Nomination for 2014 Hardrock Mining Reclamation Awards Colorado Mined Land Reclamation Board Colorado Mining Association

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Nomination for 2014 Hardrock Mining Reclamation Awards Colorado Mined Land Reclamation Board Colorado Mining Association Nominee: Permit: Climax Molybdenum Company Climax Mine Highway 91 Fremont Pass Climax, CO 80429 M-1977-493 Achievement: Property Discharge Water Treatment Plant Summary: After resuming mining and milling operations in 2012, Climax Molybdenum Company - Climax Mine (Climax) needed to replace its system of Stage 2 metals treatment using the inactive Mayflower tailings storage facility. Following a feasibility study and extensive pilot testing, the Property Discharge Water Treatment Plant (PDWTP) was designed, constructed and commissioned. The PDWTP represents an outstanding environmental protection measure for longterm water quality protection. The PDWTP is a fully-automated, state-of-the-art facility with redundant process controls that was constructed over a two-year period at a cost of approximately $200MM, including related infrastructure. The PDWTP began discharging treated water to Tenmile Creek in July 2014, and is the newest component to the Climax site-wide water management system to ensure protection of Tenmile Creek during mining and post reclamation. Contact: Raymond Lazuk, Environmental Manager Climax Mine Highway 91 Fremont Pass Climax, CO 80429 719-486-7584 raymond_lazuk@fmi.com

Nomination for 2014 Hardrock Mining Reclamation Awards Climax Mine PDWTP BACKGROUND - WATER MANAGEMENT AT CLIMAX MINE The Climax Mine (Climax) is a molybdenum mine owned and operated by the Climax Molybdenum Company and located at Freemont Pass (elevation 11,300 feet) on the Continental Divide 12 miles northeast of Leadville Colorado. Climax began in 1918 and operated until the mid-1980s, when operations were substantively curtailed due to global market conditions. Following construction of new and refurbished facilities, Climax resumed full-scale mining and milling in 2012. The mine and related facilities are situated at the top of the Continental Divide and at the headwaters of the East Fork Arkansas River, East Fork Eagle River, and Tenmile Creek. Due to its location and elevation, Climax has a positive water balance consisting of snow melt and mine drainage from historic activities. Climax collects and treats impacted water and discharges to Tenmile Creek under CDPS Permit CO0000248, originally issued to Climax in 1974. Acid rock drainage (ARD) occurs at Climax due to oxidation of pyrite (FeS2) exposed to storm water throughout the mine and is a primary driver for water treatment. This oxidation produces low ph water, which then mobilizes other metals within the rock. Major metals in Climax mine drainage are manganese, aluminum, and iron and minor metals are zinc and copper. During operating and non-operating periods, water management and water treatment at Climax have remained integral to environmental protection and site reclamation. Water quality protection measures at Climax consist of a combination of recycling process water, use of clean water interceptor canals to prevent contact with mineralized rock, treating and discharging mine drainage under a CDPS permit, spill prevention measures, storm water management and controls, and reclamation of historic and inactive mine areas. In addition to the miles of clean water interceptor canals, the water management system at Climax includes 42 miles of pipelines, 8 pumping stations and 25 fulltime staff for water management operation and maintenance. Water treatment has evolved at Climax since the early 1970s with the construction of the sitewide interceptor canal system to separate impacted from non-impacted water, construction of the first generation water treatment plant, and utilizing tailing storage facilities (TSFs) for lime addition. Major upgrades to the system occurred in 1998 with addition of a new lime slaking 1

system and implementation of two-stage treatment. At that time treatment was improved by raising the ph in Tenmile TSF to between 6 and 7, which became Stage 1 metals removal for iron, aluminum and copper. Stage 2 metals removal treatment was then accomplished utilizing the Mayflower TSF operating at ph of 10, primarily removing manganese with traces of zinc and lead. In 2007 the Sludge Densification Plant (SDP) was constructed to further upgrade treatment effectiveness for Stage 1 using the High Density Sludge (HDS) process. In 2011, a feasibility design was completed to replace the Mayflower TSF for Stage 2 metals removal with the new Property Discharge Water Treatment Plant (PDWTP), and the decision was made to begin construction in 2012. PDWTP PROJECT OUTSTANDING IMPLEMENTATION OF NEW TECHNOLOGY FOR ENVIRONMENTAL ENHANCEMENT AND FOR PRESERVING LONG-TERM, POST-MINING WATER QUALITY IN TENMILE CREEK With the restart of operations in 2012, the mine plan at Climax required tailings deposition onto the Mayflower TSF by late 2014. When this occurred, the Mayflower TSF could no longer be used for Stage 2 treatment. Climax began to select a new process to treat water before being discharged near its property line. This included extensive pilot operations as well as a feasibility study for selecting a treatment plant site. The treatment train selected included the HDS process followed by sand filtration. Additional facilities included barge pump stations, conveyance piping, plate and frame dewatering, as well as associated chemical feed and ancillary systems. The facility was designed to operate during and after the effective mine life. In May 2012 Climax began constructing the Property Discharge Water Treatment Plant (PDWTP). The plant was commissioned in early 2014 and began discharging treated water in July 2014. A series of photographs showing the PDWTP construction sequence are in Appendix A. The PDWTP is a state-of-the-art, stand alone, HDS process and will treat as much as 14,000 gallons per minute (gpm). Extensive safety and environmental controls are built into the plant to assure compliance with CDPS permit discharge limitations. The PDWTP has secondary 2

containment in sumps and tertiary containment in an Events Pond to ensure that upsets in the plant will not result in discharge of out of compliance water. The PDWTP is the newest component to the site-wide water management and water treatment system at Climax. Using state-of-the-art technology in its design, the new plant assures that Climax will meet the stringent requirements of its discharge permit to protect aquatic life and downstream uses of Tenmile Creek well into the future. PDWTP - STATE OF THE ART TECHNOLOGY The primary metals in the water targeted for Stage 2 treatment at the PDWTP are manganese, iron, copper and zinc. To ensure CDPS permit effluent limits are met for all constituents, the plant is designed to treat flows up to 14,000 gpm. Following Stage 1 metals treatment using the existing SDP facility and Tenmile and Mayflower TSFs, feed water from the Mayflower TSF water pool is pumped by the PDWTP Barge to the head of the plant for treatment. The plant utilizes the HDS process which re-circulates sludge to maximize the neutralization potential of the added lime and improve coagulation and settling. The resulting precipitate is thickened and the thickener overflow is filtered in sand filters to remove any remaining precipitate solids. Lastly, sulfuric acid is added as a final ph adjustment and the filtrate is discharged to the natural channel in Tenmile Creek above the Climax CDPS permit outfall. Water from the feed tank goes to Reactor #1 and then to Reactor #2 in the Metals Removal Building. The piping is arranged to allow either reactor to be used alone. Lime is supplied via the Mix Tank situated above the reactors, where it is mixed by an agitator with the returning recycled sludge. This lime-coated sludge promotes HDS reactions while the lime addition raises the ph to approximately 10 in the reactors. Air is sparged below the surface to oxidize iron and manganese. The reactor overflow flows to a splitter box which directs the flow to two thickeners to provide operational flexibility allowing one thickener to be taken offline for maintenance or when both are not needed, based on plant influent flow rates. Thickener underflow is recycled to the Mix Tank with a slip stream sent for dewatering in a plate and frame press. The thickener underflow, made up of sludge thickened to approximately 25% solids by mass, is recycled at all times. The mass of solids in the recycle is targeted to be at an 80:1 ratio to the mass of the solids produced from the incoming water being fed to the plant. Sludge will periodically be wasted, or pumped from the thickeners to a sludge storage tank before dewatering. The sludge tank is sized to hold three days of maximum solids production. A filter press is then used to dewater the sludge. The filter press can discharge directly into a truck to transport the dewatered sludge to a sludge disposal cell within the Mayflower TSF footprint. The thickener overflow flows to gravity sand filters in the Metals Filter Building. An underdrain system collects the filtered water. A portion of the water is used for backwashing the sand filters and the balance is neutralized with sulfuric acid and discharged above the CDPS permit outfall on Tenmile Creek. 3

The main plant area occupies a majority of the Metals Removal Building interior, with a smaller area designated for a general purpose/meeting room, laboratory, control room, and storage. To provide good access for maintenance and operations personnel, each tank and equipment support platform is interconnected by a series of grated walkways. The platforms for the sludge dewatering system are elevated for a truck to be placed below the filter press to collect dewatered sludge. The PDWTP is designed with the level of control and redundancy needed to achieve compliance with CDPS permit requirements and to ensure long-term environmental protection of Tenmile Creek. This includes extensive automatic control of systems based on installed instrumentation, while providing operators with alarms and the ability to run systems manually if required. The PDWTP is fully integrated into the current site-wide SCADA and human-machine interface (HMI) monitoring and control systems via fiber optics. The control strategy is designed for automatic and controlled shutdown in the event of system failures or power outages, and will provide for automatic collection and recycle of off-specification water. Each portion of the Metals Removal Building is designed with a dedicated sump to catch overflows and spills. In the event that there is an overflow from these sumps, water will be routed to the Mayflower Return Sump. The Mayflower Return Sump pump station can convey up to 7,000 gpm back to the Mayflower TSF or up to 500 gpm back to the head of the PDWTP. If the Mayflower Return Sump overflows, water will then flow by gravity to the Events Pond, which will capture overflows until such time that it can be pumped out. The lined pond has a capacity of approximately 5 million gallons. The capacity is based on the intent to safely accommodate the full volume from failure of the largest single vessel (thickener) or the combined capacity of the influent line and feed tank. Pumps in the Events Pond are sized to empty the pond over a 24-hour period by pumping back to the Mayflower Return Sump. The treatment process is shown schematically in the figure below, followed by a step by step process description. 4

Step 1: Mix Tank Lime from the large silo tank located outside of the building is slaked (mixed with water) and is pumped to the lime slurry tank. This lime is then mixed with recycled sludge from the thickeners in the Mix Tank. This slurry then flows into Reactor 1. Step 2: Reactors Untreated water enters Reactor 1 where it is mixed with the slurry from the Mix Tank, which controls the ph in Reactor 1 to 10. Neutralized water then flows by gravity to Reactor 2. Both reactors are aerated to oxidize iron and manganese and to assist with metals precipitation. Step 3: Polymer Addition After leaving Reactor 2, and before entering the thickeners, polymer is added to the water. The Polymer acts as a flocculant which combines with the metals and causes them to become denser, which helps with settling of the solids. Step 4: Thickeners The thickeners contain a large rake mechanism that rotates slowly and moves the settled solids toward the center of the thickener. Most of the collected sludge is recycled to the Mix Tank, and a portion of it is wasted and sent to a sludge press which dewaters the sludge. The sludge is then transported to a sludge storage cell located within the Mayflower TSF footprint. Clearwater will 5

overflow the top of the thickeners and flow through a pipeline to the next stage of water treatment, filtration. Step 5: Sand Filters The water is directed to three filter tanks where it will pass through various sized sand media to remove additional suspended solids. Each filter is backwashed periodically and the backwash water is recycled to the reactors for treatment. The underflow and clear water flows to final neutralization. Step 6: Neutralization and Environmental Compliance Sulfuric acid is added to the filtered water to bring the ph to neutral (7-8). If any excursion in either ph or turbidity is detected by installed instrumentation, flow from the Neutralization Sump to Tenmile Creek will be stopped and the flow will be routed back for recycle and treatment in the plant. CDPS permit compliance sampling is taken from the Neutralization Sump discharge. Barges RELATED INFRASTRUCTURE Two new barge pump systems were built and placed in the Mayflower TSF. The barges replace the former TSF decant piping system and supply water to both the new PDWTP for treatment and for recycling water back into the ore processing system. The barges are 40 feet x 80 feet, with a 120 feet long bridge from the shore to the barge. A critical design parameter for both barges is the possible pond height fluctuation of up to 30 feet over the course of two years. The pond elevation is expected to increase approximately 220 feet, based on the current mine plan. PDWTP Barge The PDWTP Barge can convey 14,000 gpm to the PDWTP. This barge is equipped with three duty pumps and one standby pump, with adjustable speed capabilities on one pump. 6

Mill Water Barge The Mill Water Barge can convey 10,000 gpm to the Supply Canal No. 2 that flows to Tenmile Tunnel and Robinson Lake for process water storage. This pumping system has two duty pumps and one standby pump. Pipelines PDWTP Pipelines Pipelines for feed and return water have been routed to and from the Mayflower TSF to the new PDWTP complex. The feed water pipeline to the PDWTP is 36-inch diameter and approximately three miles long, and is designed for up to 14,000 gpm from the PDWTP Barge. The Mayflower return line from the PDWTP is 24-inch diameter and approximately two miles long, and is designed to convey up to 8,000 gpm from the PDWTP to the Mayflower TSF. Mill Water Pipelines Approximately 3,400 feet of new pipeline was placed for the Mill Water Barge from the Mayflower TSF to the process water circuit. The Mill Water and PDWTP feed water pipelines will be interconnected at a valve station located in Searle Gulch. This will allow the Mill Water Barge to supply water to the PDWTP while the PDWTP Barge is being moved, and vice-versa. Power Distribution Primary power to the PDWTP and Barge Substation is provided by the new High Voltage Substation located southeast of the PDWTP at the toe of the Mayflower TSF. The PDWTP Substation is an outdoor 115-kV x 25-kV facility with redundant 15 megawatt transformers and dual 25-kV feeds to the Climax Mayflower Substation, where the 25-kV distribution line is split to the PDWTP and the Barge Substation. The new facilities include approximately 18,000 feet of overhead and 2,100 feet of underground power lines. 7

AVALANCHE DANGER MITIGATION The PDWTP was built in known avalanche areas. These areas underwent extensive review by industry experts and the dangers were mitigated with avalanche barriers and berms. Employee protective measures included extensive training in avalanche search and rescue and all project personnel were required to wear a device to aid in the rescue of personnel in the event of an avalanche. During the construction of the PDWTP, the Iron Mask Slide experienced an event that removed trees and foliage from the mountain side but did not result in any injuries. SAFETY AND ENVIRONMENTAL CULTURE The PDWTP project was managed to protect all workers, beginning with the Climax Safety Culture presentation that was provided to each contractor or employee upon commencement of work. Climax Safety personnel provided mock MSHA audits and safety discussions with all contractors throughout the project. This ensured a focus on accomplishing tasks in a safe manner. As of June 2014, the PDWTP had 758,642 man hours, with only 3 reportable injuries that were non-life threatening and the individuals were able to work after recovery. The Climax Environmental team performed regular inspections to ensure compliance with its environmental management system during PDWTP construction. PDWTP contractors were held to the same standards as Climax employees and, as part of their contracts, they maintained best practices to avoid any potential environmental-related issues in their work areas. The net result of these efforts was that there were no environmental releases during the two and a half-year construction period. In addition, all areas of disturbance associated with the construction project have been reclaimed to be compatible with the surrounding area. This work included constructing a new wetland area as part of overall site mitigation. Project Year Man Hours PDWTP 2012 190,213 2013 475,255 2014 93,174 PDWTP Total 758,642 8

Nomination for 2014 Hardrock Mining Reclamation Awards Climax Mine PDWTP APPENDIX A CONSTRUCTION PHOTOGRAPHS

Nomination for 2014 Hardrock Mining Reclamation Awards Climax Mine PDWTP Site Prior to Construction 2011 Breaking Ground and Foundation Work 2012 1

Metals Removal Building and Foundation for Metals Filter Building 2012 2013 Construction Progress 2

2014 Construction Progress Completion in 2014 3