrastructure Facilities at Dvoinoye Deposit. Magadan, March 2011. [ВНИИ-1, «Технический отчет об инженерно-экологических изысканиях по объекту «Строительство подземного рудника и объектов инфраструктуры на месторождении «Двойное», Магадан 2011.]

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VNII-1. 2011c. Technical Report. Engineering and Environmental Survey on the All-Weather Road Kupol- Dvoinoye-Yarakvaam. Magadan, March 2011. [ВНИИ-1 «Технический отчет об инженерно-экологических изысканиях по объекту «Круглогодичная автодорога Купол-Двойное-Яракваам», Магадан 2011г.]

World Bank, 2012. Doing Business 2012: Doing Business in a More Transparent World. Washington, DC. 2011.

Zolotoptoekt 2009. The Report on the exploration works at the Dvoynoye gold and silver deposit with evaluation of its resources as on 01.01.2010. “Zolotoptoekt”, Novosibirsk, 2009. (Отчет о геологоразведочных работах на золотосеребряном месторождении “Двойное” с подсчетом запасов по состоянию на 01.01.2010. “Золотопроект”, Новосибирск, 2009)

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PHOTOS

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FIGURES

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APPENDIX A Closure Plan

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APPENDIX B Geochemical Investigation (sent separately)

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APPENDIX C Air Quality Modeling (sent separately)

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APPENDIX D Baseline Studies Reports (included on CD)

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Golder Consulting (Russia) Mokhovaya Street 18-A, Suite 17N St. Petersburg 191028 Russia T: [+7] 812 579 9972