APPROVED. MGDT expert: …………………………………………………………………………….Nyamdavaa.G /signed and stamped/ MGDT refree expert:………………………………………………………………………………….Jamyankhuu.N /signed/ BOROO GOLD LLC “HEAP LEACH PROJECT” DETAILED ENVIRONMENTAL IMPACT ASSESSMENT ADDENDUM Executed company; “ GLOBAL ENVIRON“ LLC, Executive Director; ………………………….Davaasuren.Ch /signed and stamped/ Project Proponent; “BOROO GOLD “ LLC, President and Executive Director; …………………John Kazakoff /signed and stamped/ Ulaanbaatar 2015 CHAPTER ONE. BACKGROUND The main purpose of detailed environmental impact assessment is to define and assess potential social, environmental and health impacts of a specific project implemented by a citizen or an entity in a certain area, and to define measures to prevent from and mitigate the impacts. Within the framework of a detailed environmental impact assessment of Heap leach project implemented at Boroo mine site of Boroo Gold LLC, our specialists conducted assessment of prevention and mitigation measures taken on potential social, environmental and health impacts. Moreover, they have worked with aim to define further potential impacts, ways of impact mitigation, as well as provided professional and methodical recommendations to project implementors on environment and landscaping. TETRE TECH company of Colorado (USA), MOORE WATSON company of Scotland (Great Britian) and “Gan kharsh” LLC (Mongolia) have been conducted the construction design of the project in 2008 that has been approved by state expertise and the construction has been handed over to the State commission. The Mining Institute of the University of Science and Technology developed the Feasibility Study Report of the project that has been approved by specialized committee of Mineral resources in April, 2009. The mine was approved with an act of State commission. On December 14 2013, Addendum for Feasibility study report of Boroo gold open-pit mine operation and heap leach project situated within Bayangol and Mandal soums of Selenge aimag prepared by Mining Institute has been discussed and approved by Mineral resources specialized committee of MRAM. The purpose of the project is to recover 4407 kg of gold through processing 9.8 tons of low- grade ore with heap leaching method, as processing low-grade ore through Boroo Gold processing plant is economically insufficient. Research on processing Boroo mine low-grade ore by heap leaching method started from 2005. Samples were sent to Australia and the USA for roll and column tests; moreover, pilot test has been started at Boroo mine site. Due to satisfactory results of the tests, separate low-grade ore stockpiles have been created from the end of 2005. Heap leach facility construction work has been conducted in 2007-2008. Permission for pilot heap leach ore processing has been granted in April 2008, and the pilot operation has been commenced in June 2008 and completed in May 2009. The main purpose of heap leach pilot operation was to define whether recovery can reach the planned amount and to ensure that production can go on regular basis, especially in winter time. Despite the pilot operation brought good results, heap leach stockpile and gold bearing cyanide solution have been rinsed with clear water due to delay of issuance of permission to use the technology. These measures have been taken in order to protect the environment, as well as to sustain further normal operation preventing pipeline damages and freezing. In order to perform a detailed environmental impact assessment in accordance with appendix 2 of order A-11 “Environmental impact assessment guidelines” issued by Minister of Environment and Green Development on January 2014, project documents and specifics, feasibility study report, design parameters and layouts of the project has been studied in detail. Topographic map of the project area and its vicinity, air and satellite images has been prepared in accordance with general environmental impact assessment summary; moreover, location of the project, project implementation area and other objects are shown on above mentioned maps and images. Scope and features of Boroo mine heap leach techniques and technology, economic efficiency and primary and supporting activities have been defined. Moreover, environmental analysis has been conducted and main and potential impacts have been defined. Vital part of the environmental impact assessment is to define environmental components under impact of project activities, as well as to define potential impacts on local residents, their social status, cultural and historical heritage and ecosystem components, introduce the project and the detailed environmental impact assessment to Citizens' Representatives' Meeting of Bag and plan project operation by integrating it with feedbacks of local authority and residents. Main impacts caused by project operation include 33 ha area disturbed during development of heap leach pad, dust generated from use of heavy duty equipment at heap leach, content of cyanide and other chemical substances that may evaporate in air or infiltrate into soil from the heap leach stockpile, pollution of soil and vegetation caused by leakage of oil products and lubricants, noise pollution and fire caused by careless action. Details for estimation of dust impact caused by project operation are included in chapter 4, and mitigation measures are included in chapters 5 and 7. In order to perform detailed environmental impact assessment, meeting has been held with local authority, soum and bag governors, the chairman of the Bag’s citizens' representatives together with the project implementer and the project has been discussed with Bag’s citizens' representatives hural in accordance with the order of ensuring public participation in environmental impact assessment. Davaasuren.Ch, a senior teacher of Physics from University of Science and Technology’s Applied Science School, Dr. Dorjgotov, a chemist, a senior teacher from University of Science and Technology, Munkhbat.G, a soil scientist, Tungalag.J, a botanist, a teacher from National University of Mongolia (NUM) and Jargalsaikhan, a zoologist, a teacher from NUM are participated in detailed environmental impact assessment conducting fieldwork studies, measurement and sampling and defined environmental baseline condition and prepared the environmental impact assessment report. “Boroo Gold” LLC “Heap Leach” Project Detailed Environmental Impact Assessment Addendum 2015 CHAPTER II. SCOPE OF OPERATION Below are environmental legislative documents related with actions reflected in DEIA and Heap leach project activities of Boroo Gold LLC implemented within the Bayangol soum territory of Selenge aimag. Following legislation and regulations should be followed. 2.1. LAWS OF MONGOLIA Law on Environmental protection, 1995 Article 1. Purpose of this law The purpose of this law is to regulate relations between the State, citizens, business entities and organizations in order to guarantee the human right to live in a healthy and safe environment, an ecologically balanced social and economic development, the protection of the environment for present and future generations, the proper use of natural resources and the restoration of available resources. Articles and provisions related to project activities Background CHAPTER TWO. ENVRONMENTAL ASSESSMENTS, DATABANKS AND RESEARCH Article 7. Environmental assessments 1. Natural resource assessments and environmental impact assessments shall be conducted in order to preserve the natural state of the environment, to develop and carry out activities aimed at sustaining environmental balance, and to regulate the use of natural resources. Article 9. Environmental impact assessments 1. (This paragraph has been annulled by the law of January 22 1998) Within the 2. Issues related with environmental impact assessment shall be framework of regulated by law. (This paragraph has been amended by law of January 22 entire project 1998) 3. The body requesting the assessment shall meet the costs of it. 4. Citizens, business entities and organizations implementing proposals, shall comply with the requirements determined by the impact assessment. (This paragraph was amended by the Law of January 22 1998) Article 101. Environmental auditing 1. Environmental auditing shall be conducted by business entity and organization engaged in industry and services using natural resources once in two years, conclusion and recommendations shall be issued and the report shall be sent to aimag and city environmental agency within the period Global Environ LLC 1-31 “Boroo Gold” LLC “Heap Leach” Project Detailed Environmental Impact Assessment Addendum 2015 indicated in recommendation. 2. Business entity and organization is in charge of costs of planned environmental auditing; however, if Governor or state central administration body in charge of environmental issues consider that unplanned auditing is required, costs shall be paid by the requester. Article 4. Environmental protection 4.2.1. to comply with environmental protection legislation Article 31 Duties of business entities and organizations Business entities and organizations shall have the following duties in respect of environmental protection: 1) to comply with environmental legislation, decisions by the Government, local self-governing organizations and Governors, and the requirements of State inspectors and rangers; 2) to comply with environmental standards, limits, legislation and procedures approved by authorized organizations and to supervise their implementation