Summary Audit Report

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Summary Audit Report SUMMARY AUDIT REPORT for the November 2019 International Cyanide Management Code Recertification Audit Prepared for: Kinross Gold Corporation Chirano Gold Mining Ltd. (CGML) Submitted to: International Cyanide Management Institute 1400 “I” Street NW, Suite 550 Washington, D.C. 20005 FINAL 1 April 2020 Ramboll Canada Inc. 100 Park Royal, Suite 200 West Vancouver, British Columbia, V7T 1A2, Canada www.ramboll.com SUMMARY AUDIT REPORT Name of Mine: Chirano Gold Mine Name of Mine Owner: Kinross Gold Corporation Name of Mine Operator: Chirano Gold Mines Ltd. (CGML) Name of Responsible Manager: Terence Watungwa, General Manager Address: P.O. Box 57, Bibiani Western Region, Ghana Telephone: +233 552 838 283 Fax: N/A E-mail: [email protected] Location detail and description of operation: Kinross Gold (Kinross) Chirano gold mine is located in southwestern Ghana, approximately 100 kilometres southwest of the city of Kumasi. The mine lies within the Bibiani gold belt and consists of several conventional open pit mining sites as well as underground workings. Ore is transported to a centrally located processing plant, where it is crushed and milled before undergoing conventional carbon in leach (CIL) processing. The general location of the Chirano mining operation is shown on the figure below: Page 1 of 46 Cyanide facilities include a warehouse for storage of cyanide reagent in solid briquette form, a cyanide mixing and storage facility, leach tank, CIL processing circuit, a clarifier and tailings box, two lined event ponds, tailings and reclaim water return pipelines, tailing storage facilities (TSFs), reclaim water settling and management ponds, and various other process water control features and connecting pipelines. The Process Plant does not require a detoxification unit. The process is summarised in the flow diagram below. Over the past three years, CGML has operated three tailings storage facilities, TSF 1, TSF North Extension (NE) and TSF 2. TSF 2 was filled to capacity and decommissioned for rehabilitation and closure in 2017. Currently, process tailings are deposited within the re- activated TSF 1 after a 7 m raise (referred to as Stage 7) completed in the third quarter of 2018. TSF 1NE was constructed in 2017, however deposition at this facility has halted while the current expansion (Stage 2) is under construction. CGML is in the process of permitting another tailings facility (TSF 1 South Extension) to provide additional tailings storage capacity to support future operations into 2021. The arrangement of the TSFs are presented in the figure below. Page 2 of 46 Page 3 of 46 SUMMARY AUDIT REPORT Auditors’ Finding The operation is: ■ in full compliance in substantial compliance not in compliance with the International Cyanide Management Code. CGML has experienced no International Cyanide Management Code (ICMC) compliance issues since the last ICMC recertification audit in 2016. Audit Company: Ramboll Canada, Inc. 100 Park Royal, Suite 200 West Vancouver, BC V7T 1A2 Audit Team Leader: Clinton Phaal e-mail: [email protected] Names and Signatures of Other Auditors Technical Auditor: Adrián Juárez e-mail: [email protected] Date(s) of Audit: 4 November 2019 through 8 November 2019 I attest that I meet the criteria for knowledge, experience and conflict of interest for Code Verification Audit Team Leader, established by the International Cyanide Management Institute and that all members of the audit team meet the applicable criteria established by the International Cyanide Management Institute for Code Verification Auditors. I attest that this Summary Audit Report (SAR) accurately describes the findings of the verification audit. I further attest that the verification audit was conducted in a professional manner in accordance with the latest version of the International Cyanide Management Code Mining Operations Verification Protocol; Guidance for Recertification Audits for the International Cyanide Management Code, and using standard and accepted practices for health, safety and environmental audits. Chirano Gold Mine 1 April 2020 Name of Mine Signature of Lead Auditor Date Page 4 of 46 SUMMARY AUDIT REPORT 1. PRODUCTION Encourage responsible cyanide manufacturing by purchasing from manufacturers who operate in a safe and environmentally protective manner. Standard of Practice 1.1 Purchase cyanide from manufacturers employing appropriate practices and procedures to limit exposure of their workforce to cyanide, and to prevent releases of cyanide to the environment. The operation is: ■ in full compliance in substantial compliance not in compliance…with Standard of Practice 1.1 Summarize the basis for this Finding/Deficiencies Identified: CGML has continued to purchase sodium cyanide exclusively from Cyanco Corporation LLC (Cyanco) produced at the Alvin production facility in Texas, USA. Cyanide is procured under written agreement Contract for Purchase and Sale of Sodium Cyanide (Solid) between Cynaco and Kinross Gold Corporation (Kinross) dated 13 June 2017. The contract expires on 31 December 2022. The contract covenants that each part of the supply chain comprising the Cyanco Alvin, Texas production plant, transportation to the Port of Houston, ocean carriers and road transportation in Ghana is to be certified in full compliance with the ICMC and that certification is to be maintained for the duration of the contract. Review of the International Cyanide Management Institute (ICMI) website confirms that the Cyanco Alvin Plant was originally ICMC certified in 2013 and recertified in February 2017. 2. TRANSPORTATION Protect communities and the environment during cyanide transport. Standards of Practice 2.1 Establish clear lines of responsibility for safety, security, release prevention, training and emergency response in written agreements with producers, distributors and transporters. The operation is: ■ in full compliance in substantial compliance not in compliance…with Standard of Practice 2.1. Summarize the basis for this Finding/Deficiencies Identified: Chirano Gold Mine 1 April 2020 Name of Mine Signature of Lead Auditor Date Page 5 of 46 Terms for delivery of solid sodium cyanide are detailed in the Contract for Purchase and Sale of Sodium Cyanide (Solid) dated 13 June 2017 (Purchase Contract). Schedule B details specific purchase conditions and delivery of solid sodium cyanide to the Chirano mine designated storage facility on Incoterms Delivered Duty Paid (DDP). The Purchase Contract allocates responsibility to Cyanco and their contracted transporters for packaging, labelling, storage, transport, unloading, evaluation of routes, safety and maintenance of means of transportation, task and safety training for transporters and handlers, and security and emergency response. Cyanco is also responsible for the addition of dye through a written undertaking. Unloading at the Chirano mine storage warehouse is the responsibility of CGML. 2.2 Require that cyanide transporters implement appropriate emergency response plans and capabilities, and employ adequate measures for cyanide management. The operation is: ■ in full compliance in substantial compliance not in compliance…with Standard of Practice 2.2. Summarize the basis for this Finding/Deficiencies Identified The Purchase Contract dated 13 June 2017 requires that each element of the supply chain is to be certified in full compliance with the ICMC. Cyanco’s supply chain comprises the Cyanco Global Ocean Supply Chain and North American Rail & Truck Supply Chain for transport of cyanide from the Alvin production facility to the Port of Houston and departure from the Port of Houston to Port of Tema. Transporter partners forming part the supply chain include Action Resources Inc, Quality Carriers Inc and TransWood Inc for road transport to the Port of Houston and ocean transport by Maersk or MSC with receipt at the Port of Tema. Review of the ICMI website confirms that the Global Ocean Supply Chain was initially certified in March 2013 and last recertified in January 2018; and the North American Rail & Truck Supply Chain in October 2018. USA transporter partners were certified as follows: TransWood Inc in December 2019, Action Resources Inc in December 2018 and Quality Carriers Inc in December 2017. Vehrad Transport and Haulage Limited (Vehrad) is contracted by Cyanco for road transport from the Port of Tema to CGML. Vehrad’s initial date of certification was July 2008 with recertification most recently completed in January 2018. Chain of custody records are retained by CGML and comprise Bills of Lading and Way Bills provided for each consignment and all solid sodium cyanide orders are tracked by JD Edwards resource planning software. Records confirm the transport route from the point of origin at the Cyanco Alvin production plant to the receiving point at the Chirano Mine. Chirano Gold Mine 1 April 2020 Name of Mine Signature of Lead Auditor Date Page 6 of 46 3. HANDLING AND STORAGE Protect workers and the environment during cyanide handling and storage. Standards of Practice 3.1 Design and construct unloading, storage and mixing facilities consistent with sound, accepted engineering practices and quality control and quality assurance procedures, spill prevention and spill containment measures. The operation is: ■ in full compliance in substantial compliance not in compliance…with Standard of Practice 3.1. Summarize the basis for this Finding/Deficiencies Identified: Facilities for unloading, storing and mixing of cyanide have not changed since the 2016
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