N:\BGC\Projects\0499 Knight Piesold\001_Prosperity Gold-Copper\Project Communications\PG09-002_Documentation Error Memo_12June2009_twc.docx

BGC ENGINEERING INC.

1.0 INTRODUCTION BGC Engineering Inc. prepared the draft report entitled Prosperity Gold-Copper Project, Numerical Hydrogeologic Analysis dated June 30, 2008 for the account of Taseko Mines Limited c/o Knight Piésold Limited. The results from this report were used as the basis for evaluating the project effects to the hydrogeologic system in the project area. During our final quality assurance review of the document we identified a documentation error in Section 8.0 which reports the results of solute transport simulations used to evaluate potential effects to groundwater quality down-gradient from the mine foot print. This memorandum identifies the errors and discusses the ramifications to the environmental assessment report, specifically Section 4.3 Groundwater Quantity. The error does not significantly affect the overall results of the environmental assessment of project effects. Sections of the environmental assessment report affected by this error are identified in the attached Table.

2.0 DOCUMENTATION ERROR The documentation error occurred as a result of the inclusion of superseded versions of Figures 38 and 39 in the report, which consider predicted solute concentrations 50 years and 100 years after project initiation. The versions included depicted simulation results from a version of the numerical model that had since been modified. Unfortunately, these figures were used as the basis to write Section 8.6.2 of the numerical assessment report. The discrepancy is termed a documentation error because the simulation results were not incorrect. Therefore, no additional simulations are required. The effects of the error in documentation on reported results are summarized below.

BGC Project Memorandum

To: Taseko Mines Limited Doc.No: PG09-02

Attention: Roderick Bell-Irving cc: Greg Smyth

From: Craig Thompson,Trevor Crozier Date: June 12, 2009

Subject: Documentation Error in June 30, 2008 DRAFT Numerical Hydrogeologic Analysis Report

No. of pages (including this page): 6 Project no: 0499-001-40

Taseko Mines Limited June 12, 2009 DRAFT Documentation Error in June 30, 2008 DRAFT Numerical Hydrogeologic Analysis Report 0499-001-40

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BGC ENGINEERING INC.

In Section 8.6.2 (page 24) of the June 30, 2008 report it was stated:

“In the absence of mitigation measures, impacted groundwater (1% of source conc[entration]) is predicted to reach the Big Onion Lake in about Year 80. By Year 100, impacted groundwater is predicted to be discharging to much of the shoreline of Big Onion Lake at a concentration of approximately 2-3%. At the gully where discharge of impacted groundwater occurred first, the solute concentration is predicted to have reached 70% of the source concentration by Year 100.”

Section 8.2.6. should read as follows:

In the absence of mitigation measures, impacted groundwater (1% of source concentration) is predicted to reach the Big Onion Lake in about Year 52. By Year 100, impacted groundwater is predicted to be discharging to much of the shoreline of Big Onion Lake at a concentration of approximately 1-7%. At the gully where discharge of impacted groundwater occurred first, the solute concentration is predicted to have reached 100% of source concentration by Year 50.

These errors also needed to be addressed in the Executive Summary (page iv) and solute transport Summary and Conclusions section (Section 8.8. page 26) of the report. BGC has corrected these errors in the “Final” version of the report that was issued June 12, 2009.

3.0 DISCUSSION The documentation error will need to be addressed in the environmental assessment application currently under review by the British Columbia Environmental Assessment Office (BCEAO), and specifically will need to be brought to the attention of the primary technical reviewers for the hydrology and the aquatic ecology sections. Overall, the error is not expected to have a significant effect on the prediction of project effects for groundwater quality and aquatic ecology, for the following reasons:

• The transport simulation results affected were concerned with predicted project effects a significant time in the future and considered effects on the hydrogeologic system without seepage mitigation measures. The results of the numerical simulation work identified seepage migration routes and confirmed the need for primary mitigation measures, and identified the potential need for secondary seepage mitigation measures. These conclusions were not affected by the error, and the overall monitoring approach recommended for the project has not changed.

• The areas most affected by the error are down-gradient from the western embankment of the tailings storage facility in the Big Onion and Little Onion Lakes catchments. The need to collect additional surface hydrologic and hydrogeologic data to assess the relative importance of groundwater to these systems was identified as a result of the environmental assessment. This work would be conducted during the construction phase of the project, or more than 8 years prior to the predicted onset of any potential project effects in these catchments. These data would then be

Taseko Mines Limited June 12, 2009 DRAFT Documentation Error in June 30, 2008 DRAFT Numerical Hydrogeologic Analysis Report 0499-001-40

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BGC ENGINEERING INC.

used to refine the water balance and numerical groundwater flow and solute transport simulations in these catchments to refine the monitoring and seepage mitigation needs in the area of the western embankment.

• Due to the uncertainty associated with the predicted project effects to surface and groundwater hydrology in the Big Onion Lake and Little Onion Lake catchments, a conservative water quality prediction methodology was applied for the assessment of effects to water quality and aquatic ecology.

4.0 CLOSURE BGC Engineering Inc. (BGC) prepared this report for the account of Taseko Mines Limited. The material in it reflects the judgment of BGC staff in light of the information available to BGC at the time of report preparation. Any use which a third party makes of this report or any reliance on decisions to be based on it are the responsibility of such third parties. BGC accepts no responsibility for damages, if any, suffered by any third party as a result of decisions made or actions based on this report.

As a mutual protection to our client, the public, and ourselves, all reports and drawings are submitted for the confidential information of our client for a specific project. Authorization for any use and/or publication of this report or any data, statements, conclusions or abstracts from or regarding our reports and drawings, through any form of print or electronic media, including without limitation, posting or reproduction of same on any website, is reserved pending BGC’s written approval. If this report is issued in an electronic format, an original paper copy is on file at BGC and that copy is the primary reference with precedence over any electronic copy of the document, or any extracts from our documents published by others.

We trust the above satisfies your requirements at this time.

Yours sincerely,

BGC ENGINEERING INC. per:

Craig Thompson, M.Sc., G.I.T. Hydrogeologist

Trevor Crozier, M.Eng., P.Eng., CSAP Senior Hydrogeological Engineer

VOLUME 1 – SUMMARY REPORT

Section / Table

Page Paragraph Old Content New Content

9 9-5 4 Groundwater originating from the tailings impoundment will begin affecting water quality in Big Onion Lake in year 66 with 1% concentration of pore-water and peak in about Year 116 with a maximum of 5% pore-water concentration. Based on this prediction, it anticipated that the worst case scenario occurs in approximately Year 116, when the concentration of groundwater entering Big Onion Lake is estimated to contain elevated concentrations of sulphate and dissolved cadmium that exceed the BCWQG. It is anticipated that no other groundwater regime will be affected by the tailings pore-water quality.

In the absence of seepage mitigation measures, groundwater affected by seepage originating from the tailings impoundment is predicted to begin affecting water quality in Big Onion Lake about Year 52. Dissolved concentrations in groundwater reporting to Big Onion Lake would be approximately1% of the tailings pore water concentrations. Dissolved concentrations in groundwater discharging to Big Onion Lake could reach between 1% and 7% of tailings pore water concentrations by year 100. Based on this prediction, and in the absence of seepage mitigation measures, the worst case scenario considered in this assessment occurs in approximately Year 100, when the concentration of groundwater entering Big Onion Lake is estimated to contain elevated concentrations of sulphate and dissolved cadmium that exceed the BCWQG. It is anticipated that no other groundwater regime outside Fish Creek watershed will be affected by the tailings pore-water quality.

VOLUME 4 – PHYSICAL ENVIRONMENT Section /

Table Page Paragraph Old Content New Content

Sec 4.3.2.1 4-110 N/A Figure 4-38 appears to be missing (it is on my CD copy of the EA) Figure 4-38 is provided in the attached e-mail. Sec. 4.3.2.1 4-111 4 Monthly stream flow data for station H4b are provided in Table

4-24. Monthly stream flow data for station H4b are provided in Table 4-21.

Sec 4.3.2.3 4-132 2 By Year 50, the area potentially affected by seepage from the TSF (in the absence of mitigation measures) is predicted to be within approximately 500 m of Big Onion Lake (Figure 4-53).

By Year 50, the area potentially affected by seepage from the TSF (in the absence of mitigation measures) is predicted to be within approximately 50 m of Big Onion Lake (Figure 4-53).

Sec 4.3.2.3 4-132 3 In the absence of mitigation, seepage is predicted to first reach the Big Onion Lake in about Year 80. By Year 100, seepage from the TSF could potentially be discharging to much of the shoreline of Big Onion Lake at concentrations of approximately 2–3% of the source concentration (Figure 4-54).

In the absence of mitigation, seepage is predicted to first reach the Big Onion Lake in about Year 52. By Year 100, seepage from the TSF could potentially be discharging to much of the shoreline of Big Onion Lake at concentrations of approximately 1–7% of the source concentration (Figure 4-54).

Sec 4.3.2.3 4-134 N/A Figure 4-53 is incorrect Correct Figure 4-53 is attached to e-mail Sec 4.3.2.3 4-135 N/A Figure 4-54 is incorrect Correct Figure 4-54 is attached to e-mail Sec 4.3.2.3 4-136 Last (3) Results of the solute transport simulations indicate that diluted seepage from the TSF

could potentially reach Big Onion Lake in the absence of seepage mitigation measures by about Year 80 of mining.

Results of the solute transport simulations indicate that diluted seepage from the TSF could potentially reach Big Onion Lake in the absence of seepage mitigation measures by about Year 52 of mining.

Sec 4.3.2.3 4-137 1 …that solute concentrations that could potentially report to Big Onion Lake by Year 100 range from <1% (hydraulic conductivity decreased by a factor of five) to as much as 5% (hydraulic conductivity increased by a factor of 5% or inclusion of dispersion effects) of the source concentration. Solute transport times to Big Onion Lake are demonstrated to decrease by several years (e.g., 3–5 years) but are still on the order of 80 years for the increased hydraulic conductivity and simulated dispersion cases.

…that solute concentrations that could potentially report to Big Onion Lake by Year 100 range from <1% (hydraulic conductivity decreased by a factor of five) to as much as 7% (hydraulic conductivity increased by a factor of 5 or inclusion of dispersion effects) of the source concentration. Solute transport times to Big Onion Lake are demonstrated to decrease by several years (e.g., 3–5 years) but are still on the order of 50 years for the increased hydraulic conductivity and simulated dispersion cases.

Sec. 4.4.2.3 4-161 2 It is anticipated that the plume of groundwater originating from the tailings impoundment will reach Big Onion Lake in Year 80 of the Project life and will have been diluted so that <1% of the original concentrations of parameters of the tailings pore-water will affect the water quality of the lake. In addition, at approximately Year 100 of the Project life, the plume concentration will reach between <1% and 5%.

In the absence of seepage mitigation measures, a plume of groundwater affected by seepage from the tailings impoundment is predicted to reach Big Onion Lake about Year 52 of the Project life and will have been diluted so that approximately 1% of the original concentrations of parameters of the tailings pore-water will affect the water quality of the lake. In addition, at approximately Year 100 of the Project life, the plume concentration will reach between 1% and 7%.

Sec. 4.4.2.3 4-161 3 Specifically, at Year 80, groundwater reaching the Little and Big Onion Lake system will have been affected by the tailings pore water in that it will consists of a mixture of <1% (by volume) of TSF pore water and >99% background groundwater. Over the next 20 years (from Year 80 to 100) the mixture will gradually change to between <1% and 5% TSF pore water with the remainder consisting of background groundwater. At about 2.5% concentration, only two parameters exceed the applicable BC Water Quality Guidelines: • the concentration of dissolved cadmium is approximately 0.203 μg/L which exceeds

the BC WQG guideline of 0.046 μg/L • the concentration of sulphate is 103.2 mg/L which exceeds the BC WQG guidelines

of 100 mg/L

Specifically, at Year 52, groundwater reaching the Little and Big Onion Lake system will have been affected by the tailings pore water in that it will consists of a mixture of 1% (by volume) of TSF pore water and 99% background groundwater. Over the next 48 years (from Year 52 to 100) the mixture will gradually change to between 1% and 7% TSF pore water with the remainder consisting of background groundwater. At about 5% concentration, only two parameters exceed the applicable BC Water Quality Guidelines: • the concentration of dissolved cadmium is approximately 0.203 μg/L which

exceeds the BC WQG guideline of 0.046 μg/L • the concentration of sulphate is 103.2 mg/L which exceeds the BC WQG

guidelines of 100 mg/L Sec. 4.4.2.3 4-161 6 The average groundwater quality conditions for the various scenarios (1, 2.5 and 5%

pore water discharge) are presented in Table 4-32, along with the ratios of the baseline data to the relevant guidelines. The discussion below is for the worst case scenario of 5% tailings pore-water discharge to Big Onion Lake.

The average groundwater quality conditions for the various scenarios (1, 2.5 and 5% pore water discharge) are presented in Table 4-32, along with the ratios of the baseline data to the relevant guidelines. The discussion below is for the moderate worst case scenario of 5% tailings pore-water discharge to Big Onion Lake.

Sec. 4.4.2.3 4-161 7 The groundwater is expected to be slightly less alkaline (pH 8.05) with a hardness of 147 mg/L CaCO3. The concentrations of all parameters are expected to increase after Year 80, when a <1% plume reaches Big Onion Lake, to Year 100 when the maximum plume concentration of less than 5% is reached. However, the concentrations of only two parameters are expected to exceed the BC Water Quality Guidelines: Sulphate, and Cadmium, as identified above. All other parameters are not expected to exceed the applicable BCWQG.

The groundwater is expected to be slightly less alkaline (pH 8.05) with a hardness of 147 mg/L CaCO3. The concentrations of all parameters are expected to increase after Year 52, when a 1% plume reaches Big Onion Lake, to Year 100 when plume concentration of up to 7% is reached. However, the concentrations of only two parameters are expected to exceed the BC Water Quality Guidelines: Sulphate, and Cadmium, as identified above. All other parameters are not expected to exceed the applicable BCWQG.

Sec. 4.4.2.4 4-166 1 Based on the above discussion, it is anticipated that the plume of groundwater originating from the tailings impoundment will begin affecting water quality in Big Onion Lake in year 80 with <1% concentration of pore-water and increase by Year 100 to a concentration of between <1 and 5% of pore-water. In approximately Year 100, the concentration of groundwater entering Big Onion Lake is estimated to contain elevated concentrations of sulphate and dissolved cadmium that exceed the BCWQG.

Based on the above discussion, it is anticipated that the plume of groundwater originating from the tailings impoundment will begin affecting water quality in Big Onion Lake in year 52 with 1% concentration of pore-water and increase by Year 100 to a concentration of between 1 and 7% of pore-water. In the absence of seepage mitigation, in approximately Year 100, the concentration of groundwater entering Big Onion Lake is estimated to contain elevated concentrations of sulphate and dissolved cadmium that exceed the BCWQG.

VOLUME 5 – BIOTIC ENVIRONMENT Section /

Table Page Paragraph Old Content New Content

Sec. 2.3.1.4 2-73 1 groundwater flow direction becomes possible in about Year 8 of operations and, in the absence of mitigation, groundwater containing diluted concentrations tailings pore water seepage is predicted to begin reaching Big Onion Lake in approximately Year 80.

groundwater flow direction becomes possible in about Year 8 of operations and, in the absence of mitigation, groundwater containing diluted concentrations of tailings pore water seepage is predicted to begin reaching Big Onion Lake in approximately Year 52.

Sec. 2.3.1.4 2-73 2 As such, there is the potential for TSF seepage water to recharge the groundwater and migrate to Big Onion Lake. This is a relatively slow process and effects on surface water are not anticipated until Year 80 of the Project life (60 years after closure).

As such, there is the potential for TSF seepage water to recharge the groundwater and migrate to Big Onion Lake. This is a relatively slow process and effects on the lake water are not anticipated until about Year52 of the Project life (32 years after closure).

Sec. 2.3.1.4 2-73 4 At Year 80, groundwater affected by TSF seepage (groundwater at 1% of the source, i.e., porewater concentration) is predicted to be discharging to Big Onion Lake. By year 100, the best estimate transport prediction is that groundwater at 2 to 3% of the source concentration will be discharging to Big Onion Lake, although this may range from 0 to 5% based on sensitivity analyses conducted as part of the numerical simulations. To provide a conservative estimate, a maximum value of 5% of the source concentration has been used to calculate groundwater quality entering Big Onion Lake.

At Year 52, groundwater affected by TSF seepage (groundwater at 1% of the source, i.e., porewater concentration) is predicted to be discharging to Big Onion Lake. By year 100, the best estimate transport prediction is that groundwater at 1 to 7% of the source concentration will be discharging to Big Onion Lake. To provide a reasonably conservative estimate, a value of 5% of the source concentration has been used to calculate groundwater quality entering Big Onion Lake.

Sec. 2.3.1.4 2-74 3 Baseline groundwater quality at the western embankment area, predicted undiluted TSF porewater and predicted worst case post-closure groundwater quality flowing into Big Onion Lake at year 100 (assuming 5% of groundwater consists of TSF porewater) are presented in Table 2-21.

Baseline groundwater quality at the western embankment area, predicted undiluted TSF porewater and predicted moderate worst case post-closure groundwater quality flowing into Big Onion Lake at year 100 (assuming 5% of groundwater consists of TSF porewater) are presented in Table 2-21.

9000 10000 11000 12000 13000 14000 15000Model X (m)

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4000

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6000

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8000

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1325

1325 1350

13501350

1375

1375

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14001425

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1475

1475

1475

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1575

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14001425

1425 1450

1450

1450

1475

1475

1475

1500

1500

1500

1500

1500

1525

1525

1525

15501550

1575