GALMOY b MINES -I ' --

Mr. Jonathan Derham, Environmental Protection Agency, Johnstown Castle, Wexford, Co. Wexford.

lO* April 2008

Licence Reference: PO517-01

Environmenta,

1 5 APR 2008 w

Re: Discussions on the technical amendment for Galmoy Mine at the mceting in Kilkenny dated the 28th of March between Galmoy personnel and Marian Doyle and Jonathan Derham of thc EPA.

Dear Mr. Derham,

Further to our meeting regarding the request by Galmoy Mine to permit an increase in effluent discharge flow to the River God under a technical amendment please find enclosed the information presented at that meeting and clarification on issues relating to the memorandum dated the 28* of January from Marian Doyle to Padraic Larkin.

The company requests the Agency to reconsider its decision on the technical amendment based on the existing compliance with the mass emission limits for lead, zinc and suspended solids even though the discharge flow limit is exceeded. The company also requests the Agency to consider the expected improvement in water quality following the installation of the proposed water treatment facilities and the consequent reduction in the mass emission of the aforementioned parameters when deliberating over the technical amendment rey uest.

A new Lamella plate separator system was purchased and delivered to site in late December 2007. The foundations and civil work are currently underway. The capacity of the new Lamella is 7,200m3 per day. Lamella plate separators are a widely known and used method of removing suspended solids in the mining and quarrying industry. The system provides the mechanism for sedimentation of solids and the clear water flows through the unit. The solids fall to the bottom where there are gathered together with a scraper and pumped to the Tailings Management Facility (TMF) using a sludge pump. The technical specifications of the Lamella from the manufacturer are attached in Appendix 1.

Galmoy Mines Ltd., enhances the removal of suspended solids by pre-treatment with flocculattts and precipitation of lead and zinc from solution by the formation of

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hydroxides using lime addition. Ferric sulphate is also used to precipitate lead. Test work conducted by Treatment Systems Ltd., io 2006 ha5 identified the optimum conditions for the removal of suspended solids, lead and zinc from ditty mine water. Appendix 2 demonstrates the results from bench tests on mine water from the CW orebody, K orebody and a combination of both sources showing final concentrations of suspended solids, lead and zinc.

The existing water treatment plant consists of two lamella and a clarifier operating in parallel. The lamella are extremely effective in mine water treatment producing water with lead, zinc and suspended solid concentrations well below our emission limits at SWl (Discharge Emuent). Under normal conditions the removal of lead and zinc in the lamella is in excess of 97%. The new lamella will act in the same manner and are designed to treat an additional 7,200 m3 per day.

Each parameter controlled by water treatment is exanlined and discussed in terms of the following:

Mass emission Compliance with the existing emission limit value

Concentration in the receiving water with respect to the Dangerous Substances Regulations 2001 or Salmonid Regulations 1988 both upstream and downstream of the discharge point,

during the period September 2006 to March 2008 which corresponds to the time of the increased mine water make and consequent breach in the flow ELV to the River God. The concentration of all parameters is dictated by the dilution capacity of the River Goul. The dilution ratio of river flow versus emuent discharge varied between 5:1 and greater than 66:l (Appendix 3, Figure 1). It is expected that the range of dilution will continue over the remaining life of mine.

Lead (Appendix 3, Figure 2 and 3)

Compliance 99% with the ELV for Discharge Effluent (50 pg'l). Non compliances were recorded as being related to malfunctions in water treatment rather than exceedances in flow.

Average daily concentration 19pd Mass emission 98% compliant. Average daily mass emission 0.21 kglday, mass emission limit 0.7 kg/day

Lead results upstream and downstream are compared with Dangerous Substances Regulations and outlined in Appendix 3, Figure 4. On five occasions the dangerous substance regulations were exceeded upstream of the discharge point. Three of these occasions corresponded to exceedances downstream. An additional six occasions had non compliances downstream of the discharge point. Compliance with the Dangerous Substance Regulations 200 1 upstream and downstream was 94% and 89% respectively.

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Zinc (Appendix 3, Figure 5 and 6 )

I

Environmental protection Agency

1 5 APR 2008 i

Compliance 97% with ELV (300 pg/l) Average daily concentration 13Opgl Mass emission 95% compliant Average daily mass emission 1.6 kdday, mass emission limit 4.2 kdday

Zinc results upstream and downstream are compared with Dangerous Substances Regulations and outlined in Appendix 3, Figure 7. All results upstream and downstream are significantly below the limit of 100 pg/l.

Suspended solids (Appendix 3, Figure 8 and 9) Compliance 97% with ELV (25 mg/l> Average daily concentration 9mgA Mass emission 95% compliant Average daily mass emission 110 kg/day, mass emission limit 350 kglday

Suspended Solids results upstream and downstream are compared with Salmonid Regulations 1988 and are outlined in Appendix 3, Figure 10). The concentration of suspended solids exceeds the Salmonid Regulations on two occasions downstream of the discharge point and on one occasion upstream as reported from the analysis of the weekly grab samples taken from the River God. There were no corresponding non compliances on both occasions at the final discharge during these events.

Assessment of future mine water flows The existing cone of depression is approximately one third o f the predicted area from the original hydrogeological study. The mine water make predicted by Golders in the hydrogeological study of the R zone, EIS 2003 was 19,000m3/day from all the orebodies combined. The predicted volume did not occur during 2004, 2005, or 2006, despite reaching the extremities of the R orebody in 2006. The predicted volume of I 9,000rn3/day did materialise and was exceeded in the spring of 2007 however it was not the result of intercepting new water sources underground but could be directly attributed to the unusually wet weather of the previous 3 months.

The volume of water produced underground per cubic metre mined is reducing also as depicted in Figure 1 I below. It is anticipated that the opening up of the relatively small volume of the K2 orebody (less than 1% of the total mine reserve) will have a minor impact on the overall water make.

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Pumpcd Mlns Water by Volume W1t-d . ahwcws cw

Figure 22 Mine water pumped vs. volume of ore mined

With the exception of the R zone and the K orebody the water make is either constant or reducing from the other four orebodies. A more realistic monthly average water make prediction from the mine will be in the region of 15,000rn3 to 1S,000m3/day with occasional individual days reaching 20,000 m3. The existing water treatment capacity and the proposed Lamella will cater for any additional water make fiom the €3 orebody.

Excess mine water was diverted to the TMF when the water treatment plant’s capacity was exceeded as a precautionary and mitigation measure to minimise non compliances at the final discharge to the River Goul. While the company diverted about 7,500m3/day on average to the TMF over the last 19 months, an average of 2000 m3/day was withdrawn from the TMF to maintain the water balance. This water was treated in the process water treatment plant and discharged to the River Goul as part of the discharge effluent. The practice of diverting water to the TMF will cease when the new Lamella is installed and water will only be diverted to the TMF when maintenancehepair work is being carried out on the water treatment plants.

Conclusion The installation of the new lamella will increase the capacity to treat mine water by providing adequate increased retention time for maximum removal of suspended solids and precipitation of lead and zinc. While there will be an increase in the flow rate of the discharge to the river Goul as experienced in 2007 and the first part of 2008 the treated water quality will improve and the mass emission of all three parameters will significantly improve and comply with those permitted in the licence.

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i

The company disagrees with the EPA’s “as~es~ment that the required standards (EQS) in the Dangerous Substances ReguIation are unlikely to be met” and would like to point out the company’s monitoring upstream and downstream of the discharge point for lead, zinc, and suspended solids as shown in Figure 4, 7 and 10 show a very high compliance with the regulations despite having ELV non compliances with respect to the parameters discussed during early 2007 and 2008.

The installation of the Lamella will only improve the existing good compliance regime for the river water quality for the parameters regulated by the Dangerous Substances and Salmonid Regulations. Based on regular flow measurements taken at the company’s staff gauge at Tullavolty Bridge, some 2.5 km upstream of the discharge point, there is suffjcient assimilative capacity during dry periods because it is in these dry periods that the mine will also have a minimum mass emission to the river.

The existing water treatment plant and the proposed Lamella will have the capacity to treat mine water as experienced in 2007 and 2008 and the predicted water make from the development of the relatively small K2 orebody.

On this basis the company proposes that the additional flow limit of 22,000m3 be accommodated under a technical amendment to thc licence under the stipulation that the existing mass emission limits for suspended solids, lead and zinc are adhered to. When the €PA are considering this proposal the company would like to draw attention to the fact that mine closure is planned for the early part of 201 1 and that the cost of a licence review might be better served in some aspects of rehabilitation of the TMF or the mine site.

If you have any queries, please do not hesitate to contact me.

Yours sincerely,

/hwronmental Superintendent

Approved by:

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Appendix 1 : Lamella Specifications

6

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I I,

Leibleln GmbH - MOH-Seeber-Str.2 - D - 74736 Hardheim

Calmoy Mines L t d . A t t n . Mr. John Stagleton Galmoy vial Thurlos C o . Kilkenny

Ve rfa hrenstechnl k fur Umwettschutz und Chemle

Process Technology for Environmental Protection and Chemical Industry

Phone; Fax : E-mail:

00353 56 8 8 37 243 0 0 3 5 3 5 6 8 8 37 105 e-mail

Ireland

Date 13 June 2007

O f f e r PO 7069c - Lamella separator

Dear Mr. Stapleton:

R e f e r r i n g to your enquiry by phone with our Mr. Leiblein dated 12th/13th June 2007 we would l i k e to submit following o f f e r .

fterm 1 2 pcs. Lamella Separator SK 200 / 40 / 10 / K l i k e drawing-No.: 102-00-0045-4a

The lamella separator is used to separate solid particles of l i q u i d s . The separation is made by sedimentation, t h a t means the particles s i n k down, Basically particles b i g g e r than about 50 microns and w i t h a higher density than the l i q u i d can settle down in a sedimentation apparatus. Smaller particles c a n be separated w i t h t h e a i d of flocculants.

The w a s t e / process water flows into the i n l e t channel and down until below the lamellas. It turns and flows through the lamellas up. The p a r t i c l e s settle down o n t o t h e lamellas while the clear w a t e r remains flowing up, It flows through t h e overflow w e i r and to t h e outlet. The sludge slides down on t h e lamellas and is collected in the sludge funnel. To avoid blocking of t h e sludge a scraper can be used if necessary. The sludge is discharged in intervals.

- 2 - telephone: general manager: UST-ID-No.: DE t44439790 bank accounts: +49 I8283 I 2220-0 Alex Leiblein e-mail: Sparkasse Tauberfranken Vdksbank Franken telefax: HRB 460298 bank code: 673 525 85 673 928 00

. .

+49 I 6283 I222B50 Msnnhelm account-No.: 600 012 0 210 449 03 IBAN: DE29673525650005000120 SWIFT-BIC: SOLADES 1 TBB

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page 2 of offer P07069c - engl.doc d a t e d 13-Jun-07 t o Galmoy Mines Ltd.

Technical data:

c l a r i f y i n g surface

type of lamellas lamella distance declination angel length of lamellas material of lamellas

content about sludge content about material of separator dimensions about (I x w x h} weight about

: 200 m2

: Leiblein honeycomb-lamella-filter : 40 mm ; 6 0 " : 2,000 mm : polypropylene

: 5 0 m3 : 10 m3 : carbon steel (coated) : 5,200 x 3,840 x 7 , 0 0 0 mm : 12,000 kg

Prepared for the installation of a scraper.

Design:

at a f low rate of e . g . 2 x 150 m3/h and a clarifying surface of 2 x 200 mz concludes a purification capacity of 0.75 m3/m**hm

Surface coating of the casing:

inside :

outside:

sandblasted (SA 2 - 5 1 , primary coated, coated 2 - 3 layers of epoxide-coating sandblasted (SA 2 . 5 ) , primary coated, painted

(about 400 pm)

For shipment t h e base frame has to be assembled on site.

Itam 2 2 pcs. scraper K 0 . 5 5 for lamella separator

d r i v i n g gear electrical connection insulation class

: 1,500/3.8 rpm : 0 , 5 5 kW, 230/400 V, 50 Hz, 3- : IP 55

- 3 -

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page 3 of o f f e r P07069c - engl.doc dated 13-Jun-07 to Galrnoy Mines L t d .

shaf t -0 x 1 about. material shaft s c raper-0 material scraper

Itam 1-2 for a price of

: 60 x 4,500 - 6,500 KUII : stainless steel AISI 304 : 500 m, v-scraper : stainless s t ee l AISI 304 with 2 plastic-abrasion-blades

E m / PCS. 97,340.-

The prices a re excluding transport and tax.

The additional terms of delivery and payment apply if nothing e lse i s declared.

Price guarantee: 12 w e e k s .

Delivery time:

Payment:

12-14 weeks after e n t r y of order, defining a l l technical and commercially questions and entry of prepayment.

50% a t entry of order 50% a t ready f o r dispatch each 10 days n e t .

We hope, t h a t the o f f e r fits w i t h your expectancy. Please call us if you have questions.

W i t h best regards L E I B L E I N GmbH.

Attached: data sheet Liefer- und Zahlungsbedingungen

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\s I I lamellas

I I DN 100 Y

f

5200 r

T 3840 c

Construction: - heavy steel construction - inside rubber lining - lamellas of polypropylene

Technical data: length of lamellas 2,000 mm lamella distance 40 rnrn clarification surface 200 m2 content about 50 ms sludge content about 10 ms weight net about 12 t

T = shipment dimensions Technical modifications reserved. draw.-No.: 102-0COW54a I wb I 03 July 06

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Appendix 2: Bench Tests carried out on mine water from CW and K1 orebody.

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