Nanisivik Mine Closure and Reclamation Plan NiyFs5 mg?oxizk5 xml nlm3n3bsizk5 CanZinco Ltd. February 2002 Volume 1 of 2: Closure and Reclamation Plan CanZinco Ltd. Nanisivik Mine Closure and Reclamation Plan Volume 1 of 2 Closure and Reclamation Plan Prepared for CanZinco Ltd. 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W/3bslt4 w4l3Jxaiq5 wcNw/3Fsif5 w4lQ/sJFi9l wMq9l xs3tbslt4 rNs/3bDbsJ8N3g5; *. hD3N3gcq8iq5 Wdt5 wlxkx3bslt4 kNs5 s?li5 wl5g3ymJj5 ns/slt4; (. x4b3Fz ns/sli gxX4j5 x?tz wl5g3ymli czi5g3 wJic3li !.@% ubu4 gxX4u4; !). gxX4 hD3N3gc3iz W/3bsli wosc3bsli kNs5 wlxk5 s?li5 wl5g3ymJj5 ns/sli. !!. wo/slt4 cspnst5 sdizi4 miCs5 sdy?oxizk5 cspnsbsix3gi4. cspn3bsymwN3ix3g3 nlm3n3bs?oxli xml xCAk5 bomk5 G%H W/E3ymo3t9lQ5. cspn3bscystix3g5 wuz, miCz, ckwo?oxizl kNs5. cspn3bsJ5 ckwoziq5 scsysc5b3ix3g5 kNK5 wuoEp4f5 vtmpq8k5 xml ckwos3b/Exc3iq5. ii Nanisivik Mine Closure and Reclamation Plan Executive Summary The Nanisivik Mine is owned by CanZinco Ltd., a division of Breakwater Resources Ltd. The mine site is located in the Canadian Arctic on northern Baffin Island. The mine site lies on the south shore of Strathcona Sound at approximately 73 degrees north latitude. The environment around the mine site is characterized by cold temperatures, low precipitation, continuous permafrost and largely barren surface soils, which render the mine area poor for vegetation coverage and wildlife use. The Inuit Hamlet of Arctic Bay, population 700, is located approximately 25 kilometres by road west of Nanisivik. Access to the mine site and to Arctic Bay is via scheduled jet air service from Iqaluit. Freight is delivered to Nanisivik and concentrates are exported via ship during the 14-week open water season. The mine commenced operations in 1976. Sulphide ore is mined primarily by underground methods and milled on-site to produce lead and zinc concentrates. The mill operates at a nominal 2,200 tonnes per day. Mine personnel reside in the town of Nanisivik, which was constructed as part of the mine facilities. The town facilities include a school, church, post office, recreation center, dining hall, houses and apartments. Currently, the mine employs 171 people. Closure of the mine is scheduled for September 30, 2002 due to depletion of economic ore reserves. The development of the mine was partially funded by the Government of the Northwest Territories (as it then was) and some of the town facilities and infrastructure are currently owned by the Government of Nunavut (“GN”). These facilities include the church, town water supply, sewage treatment system, housing, the road from the dock to the airport and to Arctic Bay as well as other infrastructure. Reclamation of these GN-owned facilities is the responsibility of the GN. The dock is owned by the Department of Fisheries and Oceans. They use the dock as a refueling and storage depot (also utilizing the mine-owned tank farm). Reclamation or continued use of the dock is the responsibility of the Federal Government. The GN and the Hamlet of Arctic Bay have publicly expressed a strong interest in identifying and implementing plans for the continued use of the town of Nanisivik and some of the industrial buildings. To this end, the GN has issued two Requests for Proposals to identify the possible socio-economic impacts of the mine closure on the Hamlet of Arctic Bay and to identify and evaluate alternatives for continued use of the Nanisivik Mine facilities. Nanisivik Mine shares this interest in identifying alternatives for continued use and has committed to contributing to these projects. Nonetheless, Nanisivik Mine must proceed with reclamation of the mine facilities in a cost-effective manner as described in the Closure and Reclamation Plan and will continue to do so until formal agreements are in place to the contrary. This Closure and Reclamation Plan (the “Plan”) is being filed with the Nunavut Water Board in response to the requirements of the Water License. The Plan describes CanZinco’s approach to closure and reclamation of the Nanisivik site in an efficient manner that follows the “Guidelines for Abandonment iii Nanisivik Mine Closure and Reclamation Plan and Restoration Planning for Mines in the Northwest Territories” dated September 1990 (the “Guidelines”) and that promotes benefits to northern residents. The primary objectives of the Plan are in accordance with the Guidelines, “to prevent progressive degradation and to enhance natural recovery in areas affected by mining”. The reclamation work is focused on utilizing the natural conditions to provide for the secure, long-term closure of the mine site. Reactive mine wastes, such as tailings and mineralized waste rock, will be reclaimed by incorporating them into the permafrost regime either in the underground mine or beneath a cover of inert material. The freezing conditions will prevent contamination of surface water. The required thickness of inert cover to ensure permafrost formation has been calculated to include the estimated effects of global warming. The reclamation activities are anticipated to be completed in two years following mine closure. Options exist to potentially shorten this schedule and these will be pursued, where practical. Some of the specific reclamation measures that will be implemented beginning in October 2002 are: 1. Maintain at least 1 metre water cover over subaqueous tailings. 2. Place a cover of 1.00 metres of shale (thermal insulation) plus 0.25 metres of sand and gravel (armour cap) over exposed tailings. 3. Construct an engineered outflow spillway from the covered tailings area. 4. Relocate mineralized waste rock to the underground mine or to open pits where backfilling is required. 5. Contour and backfill open pits as required to achieve positive surface drainage. 6. Cover residual mineralized material in rock piles or open pits with 1.25 metres of inert material. 7. Dismantle industrial and residential buildings and salvage components of economic value for shipment off site. 8. Dispose of non-hazardous demolition debris and residual scrap materials in the underground mine or in open pits where backfilling is required. 9. Reclaim the landfill with contouring to ensure positive surface drainage and place a 1.25 metre thick cover of inert material. 10. Remediate contaminated soils by covering in-place or by excavation and disposal in either the underground mine or in open pits that require backfilling. 11. Install