Announcement of Procurement

No «_____» Mirny, 2019

ALROSA Company (Public Joint Stock Company), the Customer, plans to pursue a procurement procedure under special open tender for the right conclude a contract for mining construction works for sinking, installation of support and installation of temporary communications of a conveyor incline in elevations of L +664/-680 m and opening crosscuts in elevation of L -280 m of Yubileinaya pipe deposit.

The notice and documentation of the procurement will be placed in the Unified Information System (EIS), http://zakupki.gov.ru in 2019. Procurement will be pursued without the use of electronic trading platform.

In compliance with the Procurement Policy, the Customer announces the intended procurement in advance with the purpose of:

(a) raising market awareness of the forthcoming procurement procedure;

b) early warning of suppliers about the planned procurement procedure, as well as the conditions and requirements that may be specified in the documentation of the forthcoming procurement procedure;

c) analysis and study of market opportunities to meet Customer needs through receiving feedback from suppliers regarding the parameters of the upcoming procurement procedure, including obtaining information about alternative and innovative technologies available on the market;

d) improve the quality of elaboration of procurement notification and documentation by the Customer;

The publication of the announcement does not have the force of the official placement of information about the procurement. Refusal to pursue previously announced procurement procedures shall not constitute the basis for suppliers’ claims to the Customer. The information provided by the suppliers in response to the announcement is not qualified as the supplier's proposal to conclude a contract.

At the moment, the Customer assumes to impose the following requirements:

1. For prospective procurement parties (bidders):

1.1. The bidder is to have the necessary experience in providing services similar to the subject of procurement for the construction of underground workings (submit copy of these contracts including annexes). The requirement is documented by a Certificate of experience.

1.2. The bidder is to have skilled specialists, with the provision of copies of documents confirming the relevant skills. The requirement is documented by the Certificate of personnel resources.

1.3. The procurement party is to have sufficient material and technical resources and equipment (either property, leasehold, on lease) with the provision of copies of documents (list of fixed assets, leasehold agreements, etc.), before the commencement of works. The requirement should documented by a Certificate of materials and technical resources.

2. For the construction project (the contract):

2.1. As defined by the draft terms of reference (Annex №1), procurement documentation, which is to be submitted on request in electronic *.pdf document by the contact person specified in the announcement.

3. Additional requirements and conditions:

3.1. The bidder shall submit the following documents as part of the application: 3.2. Extract from the register of members of the self-regulatory organization in the form

approved by the order of Rostekhnadzor of 16.02.2017 №58 (part 4, part 5 of article 55.17 of the Civil Code of the Russian Federation), issued not earlier than one month before the deadline for submission of applications.

The aggregate assigned amount of the obligations of the bidder for contracts concluded using competitive methods, shall not exceed the level of responsibility of the bidder’s compensation Fund for contractual obligations (clause 2 of part 3 of article 55.8 of the Civil Code of the Russian Federation).

3.2.1. Copies of constituent documents.3.2.2. Extract or certified copy of an entry in the unified state register of legal entities (Unified

state register of individual entrepreneurs for individual entrepreneurs) issued by the tax authority not earlier than 1 (one) month before the deadline for submission of applications.

3.2.3. Copy of the Certificate of registration with the tax authority.3.2.4. Copy of the Certificate of assignment of the Primary state registration number (OGRN).3.2.5. Copy of the Certificate of registration as a legal entity (individual entrepreneur) confirming

registration in the territory of the Russian Federation (for legal entities registered before July 1, 2002 —additional Certificate of entry in the Unified state register of legal entities).

3.2.6. Copy of the ruling of the competent authorities of the bidder (in accordance with the Charter and the requirements of the legislation in effect) regarding the appointment of a person entitled to act on behalf of the bidder without a power of attorney, and a power of attorney if necessary.

3.2.7. Copy of the balance sheet of the legal entity on the last date of the reporting period (calendar year) with the original mark of the tax authority (with an ink stamp), including for legal entities using the simplified tax system.

3.2.8. Interim balance sheet for the last reporting period established for intermediate accounting reporting, signed by the legally authorized representative of the legal entity and certified by the seal of the legal entity (clause 48 of Regulations on accounting No. 4/99 "Accounting statements of the organization" approved by the order of the Ministry of Finance of the Russian Federation of 06.07.99 No. 43n"). The requirement is also valid for the enterprises using the simplified tax system.

3.2.9. The original certificate on the status of payments on taxes, fees, penalties and fines issued by the tax authority (form code 1160080 for the Tax Document Classifier) issued not earlier than 2 months from the date of submitting the application.

3.2.10. Certificate of book value of assets (in order to determine the size of the transaction in accordance with the legislation of the Russian Federation).

3.2.11. Certificate of loan obligations from the bidder certified by the signature of the chief executive and the seal of the enterprise with either listing of all existing creditors (with certificate confirming the absence of debts in respect to payments to the creditors) or assertion of absence of any creditor.

Individual entrepreneurs or private individuals should additionally include in the application:

3.2.12. Copy of the passport of citizen of the Russian Federation or a passport of another state, or equivalent identity document compliant with the requirements of the current legislation of the Russian Federation (in case another state issued the passport or equivalent identity document, an apostilled translation of such document should be submitted).

3.2.13. A copy of the Certificate of assignment of the taxpayer identification number (TIN) (if any).

3.2.14. Copy of insurance certificate of state pension insurance. If a foreign entity registered in accordance with the legislation of a foreign state is involved as a subcontractor / co-executor or a member of a collective bidder, for such an entity, the application should additionally include:

3.2.15. Copy of an extract from the trade register or other documents confirming the legal capacity of the counterparty in accordance with the legislation of a foreign state.

3.2.16. Copy of the certificate of tax registration in the Russian Federation (if any).3.2.17. Copy of the documents confirming the authorization of the chief executive of the bidder

and a power of attorney if necessary.3.2.18. Сopy of the certificate of welfare / well-being certificate (equivalent to extract from the

Unified State Register of Legal Entities). 3.2.19. Copy of the document confirming there is no ongoing reorganization, liquidation or

bankruptcy of the counterparty process (including in the form of a letter of confirmation signed by the bidder's chief executive and addressed to the Customer).If the bidder is a collective bidder, the following documents is to be added to the application:

3.2.20. The plan of work share division under the contract of the collective bidder. 3.2.21. Questionnaire for each member of the collective bidder (including the mandatory

enclosures to the questionnaire).3.2.22. The document confirming the belonging to the SMEs (Small/medium enterprises) for each

SME member of the collective bidder (either a document that includes information from the unified register of SMEs — if the information about the supplier is included in the register of SMEs, or Declaration of compliance with the criteria for being qualified as small and medium-sized enterprises — if the information about the supplier is not available in the register of SMEs).

3.2.23. Certificate of expertise for each member of the collective bidder.3.2.24. Certificate of personnel resources.

To any supplier interested in the upcoming procurement procedure, the Customer offers to forward the following information to the contact person specified in the announcement:

а.) Letter (in any form) expressing interest in participation in the procurement procedure. In the letter, the details of contact persons of the supplier are to be specified (phone/fax and e-mail address for providing additional information to the supplier on formal procurement notification and documentation placement);

b.) Integrated milestone technical and commercial proposal for mining construction works for sinking, installation of support and installation of temporary communications of a conveyor incline in elevations of L +664/-680 m and opening crosscuts in elevation of L -280 m of Yubileinaya pipe deposit, on the basis of the Terms of Reference. The bidder is to specify the validity period of the Proposal. The bidder shall specify the cost of the Proposal in figures and words, in rubles. The Proposal is to be signed and sealed.

c.) Upon consideration of technical and commercial proposals, the Customer establishes the compliance of the supplier and the offered products with the requirements.

Provided the customer shows interest in the conditions set out in the technical and commercial proposal of the supplier, the latter shall be notified by a formal letter of the Customer's interest in the continuation of cooperation, and will be offered to develop technological regulations, including the methods of sinking and ground support of the mine workings.

The contents of the technological regulations includes (not limited to):1. Method and parameters of sinking (including advanced drilling).2. The method and parameters of temporary ground support.3. Method and parameters of permanent support.4. Selection of equipment for sinking, haulage of the rock mass, for the equipping of critical

infrastructure.5. Ventilation system for the period of sinking.6. Drainage system for the period of sinking.7. Drilling and blasting operations during sinking (if necessary).8. Gas control system for the period of sinking.9. The need for energy resources (electricity, compressed air).10. Method and parameters of handling and temporary storage of the rock mass after the

excavation of the mine workings.11. Justification of construction of temporary buildings and structures on the day surface for the

period of sinking.12. Milestone project cost estimate (including costs for relocation of equipment).The Customer agrees and undertakes to pay for the elaboration of technological regulations to

each supplier notified by a formal letter of the Customer's interest in the continuation of cooperation, in the amount not exceeding 500 000 rubles (five hundred thousand rubles), excluding VAT 20%.

Requirements for the types, scope of work and conditions of the Contract are contained in the draft Terms of Reference, which is enclosed to this announcement and is an integral part of it.

The availability of technological regulations will be taken into account during the ranking of submitted applications and will improve the results of the evaluation.

Term of submission of technical and commercial offers up to January 31, 2020.d.) Any proposals that, from the supplier's point of view, can improve the quality of the

forthcoming procurement procedure, including questions and proposals on the formulation of requirements for the prospective bidder, the procured products, the draft contract, other requirements and conditions.

The customer is interested in finding innovative solutions.

The Customer's contact person for the upcoming procurement procedure is Evgeniy Germogenovich Popov, Head of Engineering Preparation Department of Mirny Underground Mine Construction Enterprise of the Capital Construction Division of ALROSA PJSC (МСШСТ УКС АК «АЛРОСА» (ПАО)). Phone: +7(41136) 9-90-00 (ext. 4-45908), e-mail: PopovEG@alrosa.ru.

The Customer's contact person for technical support and advice in the process of elaboration of technical and commercial proposal and regulations is Mikhail Valeryevich Kiselev, lead project engineer of Yakutniproalmaz institute of ALROSA PJSC. Phone: +7(41136) 9-90-00 (ext. 4-1744), e-mail: KiselevMV@alrosa.ru

Annex No 1: Draft Terms of ReferenceAnnex No 2: Documents in English.

Managing director of Mirny Underground Mine Construction Enterprise Capital Construction Division, ALROSA PJSC(МСШСТ УКС) E. N. Klyushin

Contact person E.G. Popov

Annex No 1 To the announcement of procurement

Agreed by: Approved by:Chief Engineer of Capital Construction Chief Engineer of ALROSA PJSCDivision ALROSA PJSC ___________________ Cherepnov A.N._____________________Aygistov M.R. _____ ______________ 2018____ __________ 2018

Agreed by: Agreed by:Chief Engineer of Aikhal MPD First Director Deputy - ALROSA PJSC Chief Engineer of Yakutniproalmaz Institute

ALROSA PJSC____________________ Zubarev V.P. ____________________ Gerasimov Y.N.____ ________________ 2018 ____ ________________ 2018

Draft Terms of ReferenceTo perform mining and construction works for sinking, installation of support and installation of

temporary communications of a conveyor incline in elevation of L +664/-680 m, and opening crosscuts in elevation of L -280 m of Yubileinaya pipe deposit

No List of basic data

and requirementsScope of basic data and requirement

1. Terms and definitions

1.1. Customer ALROSA PJSC. Structural division of the Customer, Capital Construction Division of ALROSA PJSC acts on behalf of the Customer in the course of the project implementation.

1.2. Contractor The organization selected by the Customer during the open procurement procedure, conducted in accordance with the «Procurement Regulations of ALROSA PJSC approved by the supervisory board of ALROSA PJSC of 15/11/2018 (minutes No. A01/283-ПР-НС)».

1.3. СCD of ALROSA PJSC

Сapital Construction Division of ALROSA PJSC.

1.4. Аikhal MPD of ALROSA PJSC

Aikhal Mining and Processing Division of ALROSA PJSC.

1.5. «Project execution plan» (PEP)

Corresponding to the requirements of the Decree of the State Construction Committee of USSR of 02/09/1985 No. 140 Construction Rules and Regulations 3.01.01-85 «Organization of construction operations» the document, regulating the arrangement of construction work in accordance with process rules, requirements for labor protection, environmental safety and quality of works. It includes (not limited to) the terms of delivery of equipment for structures, finished products, materials, the use of construction machines and vehicles, the provision of regular labor force for basic professions, production and processing package and transportation of construction goods, as well as conditions for organizing and performing works on a rotational basis.

1.6. «Engineering documentation»

Project working and executive documentation, including equipment certificate, certificates for products and materials, operating manuals,

process regulations for production processes, a supervision log and other permits.

2. List of basic data and requirements

2.1. Location of the facility

Republic of Sakha (Yakutia), Aikhal settlement, industrial site of the Yubileiny open pit.

2.2. Grounds for issuing an assignment

Minutes of the meeting with the First Deputy CEO – Executive Director of ALROSA PJSC (No. A02/189 – Project work of 01/11/2018).

2.3. Name of the facility Aikhal MPD. Yubileinaya pipe deposit.2.4. Type of construction New construction2.5. Customer ALROSA PJSC. On behalf of the Customer, a structural unit of the Capital

Construction Division of ALROSA PJSC acts in the course of the project implementation.

2.6. General Сontractor Mirny Underground Mine Construction Enterprise of the Capital Construction Division of ALROSA PJSC.

2.7. Source of financing Investing activities of ALROSA PJSC.2.8. Designation of

procurement objectExecution of mining construction works for sinking, installation of support and installation of temporary communications of a conveyor incline in elevations of L +664/-680 m and opening crosscuts in elevation of L -280 m of Yubileinaya pipe deposit.

2.9. Types of works:2.9.1.

PEP Development (Contractor)

Development of PEP on the basis of «Source data for elaboration of work execution plan for mining construction works for sinking, installation of support and installation of temporary communications of a conveyor incline in elevations of +664/-680 m and opening crosscuts in elevation of -280 m of Yubileinaya pipe deposit.» (Annex No. 1 to Terms of Reference).

2.9.2.

Equipment supply (Contractor/Customer)

Supply of main self-propelled mining equipment belonging to the Contractor on the right of ownership (rent, lease) to the construction site – by the Contractor.Supply of auxiliary and stationary equipment for sinking to the construction site and to be handed over to the Customer as part of the Facility – by the Contractor.Supply of auxiliary and stationary equipment for the life support system operation to the construction site and to be handed over to the Contractor for lease – by the Customer.

2.9.3.

Supply of materials (Contractor/Customer)

Supply of materials for installation of support of underground workings, production of construction and installation works, consumables and spare parts to the place of work – by the Contractor.Supply of materials for installation of support of underground workings – cement, inert materials – by the Customer under the terms of sale.

2.9.4.

Construction of underground workings (Contractor)

Sinking of a conveyor incline in elevations of L +664/-680 m and opening crosscuts in elevation of L -280 m with installation of temporary communications.Types of construction and installation works, scope of tunneling operations, volumes and type of support and other engineering requirements are specified by the design and working documentation.

2.9.5 Blasting operations (Contractor/Customer)

Performed by the Contractor. By mutual agreement of the parties, blasting operations during construction of a part of the workings can be performed by the Customer, based on the contract for blasting operations (including the issuance of permits, supply of explosives and means of initiation).

2.9.6 Haulage of rock mass Technology and procedure for rock mass haulage is determined by the PEP

out of workings to the daylight surface (Contractor/Customer)

and design documentation. The Contractor draws rock mass, produced during sinking, onto the temporary storage area specified in the working documentation. The Customer will haul the rock mass to the overburden dumps from the temporary storage area.

2.9.7 Maintenance of technical documentation during construction and preparation of the facility for commissioning(Contractor)

Based on the Working Documentation of 11/02/2006 «Requirements for the content and procedure for maintaining the executive documentation during construction, reconstruction, overhaul of capital construction facilities and requirements for acts of inspection of work, structures, sections of networks of engineering and technical support», Working Documentation of 11/05/2007 «The procedure for maintaining general and (or) special logbook with construction work progress, reconstruction, overhaul of capital construction facilities» provides maintenance of technical documentation on site. The Contractor shall provide a set of as-built documentation in the process of commissioning of facilities, agreed with the Customer.

3. Input data Specified in the «Input data for development of PEP for performance mining and construction work in sinking, installation of support and erection of temporary communications of a conveyor incline in elevations of L+664/-680 m and opening crosscuts in elevation of L -280 m of Yubileinaya pipe deposit (Annex No. 1 to Terms of Reference).

4. Work execution stages

Stage 1 – development and approval of PEP with the Customer, with transfer of title for the result of accomplished work to the Customer.Stage 2 - sinking, installation of support and installation of temporary communications of a conveyor incline in elevations of L +664/-280 m with the transfer of title for the result of accomplished work to the Customer.Stage 3 - tunneling, installation of support and installation of temporary communications of the opening crosscuts in elevation of L – 280 m with the transfer of title for the result of accomplished work to the Customer.Stage 4 - sinking, installation of support and installation of temporary communications of the conveyor incline in elevations of L -280/-680 m with the transfer of title for the result of accomplished work to the Customer.

5. Period of work execution

Stage 1 – 6 months;Stage 2 – 16 months;Stage 3 – 10 months;Stage 4 – 7 months.

6. Requirements for construction management

The Contractor shall follow the Construction Rules 48.13330.2011 «Construction management. Updated version of Construction rules and regulations of 12/01/2004 (with amendment No. 1)», approved by the Order of the Ministry of Construction Industry of 26/08/2016 No. 597/Order.

It is not allowed to deviate from the design documentation, approved by Glavgosexpertiza (State Expertise Authority), in the process of construction.

7..

Requirements for the Contractor

Possibility of using the technology of a complete mining cycle, experience of successful implementation projects for construction such underground facilities, availability of tunneling and auxiliary equipment on the basis of property rights (rent, lease), availability of qualified personnel.

At Stage 1 the Contractor provides the PEP to the Customer with the consideration of construction technology and commercial sinking (advance) rate of at least 400 l m/month (33 months), selection of tunneling and

auxiliary equipment, support parameters and life support system, the project estimated budget calculation.

9. Requirements for equipment

The Contractor performs provision of spare parts, installation, installation supervision, maintenance and repair of equipment without subcontracting. The equipment has to comply with the requirements of the regulations of the customs union, have a certificate of compliance with the regulations requirements of the customs union.

10. Material requirements

The materials shall comply with the requirements of the technical guidelines, standards of the National Standards of the Russian Federation (GOST).

11. Special requirements(terms of contract)

The contract shall be concluded under general and specific conditions of rendering services/contracts, concluded by ALROSA PJSC on the results of Procurement approved by the order of the President of ALROSA PJSC No. A01/399-П of 29/12/2017 as revised by the order No. A01/195-П of 13/07/2018.Internet address: http://www.alrosa.ru/закупки/договорная-документацияWhen participating in the procurement procedure a foreign participant shall comply with the requirements specified in the «Procurement regulations of ALROSA PJSC» approved by the supervisory board of ALROSA PJSC of 15/11/2018 (minutes No. A01/283-ПР-НС).Internet address: http://www.alrosa.ru/ documents/нормативные-документыEvery month the General Contractor issues an invoice to the Contractor for the performance of works (services) amounting to 2% of the sum of construction and installation works, included in the overhead cost standard for the accomplished work (Stages 2, 3, 4).

After the design and working documentation is ready, an additional agreement shall be concluded by the Contractor to clarify scopes and types of work, range and quantity of equipment for sinking and installation of support of mine workings, laying of communications, relocating equipment, supply of material.

11. Requirements for work execution

According to Annex No. 1 to the Specific terms of agreements for performance of work, provision of paid services, concluded by ALROSA PJSC after procurement procedure, approved by the order of the President of ALROSA PJSC No. A01/399-П of 29/12/2017 as revised by the order No. A01/195-П of 13/07/2018.Internet address: http://www.alrosa.ru/закупки/ договорная-документация

12. Terms of payment Payment of works (Stage 1) is effected in a single payment after the Customer has approved the PEP and the parties have signed the certificate of completion, according to the originals of issued bill and invoice.

Payment of works (Stages 2,3,4) is effected monthly for the actually performed construction and installation works with consideration of retainage amounting to 5% of the cost of work performed, based on the original documents of KS-2 form and KS-3 certificate signed by the parties, according to the originals of issued bill and invoice.

Annex No. 1: «Input data for the development of PEP for performance of mining and construction works for sinking, installation of support and installation of temporary communications of the conveyor incline in elevations of L. +664/-680 m and opening crosscuts in elevation of L. -280 m of Yubileinaya pipe deposit» on 12 sheets.

Managing director of Mirny Underground Mine Construction EnterpriseCapital Construction Division E.N. Klyushin

Contact person E.G. Popov

Annex № 1 to the Terms of Reference

Input dataFor elaboration of work execution plan

for mining construction works for sinking, installation of support and installation of temporary communications of a conveyor incline in elevations of +664/-680 m and opening crosscuts in

elevation of -280 m of Yubileinaya pipe deposit.

№ List of data and requirements Content of data and requirements1 2 31. Site location. The Republic of Sakha (Yakutia), Aikhal urban type

settlement, production site of the Yubileiny open pit mine.2. General information about the

site and specific construction conditions.Planning restrictions, specific geological and hydrological conditions

General information about the site and specific construction conditions. The Yubileinaya deposit is located in circumpolar part of the Middle Siberian plateau, in the catchment area of the upper reach of the Markha river, in the Mirny district of the Republic of Sakha (Yakutia).The climate of the region is extremely continental; winter period is long and summer is short and moderately warm, sometimes hot. The amount of precipitation reaches 350-400 mm. Abs. highest attainable temperature (+35C) are in July while abs. minimum is in January (65C below zero). The average annual temperature is (11C below zero). Snow cover in the area lasts for 7 months from October to April, with its thickness in the watershed areas reaching 0.7 to 1 m while in natural depressions and under the ledges of trapp plateau up to 2 to 3 m. The frost-free period is 38 to 48 days.

The area of the Deposit is in the permafrost zone. The depth of seasonal soil defrost varies from 0.2 to 3 m. Zero isotherm is at thhe depth of about 700 m (–200 m abs.). The thickness of soil layer is 0.1 – 0.2 m. and it covers up to 2 m thick silt ice bearing sediments.

GEOLOGYGeological settings . The geological section in the area of construction site is represented by the following lithological varieties (from top to bottom):The Carboniferous system, Aikhalskaya suite (C2al1)

0.0÷4.2 filling, at the top of the interval (to 2.5 m) loam with limestone blocks up to 30 – 40 cm thick, followed by loam with dark gray dolerite debris (up to 5 cm).Permian-Triassic system (γβP2-T1)

4.2÷67.8 massive, fine-crystalline dark gray dolerite. In the interval of 4.2 – 9.7 m the rock is intensely jointed (1 - 2 joints per 1 lin m). The joints are often closed type, oriented at ∠10° - 30° to the axis of the core. On the walls of joints, limonitization is observed. Rock hardness ratio on Protodyakonov scale is 12.Silurian system Mashkovskaya Suite (S1mṡ)

67.8÷72.0 Interbedding of finely grained limestone with argillaceous limestones. The color of the rock varies from yellowish-gray to greenish-gray. Rocks are massive, thin-layered, argillaceous limestones, very fragile. The jointing is medium, subhorizontal.Silurian system Bashennaya suite (S1bṡ)

72.0÷127.0 interbedding of finely grained yellowish - gray, brownish - yellow, massive limestones, with gray with a greenish tinge pelitic argillaceous limestones, thinly layered, with interlayers of marls. The stratification is thin, irregular, subhorizontal. Medium jointing (2 – 3 joints per 1 lin. m).Silurian system Baitakh suite (S1bt)

127.0÷155.0 At the beginning of the interval 18.0 m thick interbedding of marls and limestone, followed by cryptomerous, brownish - gray, hogbacked bedded argillaceous limestone. At the end of the interval is the layer of green-coloured cryptomerous lamellar marls (3.7 m thick). Rocks are slightly jointed (1 to 3 joints per lin. m), the jointing is subvertical. Rock hardness ratio on Protodyakonov scale is 5-6.Ordovician system kylakh suite (O2-3kl)

155.0÷187.5 Marls with interbedding of argillaceous limestone at the ratio 2 : 1. Indistinctly laminated variegated, rather fragile marls, variegated, fragile. Horizontal stratification. Gray - brown, cryptomerous, sometimes massive limestone. Common type of joint is closed, smooth, straight, stratification is subvertical, rarely sub-horizontal.Ordovician system Sytykanskaya suite (O2st)

187.5÷207.2 Arenaceous greenish gray, gray with a greenish tinge limestone with thin layers (up to 10 mm) of green massive, cryptomerous marls. Limestones are pelitic and finely-grained, interbedded. Stratification is hogbacked, subhorizontal. The rock is medium-jointed, the orientation of joints is sub-horizontal, with open joints, single caverns and voids of rounded, rarely angular shape with a size of 2 to 5 mm are observed.Ordovician system Sokhsolokhskaya suite (O1sh)

207.2÷231.8 At the beginning of the interval, a layer of 5.0 m green-colored, cryptomerous marls with subhorizontal stratification. Individual 5 - 10 cm thick layers of arenaceous grey-coloured limestone are observed. To the end of the interval dark - gray, very fine-grained, massive with poorly expressed thin subhorizontal stratification arenaceous limestone. Throughout the interval, the rocks are moderately jointed. Open type subhorizontal joints.

231.8÷243.8 Dark gray with a greenish tinge, fine-grained, dense, massive dolomites with poorly expressed fine subhorizontal stratification (thickness of layers 2 to 5 mm). Rock is moderately jointed. Joints of open type, subhorizontal.

243.8÷256.9 Dolomitic gray brownish massive, dense finely-grained limestone, uneven intermittent thin lamination with a thickness of 5 to 10 mm. Rock is moderately jointed, open type subhorizontal jointing. Individual caverns and voids of angular and irregular shape with dimensions up to 3 mm. A uniform distribution of dark - brown grains of glauconite sized 1 to 3 mm is observed.

256.9÷271.0 Argillaceous, greenish - gray, cryptomerous limestone, with sporadic up to 30 cm thick interbedding of green-coloured marls. Limestone is lamellar, horizontal inclined layering ∠85° - 90°, thickness of layers 5 to 25cm.

Medium subhorizontal jointing.Rock hardness ratio on Protodyakonov scale is 5-6.

Ordovician system Oldoninskaya suite (O1ol)271.0÷550.0 Dolomite grey with a greenish hue with

dolomite grey with a brownish hue. Rocks are pelitic and finely-grained, stratified. Stratification is mainly subhorizontal, hogbacked, poorly defined. Jointing is medium, subhorizontal. Joints are of open type. Rock hardness on Protodyakonov scale is 4-6 (50%); 7 - 50%.Cambrian system, Markokinskaya suite (Є3mrk)

550.0÷731.0 Interbedded argillaceous and calcareous dolomites with dense dolomitized limestones and marls subcalcareous. Jointing of rocks is moderate. Rocks are cavernous. Caverns are filled with gypsum. Rock hardness on Protodyakonov scale — 8-10 (3%); 7 (20%); 4-6 (77%)Cambrian system Markhinskaya suite (Є3mrh)

731.0÷1200.0 Interbedded argillaceous, calcareous and limestone dolomites. Joints, suture stylolite seams across the layer. Rock hardness on Protodyakonov scale — 7 (30%); 4-6 (70%).

The location of the excavation site should be considered in the design process, since the upper part of the section may change due to uneven thickness of Permian-Triassic (γβP2-T1) sediments.Gas saturation. Total gas saturation of the rocks lies in the range from 0.004 m3/m3 to 3.77 m3/m3.The hydrocarbon content to a depth of 500-600 m is 0.00016-0.001 m3/m3.The gas saturation of the host rocks, unlike kimberlites, decreases with the depth from 0.41 to 0.21 m3/m3 on average.Total gas saturation of kimberlites is 0.54 m3/m3 on average, two times higher that of the host rocks, which is 0.25m3/m3.The total oil bitumen saturation of rocks of the deposit is low and does not exceed 0.1% of the rock volume.Hydrogeological conditions.The Upper Cambrian sub-permafrost aquifer system in the deposit area is developed pervasively. 6 exploration and 12 hydrogeological observation boreholes, spread evenly around the perimeter of the deposit, tapped it.For the entire explored depth (up to 1200 m), it is the only aquifer system influencing the water abundance of the deposit during underground mining. This aquifer system is confined to lamellar interbedded argillaceous and carbonate rocks of the lagoon facies of the upper Cambrian, explored in the depth range of 550-1334 m, the lithological characteristics of which determine the distribution of reservoir layers, both in plan and in the section, confined to the most porous and permeable interbed of rocks.The reservoir beds are concentrated within two intervals of the upper Cambrian, located in the near-bottom part of the Morkokinskaya suite and the upper part of the Markhinskaya suite. There are two aquifers in the section, namely Morkokinsky and Markhinsky aquifers, represented in the

interval of absolute elevation marks – 40.2 / - 116.8 m and - 202.4 / 302.7 m, respectively. The total effective thickness of reservoir beds of the aquifer system does not exceed 21.2 m, which is only 12% of the total thickness of the aquifer system.The rocks of the aquifer system are characterized by low reservoir properties, which decrease with depth due to compaction and an increase of clay content of rocks.In general, the system is characterized by low and uniform hydrodynamic parameters: the values of the transmissivity coefficient range from 0.015 to 0.60 m2/day, with a prevalence of values >0.1 m2/day, piezotransmissivity coefficients – n x 103 - n х 104 m2/day.The only zone where the parameter values are increased by order of magnitude is the zone of jointing, confined to the Northeastern ore - hosting fault; transmissivity coefficient here is 5.2 m2/day, piezotransmissivity coefficient is 1.5X105 m2/day. The pressure head of the groundwater of the aquifer reaches 208 - 312 m. The piezometric level is measured at absolute elevations from +242 to +269 m. The level surface is sloped from the southwest to the northeast.Aquifer of the Morkokinskaya suite is the wettest in the depth interval 658.0 – 732.4 (- 40.2 / - 116.8 m abs.). Its roof is a series of permafrost rocks with a thickness of 570 m on the Southern and Eastern flanks and 650-662 m on the Northern and Western flanks of the deposit.The total thickness of the aquifer varies slightly from 60 m (boreholes 411, 411-н) to 76.8 m (borehole 415-н). Within its borderline, 10 to 18 reservoir beds with a total effective thickness of 7.2 to 16.2 m (12-26% of the total thickness of the aquifer) are observed with individual reservoir beds of 0.4 to 2.0 m (average 1.0 m). The collectors are characterized by granular cavernous and fractured porosity. Averaged total porosity ratios do not exceed 17.2-27.6%, open porosity — 8.7-12.7%, effective permeability — 8 mD (table 2.2, 2.3). In assessing the water abundance, insignificant inflows of reservoir fluid were obtained, varying within 0.2-13.8 m3/day (0.002-0.16 l / sec). The measured reservoir pressure varies from 21.5 to 27.3 kg/cm2 of the roof of the aquifer to 32.0-38.7 kg/cm2 at the floor of the formation.At the lower part of the Morkokinskaya suite, the largest number of aquifers having a continuous distribution is observed. The aquifer of the Markhinskaya suite is within the depth interval of 825–925 m (-202.4 ^ -302.7 m abs.). It is separated from the overlying aquifer by 90 to 100 m thick dense clayey carbonate rocks, which form a regional aquiclude.In the section of the considered aquifer there 2 to 9 reservoir beds are distinguished, the thickness of which varies from 0.4 to 2.4 m. The total effective thickness of these reservoirs varies from 1.8 m (borehole 411-м) to 7.8 m (borehole 413-н), which is 2-8% of the thickness of the aquifer.In general, the reservoirs of the Markhinskaya suite are confined mainly to three depth intervals: 830-835 m, 885-890 m and 918-925 m.

The average value of the open porosity of the rocks of the Markhinskaya suite does not exceed 7.1 – 9.8% and of the effective permeability — 0.11–0.67 mD (milliDarcy), which is significantly lower than that of the rocks of the Morkokinskaya suite. The reservoir pressure in the aquifer of the Markhinskaya suite naturally increases with a depth from 39.6-51.0 to 103.7 kg / cm2.Water inflows are 0.3 – 9.9 m3/day. (average 1 – 2 m3/day), which is also lower than in the Morkokinsky aquifer.To assess the filtration properties of the host rocks experimental cluster and single pumping tests were carried out on the Eastern, Northern, Northwestern, Southwestern and southern flanks of the deposit. Test show that for the upper Cambrian aquifer complex static levels of sub-permafrost water are at depths from 350 to 375 m, the head changes from 79 to 318 m.The average transmissivity coefficients for this aquifer system range from 0.015 to 1.976 m2/day, piezotransmissivity coefficients — from 3*103 to 1x104 m2/day. It should be noted that the water content of the near-contact of host rocks with kimberlites is two times and higher as compared to boundary zone, and the water content of kimberlites is the lowest.Below 925 m for the entire thickness (1334 m) explored by hydrogeological boreholes, the section of the Markhinskaya suite is almost waterless, with the exception of boreholes 413, 413-н, 416 and 418, which contain one water-bearing reservoir bed each. The remaining interlayers that have potential water collecting properties, and selected according to GIS [2], do not contain free water and feature only minor gas inflows according to the tests with the КИИ-95 reservoir tester. Given the predominantly clay composition of the rocks, the above-mentioned over 400 m thick part of the series of the Markhinskaya suite is a thick aquaclude for both the Markhinskaya suite aquifer and the upper Cambrian aquifer complex as a whole.By chemical composition, the sub-permafrost groundwaters are chloride magnesium-calcium brines with mineralization increasing with a depth from 143.8-166.0 g/l to 347.9 g/l, and with a content of nitrogen-carbon dioxide up to 1 m3/m3; the pH of brines ranges from 6.5 to 7.1.Comparison of the averaged values of the reservoir properties of the Morkokinsky and Markha aquifers shows that all characteristics of the latter have much lower value — the porosity coefficient is 1.5-3 times lower, and the effective permeability is an order of magnitude lower. These data indicate a significant decrease in the reservoir properties of Upper Cambrian sediments with depth, which is caused by compaction of rocks [2, 3], and an increase of clay content in the Markhinskaya suite as compared with the Morkokinskaya suite.The inflows are in the range of 0.3-9.9 m3/day (0.003-0.11 l/s), while the majority of the tested intervals are characterized by inflows up to 1-2 m3/day, which is also less than in the Morkokinsky aquifer. The values of reservoir

pressures of the Markhinsky aquifer naturally increase with depth from 39.6-51.0 to 103.7 kgf/cm2.

Planning constraints. Substantiation of the selection of the location of the underground mine construction site was carried out by the method of sequential exclusion of the locations of the development excavations with the construction of production facilities that can pose increased risks (danger), both in the category of safety (the presence of surface water bodies, dewatering tunnels near the open pits, the boundary of hazardous mining works, the presence of engineering structures of increased responsibility), and in the category of engineering incapability due to the formation of technogenic deposits (overburden and tailing dumps) resulting from open mining operations. Considering the location of industrial (engineering structures), man-made (overburden dumps), natural (surface water bodies) objects, as well as open pit footprint and boundary of the hazardous mining zone, the location of the existing industrial site is selected for the underground mine opening development.

3. Initial planning and building permits.

To be provided by the Customer, in accordance with the requirements of clause 10b of the RF Government Decree No. 87 of February 16, 2008, incl.:- land title document;- urban development plan for the land plot on a scale of 1: 500, registered in the Administration of the subject of the Russian Federation;- technical conditions for connection to the on-site engineering and utility networks as well as supporting surveying networks is to be provided by the Customer.

4. Initial technical solutions for the development of Project Execution Plan

1. This option of the deposit development presumes for the construction starting from the industrial site of the Processing plant No. 14 (elevation +664 m) of 7765 m. long, 7 m in diameter conveyor incline (100) to the level -680 m L., and two opening crosscuts in elevation -280 m with total length of 3360 m. Choice of ground support of the incline and crosscuts is to be substantiated by the contractor based on geological settings.2. Engineering survey data are provided by the Customer upon request.3. During development of Project Execution Plan a suspension of the raising of ventilation raise bore shaft at the level +664/-280 m by the Customer is to be provided for.4. The Customer carries out handling of rock mass excavated during the raising of the ventilation shaft, which is to be provided for in Project Execution Plan.

5. Requirements for the content of Project Execution Plan include (but not limited to)

1. Section for the preparatory period of construction, including:a) schedule of work and types of work on site;b) construction plan indicating the locations of temporary (necessary for the period of drifting of the opening workings), including mobile buildings, structures and equipment, on-site networks with connection to supply and consumption places,

temporary and permanent objects erected during the preparatory period for construction;c) equipment flow charts;d) the required schedule for commissioning by the Customer of temporary and permanent buildings and structures on the day surface, as well as for organizing the work of life support systems and setting up equipment;e) explanatory note with justification of construction of temporary buildings and constructions on a day surface, the list of a complex of works for preparation for the beginning of construction;(e) safety solutions.2. Section defining the procedure and schedule for delivery of the Contractor’s equipment to the construction site, including:a) the logistics supply chain of equipment to the site, taking into account the permissible transport weight and dimensions of individual units;b) procedure, schedule of assembly and setting up the equipment for operation on construction site;c) elaboration of local estimates for the relocation of equipment providing current prices.3. Section on substantiation and calculation of construction technology, including:a) justification of the selection of the method of excavation;b) justification of the choice of equipment;c) the parameters and method of performing drilling operations for pre-drilling;d) schemes and parameters of ventilation of developments at performance of works of 2,3,4 stages, the choice of the equipment for airing;e) schemes and parameters of water discharge at performance of works of 2,3,4 stages, the choice of the equipment for water discharge;f) substantiation, parameters, calculation of ground support of mine workings;g) statement of need and calculation of the consumption of energy resources (electricity, compressed air);h) substantiation and calculation of water supply for underground roadways for the period of drifting;i) the method and parameters of handling of the rock mass excavated during drifting of mine workings, the selection of equipment for the haulage of rock mass to the place of storage on the surface;j) communication and signaling for the period of construction;k) organizing of construction (including staffing of the site with qualified personnel, the need to involve subcontractors, logistics, supply of materials and spare parts;l) fire safety measures;m) industrial safety measures;n) project estimate calculation for 2,3,4 stages of construction in current prices;o) the Contractor shall provide the customer with data on the rated capacity of the main and auxiliary equipment for the

calculation of loads of electrical networks, the maximum air volume for the calculation of the parameters of the temporary main fan chamber and heater unit, the required volume of process water for the operation of equipment, the capacity of the temporary rock stockpile to maintain the planned sinking (raising, drifting) cycle, the initial requirements for the design of signaling and communication systems.

6. Requirements for development of cost estimate documentation

Cost estimate documentation to be developed by basic indexmethod based on current regulatory framework, particularly Costing Standard Database of 2001 (FSNB-2001) according to the estimating standards included in the Federal register of budget standards for the purpose of further execution of the Order of the Government of the Russian Federation No. 427 of 18.05.2009 (as amended) and Federal law No. 369-FZ of 03.07.2016.The estimated regulatory framework and cost estimating methods to comply with the requirements of the FAA Glavgosexpertiza of Russia (State Expert Authority) and MDS 81-35.2004. The content of the estimate documentation is to comply with part II of section 11 “Estimates for the construction of capital construction objects” of the Resolution of the Government of the Russian Federation of February 16, 2008 No. 87 (as amended).

7. Contents of delivery One hard copy on paper and one soft copy in electronic form of the Project Execution Plan are to be provided to the Customer. Documentation is to be executed using the following software: the graphic part — AutoCAD 2015, the descriptive text part — Microsoft Word 2013, the table part — Microsoft Excel 2013. All documentation should be in Russian.

Appendices:1. Layout schematics of the enterprise location — 1 sheet2. Opening and development of the central ore pillar of the Yubileynaya pipe deposit — 1 sheet.