Montem Resources Operations Ltd. PO Box 610, 7720 17 Avenue Coleman, Alberta T0K 0M0 montem-resources.com

26 April 2021

Prairie and Northern Region Canada Place Suite 1145, 9700 Jasper Avenue Edmonton, AB T0L 1Y0

Attention: Tara Fulton, Team Lead

Dear Ms. Fulton,

RE: Montem Resources Tent Mountain Mine – Response to Designation Request from Ktunaxa Nation Council dated April 1, 2021

Montem Resources Alberta Operations Ltd. (“Montem”) is in receipt of correspondence dated April 1, 2021 from the Ktunaxa Nation Council (“KNC”), on behalf of the Ktunaxa Nation (“Ktunaxa”), to the Impact Assessment Agency of Canada (“IAAC”) requesting that the Tent Mountain Mine Project (the “Project”) be designated for federal review in accordance with section 9(3) of the Impact Assessment Act.1

Montem respects the Ktunaxa’s rights and interests in the area of the Project as well as the concerns raised by the KNC. Montem has commenced engagement with the KNC to better understand how resumption of mining at the Tent Mountain Mine site will potentially impact the Ktunaxa and to ensure that any impacts to their rights and interests are addressed. Montem reiterates its request that the Project not be designated for the detailed reasons set out below including:

1. The Project is the restart of a small, existing mining operation on a previously disturbed brownfield mine site, with a relatively short duration (approximately 14 years) with a production capacity of less than 5,000 tonnes per day. It is not a new mine or a large expansion that would warrant federal designation;

2. The Project is an existing and permitted operation with mining activities that currently cross the provincial boundary between the Province of Alberta and the Province of . The Project is proposing to reactivate and complete the previous operations area, which includes a small area crossing the provincial boundary. No federal authorizations have been required, or are now required, to mine across the boundary;

1 SC 2019, c 28,s 1. 1

Montem Resources Alberta Operations Ltd. PO Box 610, 7720 17 Avenue Coleman, Alberta T0K 0M0 montem-resources.com

3. No other federal permits or authorizations are required for the Project. Further, no adverse effects to areas of federal jurisdiction are anticipated including adverse effects to fish and fish habitat, species at risk, migratory birds or Indigenous peoples or their rights or interests; and

4. Given the small and limited duration of the Project, it should not, and cannot afford to, be unduly burdened by a federal review process. Designating the Project for federal review could irreparably impair investor confidence and lead to abandonment of this Project.

A. Scope of the Project in British Columbia

Tent Mountain is a small, existing brownfield development located approximately 16 kilometres (“km”) west of Coleman in Alberta (“AB”) and 35 km east of in British Columbia (“BC”). Access to the property is via historical mine road that intersects the Crowsnest highway.

The majority of the Project is located in AB with a small portion (approximately 12%) located in BC. Tent Mountain Mine leases covers approximately 1,931 hectares (“ha”), with the majority of the mine located in the Municipality of . Approximately 225 ha of the mine permit area is located in BC. Approximately 363 ha of the total area is currently disturbed with a combination of open pit workings, storage areas for overburden and waste rock materials, and water management infrastructures. See Attachment “A” Map.

The proposed load out facility will be located on private lands (i.e. an existing Canadian Pacific rail yard) in an existing industrial area in the area of the AB/BC border. Following all applicable processes and engagement, an application for approval to construct and operate the load out facility will be submitted to the BC Ministry of Environment and Climate Change Strategy within the next year.

The resumption of mining at Tent Mountain will commence within the existing permitted AB Mine Permit C85-16G. In approximately 7 to 8 years, mining will move to the permitted area under the existing BC Mine Permit C108. At that time, amendment applications under the BC Mines Act2 and the Environmental Management Act3 will be required to commence mining in BC. As the activity proposed on the BC side is significantly below the threshold criteria for an environmental impact assessment (“EIA”) under the BC Environmental Assessment Act4, a separate EIA for activities on the BC side is not anticipated.

2 RSBC 1996, c. 293. 3 SBC 2003, c 53. 4 SBC 2018, c 51. 2

Montem Resources Alberta Operations Ltd. PO Box 610, 7720 17 Avenue Coleman, Alberta T0K 0M0 montem-resources.com

The existing operating approval for Tent Mountain under the Alberta Environmental Protection and Enhancement Act5 (“EPEA”) Approval #47679 for Tent Mountain governs the operations within the mine permit and the road leading to the mine site on the Alberta side. The EPEA approval requires certain amendments prior to operations re-commencing.

In January, 2021, the Alberta Energy Regulator (the “AER”) determined that an environmental impact assessment (“EIA”) would be required under EPEA for the resumption of mining activities and the new Coal Handling Processing Plant (“CHPP”) being proposed. Montem is currently preparing the EIA studies and intends to submit an integrated application for all requisite approvals and amendments in 2021. The EIA will include a cumulative effects assessment, which will also identify potential impacts and mitigation measures from the Project in BC.

The EIA and Cumulative Effects Assessment (“CEA”) approach and methodology will follow the Terms of Reference (“TOR”) currently being developed and will be issued by the AER and comply with all applicable provincial legislations. The integrated application will incorporate project background, all mining activities (e.g., operational to closure planning, mining equipment) within the current permit boundary, a comprehensive summary of the required environmental and technical assessments (e.g., water (quality and quantity), fish and fish habitat, vegetation, wildlife, socio-economics, noise, etc), as well as a summary of the required environmental management and monitoring programs.

The CEA will examine the spatial and temporal extent of those effects of the resumption of mining and the construction/operation of the new CHPP. Other projects, both in the nearby British Columbia mining region of the Elk Valley and in the downstream areas of the Crowsnest Pass (AB), will be considered in the assessment process and any cumulative effects will be identified and mitigated.

The integrated application will also include a modern, updated reclamation plan, which Indigenous groups will have the opportunity to provide input and actively participate in. Consultation with Indigenous groups, including the Ktunaxa, over the life of the Project to further refine the reclamation plan is both a responsibility and a priority of Montem’s. Montem believes, once reclaimed, the previously-disturbed mine site will be left in a significantly better ecological state and provide better access to Indigenous groups than it does today.

5 RSA 2000, c E-12. 3

Montem Resources Alberta Operations Ltd. PO Box 610, 7720 17 Avenue Coleman, Alberta T0K 0M0 montem-resources.com

B. Reasons Why Tent Mountain Should Not Be Designated

Pursuant to section 9(1) of the IAA, the Minister may designate a physical activity that is not prescribed by the Physical Activities Regulations6 if the Minister is of the opinion that either the carrying out of that physical activity may cause adverse effects within federal jurisdiction or adverse direct or incidental effects, or public concerns related to those effects warrant the designation. Before making the order, the Minister may also consider adverse impacts that a physical activity may have on the rights of the Indigenous peoples of Canada, including Indigenous women.

At the outset, it should be noted that, the Project is a small mine and below both thresholds for a designated project set out in Schedule 2 of the Physical Activities Regulations i.e. below the 50% area threshold as well as below the coal production capacity threshold of 5,000 tonnes per day.

Many of the projects designated under section 9(1) of the IAA fall below one of the thresholds but not both. Tent Mountain falls below both thresholds. Tent Mountain’s production capacity is also significantly smaller than the last two coal mines designated for federal review (i.e. Teck Resources Castle Project at 27,400 tonnes per day and Vista Coal Mine Phase II Expansion at 18,683 tonnes per day).

In its letter, the KNC suggests that the production capacity for the Project was deliberately set below the threshold in order to avoid a federal review. This is not the case. The Mine operations were designed to release the maximum daily rate over the anticipated operating schedule and are dictated by the design capacity of the CHPP. The capacity level is based on work conducted by the independent engineering company Sedgman Canada Ltd. that specializes in coal handling and plant design. The design calls for maximum operations of 7,200 hours per year, with remaining hours being required for maintenance, and will peak at a raw coal feed rate of just under 1.8 million tonnes per year. This design sets the plant capacity at a maximum of 4,925 tonnes of raw coal feed per day. The mine, mobile equipment and raw coal handling facilities are designed to accommodate this production capacity. Further, the KNC argues that the Project description fails to properly differentiate between reclaimed and brownfield disturbance area, and that “if reclaimed areas are treated as new disturbance, the new disturbance area is likely closer to the 50% requirement provided in section 19(a) of the Schedule to the Physical Activities Regulation. The area threshold criteria identified in section 19(a) of the Physical Activities Regulation is triggered if the expansion of a coal mine results in an increase in the area of mining operations of 50% or more and is over the 5000 tonnes per day threshold. As noted above, approximately 363 ha is currently disturbed with a combination of open pit workings, storage areas for overburden

6 SOR 2019-285. 4

Montem Resources Alberta Operations Ltd. PO Box 610, 7720 17 Avenue Coleman, Alberta T0K 0M0 montem-resources.com

and waste, and water management infrastructures. The proposed Project requires an additional 144 ha of new mining and infrastructure areas. The purpose of setting out the thresholds in the Physical Activities Regulations is to capture new coal developments or large expansions of existing mines for federal review. It is not the purpose of the IAA to designate every project in Canada for federal review. There is clear, unambiguous language used in the IAA and the Physical Activities Regulations that sets out the circumstances in which a project may be designated for federal review. Even when exercising discretion, the Minister must pay heed to these thresholds as otherwise development is subject to unnecessary and duplicative regulatory burden that does not add value to the process.

C. Transboundary Effects

In its correspondence, KNC raises several concerns regarding transboundary effects including adverse effects from mine contaminants (specifically selenium) to the Elk Valley watershed, the Koocanusa reservoir and transboundary effects into the USA.

KNC correctly notes that components of the Project cross provincial boundaries. Specifically, the existing mining disturbance of the Tent Mountain Mine currently includes pits, mine infrastructure and waste rock storage area on both side of the provincial boundaries. The resumption of mining at Tent Mountain within BC will create only a small area of new, additional disturbance to the transboundary area. The new load out facility, which is also located in the area of the AB/BC border will be located entirely on private lands and within an existing industrial area.

At no time during operations or upon completion of the Project will any interprovincial or international transfer of water occur. During operations, the proposed water management strategies and infrastructures will ensure that surface water is directed to the appropriate drainage basin on either the AB or the BC side of the provincial border. Further, no additional adverse effects to water quality or quantity are anticipated from the Project and therefore, no additional adverse effect to the Elk River, the Kookanusa reservoir or transboundary effects into the USA are expected.

D. Potential Effects to Water Quality and Fish and Fish Habitat

In its correspondence, KNC raised concerns regarding the potential for the Project to impact fish and fish habitat due to impacts on water quality through the discharge and surface run off from the existing Corbin settling pond into Michel Creek, a tributary of the Elk River. KNC also raises the concern for the additional adverse effects to the core habitat of the Westslope Cutthroat Trout and Bull Trout in Michel Creek, the Elk River and the Fording River.

5

Montem Resources Alberta Operations Ltd. PO Box 610, 7720 17 Avenue Coleman, Alberta T0K 0M0 montem-resources.com

A primary focus of the Project’s water management will be to capture all mine affected water. The surface water from the mine site will be captured and treated when required and will not be released until it meets or exceeds applicable water standards.

Montem will continue to utilize the existing Corbin Pond, licenced under PE-03986, to comply and manage the waste water being released from the suspended operations into Michel Creek. See Attachment “A” Map.

As part of the resumption of mining into BC, Montem will be proposing additional water management activities to ensure that all mine waste water releases into Corbin Pond meet permit conditions. . It is anticipated that an application to amend PE-03986 under the BC Environmental Management Act will be made within 3 to 5 years. Additional studies on Michel Creek will be conducted at that time.

Montem is aware of Teck’s Elk Valley Water Quality Plan, Implementation Plan Adjustment and various local and regional on going programs and is committed to full participation in those programs, as appropriate.

Finally, the Project will not result in the death of fish or the harmful alteration, disruption, or destruction (HADD) of fish habitat and will not require any permits or authorizations under the Fisheries Act. An offsetting plan is therefore not considered to be necessary in order to fully mitigate potential adverse effects to fisheries resources. However, Montem is committed to undertaking the Project in a manner that does not contravene the Fisheries Act and will consult with Fisheries and Oceans Canada to ensure compliance with federal regulations.

E. Cumulative Effects

KNC is further concerned regarding the accumulation of effects in the Elk Valley. The KNC points to the accumulation of effects due to the large number of coal mines in the Elk Valley, Elk River and Michel Creek. The KNC is concerned about additional habitat fragmentation and high road and stream crossing density located to the valley, including the discharge of selenium and other contaminants to the watershed.

In terms of cumulative effects, the draft Terms of Reference for the provincial EIA requires a comprehensive assessment of the cumulative effects of the Project. Accordingly, the EIA for the Project will be preparing a comprehensive CEA that complies with applicable CEA methodology and provincial requirements.

The CEA will examine the spatial and temporal extent of the effects from the Project in combination with effects from other projects, both in the downstream areas of the Crowsnest Pass and in the nearby British Columbia mining region of the Elk Valley. The assessment will

6

Montem Resources Alberta Operations Ltd. PO Box 610, 7720 17 Avenue Coleman, Alberta T0K 0M0 montem-resources.com

include an assessment on local infrastructure and services to the residents. Any cumulative effects will be identified and appropriately mitigated.

F. Potential to Impact the Ktunaxa’s Section 35 Rights In its correspondence, the KNC raises concerns regarding potential impact to the Ktunaxa’ rights and interests including loss of opportunity to carry out cultural practices and harvesting activities in both the Project area and the surrounding area; loss of access to and sensory disturbance impacting preferred places, preferred species and resources, etc.; and loss of Ktunaxa cultural, historical and archaeological sites due to land disturbance associated with mine development.

Montem acknowledges that the location of the existing Tent Mountain Mine is in an area that is of importance to the Ktunaxa, where the Ktunaxa holds Indigenous rights that are recognized and affirmed by the Constitution Act, 1982, and where members of the Ktunaxa are engaged in the ongoing practice of Ktunaxa rights through the use of the lands and resources. Montem also acknowledges that the Ktunaxa has a strong cultural heritage associated with the Project area and Elk Valley that includes language, knowledge, sacred values, sense of place, intergenerational transmission of knowledge and practices, and other values of importance.

Montem has commenced engagement with KNC and the Nation and will continue to engage in order to understand and address their concerns and to assess potential impact to their rights and use of the land and resources.

Montem plans to actively engage KNC in the EIA process and through the BC applications for the Project and will provide meaningful opportunities for KNC to express its concerns regarding the baseline studies and assessment of potential effects in all discipline areas (water quality, fish and fish habitat terrestrial, wildlife, air, etc.). In particular, KNC will be engaged as part of the CEA, which includes potential impacts to the Elk River watershed. The KNC will also have the opportunity to participate in the AER regulatory review process for the Project.

Montem is also providing the opportunity for KNC to provide input into and participate in the reclamation planning for the Project to facilitate a return of their access and enjoyment of these lands upon completion of the Project.

In addition, and as described above, Montem anticipates applying for amendments to its current BC approvals including BC Mine Permit C-108 and Effluent Permit PE-3986. These amendment applications will require additional engagement with KNC and Crown consultation by the BC Ministry of Energy, Mines and Low Carbon Innovation and the BC Ministry of Environment and Climate Change Strategy.

Finally, Montem wishes to convey that potential adverse direct or incidental effects from the Project to the Ktunaxa’s rights and interests, and to the Elk Valley watershed are anticipated to

7

Montem Resources Alberta Operations Ltd. PO Box 610, 7720 17 Avenue Coleman, Alberta T0K 0M0 montem-resources.com

be minimal. However, Montem understands that the KNC has valid concerns related to the Project and will continue to work towards resolving those concerns with the community.

Conclusion

Montem is of the view that the Project should not be designated under section 9(1) of the Impact Assessment Act. The Project is undergoing comprehensive provincial EIA and AER processes. Any potential for adverse direct or incidental effects, or public concerns related to those effects will be accounted for and addressed by these processes. Montem also believes that any potential impacts on Indigenous peoples and their rights, and the specific concerns raised by the KNC will be accounted for and addressed by the provincial EIA and AER processes.

Further, the Project must comply with existing provincial legislative mechanisms including Alberta’s Water Act,7EPEA, Wildlife Act and Coal Conservation Act, the BC Mines Act, the BC Environmental Management Act and all federal legislative mechanisms including the Fisheries Act, Migratory Birds Convention Act,8 and Species at Risk Act. Any concerns that may have potential to fall within federal jurisdiction will be captured by these legislative mechanisms and the provincial EIA and AER processes.

We trust the above is in order however, should you require any further information, please contact the undersigned.

Sincerely,

Shireen Ouellet, Director of Environment and Regulatory

Montem Resources Alberta Operations Ltd. PO Box 610, 7720 17 Avenue Coleman, AB T0K 0M0 Phone: ([email protected])

Enclosure

7 RSA 2000, c W-10. 8 RSA 2000, c C-17. 8

C 85-16G

Alberta British Columbia Tent Mountain Mine

CL 389283

k e e r Corbin C t DL 4589 Pond n e T

Corbin Road Creek d oo Andy G

M ic h el Cre e k Coal Mountain Rail Loop

^ ^ ^

Attachment A: Location of Corbin Pond at Tent Mountain Mine.