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26/02 '96 HON 17:52 [TX/RX NO 6451]

1.3 -BACKGROUND

Noranda 0r1e? E*9 l» . Mines Inc. wis a ra in ing and process ing fac i l i ty to recover go ld and s i lver at the s i te of the abandoned Grey Ea~gl« MinV.~

The Grey Eagle mis i te has been exp lored and operated by a number o f

lSE T i l , 85 y" rS ' ^ , i , ,era, deP°s i t was d iscovered in nr iL tn 10a? ! •/4mih°r ,eve1 o f e*P,or* t ' ° " «nd min ing occurred begun TI .J j l -J l IT>!P| r ,Q tC pr°d"ce conoer concentrate C'u inu iLJ* . .V I - j - * . -Ln l -n f t Cnmpany ' a subs id iary o f Newmon t Hi n jnq - • lE TLI i ' . ,5 ° . ore between 1P41 and 1945. A mi iT bundlnoSPaniero^5 CapaCJty ,°^ 5°b t0n* PeP day ° * ore "^assoc ia ted • ! ' IMS and « 1 .1 "aS dV, , , , °aP*d 00 th<> 5 i te ' The s iU wa5 ^"doned

Noranda. ® ac t iv i ty has taken p lace unt i l development by

The past min ing Act iv i t ies haue s ign i f icant ly a l tered the phys ica l

In South Fork L'IE] r°Cl< ' r0m under9roUnd work ings was deposi ted a«r i ^ Fork Luther Gulch Creek and extens ive areas o f t imber were cut and used in the ml-h.ng and mi l l ing operat ions. Ac id ic water f rom the underground work ings and wast , rock dumps severe ly degraded uat^r

L ,ch of ,h* * , " " t or9,n, im' "u ln9 i*

The Grey Eagle pro ject enta i led the development o f an open p i t mine, an

"nd * ta'1'n9s ««, to r,tain um„9" I H" ? Resul t ing f rom operat ions. The pro ject inc luded a sunn^v d,wers i0 .n ^bannel , waste water t reatment fac i l i t ies , a water

f«mt l«?n 'd *• r °ad! ' aCC*6S r °ad5 ' e"u|Pment maintenance «5 iJ id aoD^imat i i " bu, '2d 'n0s* Th* to ta l area Impacted covered approx imat | ly 45 acres. Min ing a t the Grey Eaole oroJect covered a four and ;bne-hal f year per iod. pro ject

The mm fac l I i ty processed approx imate ly 870,000 tons o f ore recouer ino

'TVI. *r°y °un"* »° ,a «a «-•« o" jS o? ar ind ihn • ^ , ' ' * capb,on"1 n_P«'P process, cons is ts of ore 'L n i o n rnemlll. . iT •V-h,n f i' carbon adsorp t ion, e lec t rowinn Ing, and ,k . i;T a,,,n 9 s f r o m t h e m i l l i n g p r o c e s s f l o w e d b y a r a v i t y r tcy^ Id 'baVk' to min^*4111"98 jmP0"nd, , ,en 4 <or b ' *P°sa l ; water was recyc led back to thfe mi l l for process makeup water . Excess water In the ta i l ings impoundment was wi thdrawn and t reated. Treated water was d isposed of a t a lahd appl icat ion s i te , "

26/02 '96 MON 17:52 [TX/RX NO 6451]

In February 1982 it was discovered that the tailings dazu was leaking about 20-30 gpm of solution containing free cyanide and metal cyanide complexes. The rate of seepage is too high for complete attenuation of die cyanld$ to take place. It is thought that seepage occurred along discrete fractures undgr the embankment foundation and possibly through the grout curtain (State Watef Resources Control Board, 1984). Noranda immediately installed a pumpback pystem (loc.cii.) A collection system was then installed at the toe of the dam. Thilj consists of a slurry wall constructed of bentonite and native backfill to impound alj subsurface flows, a subsurface infiltration gallery and wet well, and a pumping station. A water table depression is maintained within the wet well zone to assure the effectiveness of the slurry wall(CRWQCB, 1987). An additional treatment plaijf was also installed below the toe of the tailings dam to remove contaminants fr§m the tailings dam seepage (CRWQCB, 1987; Myers, 1988, private communication). The design capacity of the plant is 400 gallons per minute (gpm), typical fl$ws being about 100 gpm. The seepage is created by alkaline chlorination, with sancj filter polishing and pH adjustment. The effluent is then discharged to land via ^ leachfield system located on the gravel bar adjacent to the confluence of Luthjr Gulch Creek and

Indian Creek. Self-monitoring reports verified by Regipnal Board staff indicate that although cyanide, copper, iron, zinc, cadmium, mercqry and nickel are present in the wastewater at levels of concern, the effluent consistently attains State and EPA drinking water standards. The current efflucpt jimijjs are (maximum concentrations): 0.2 mg/1 free cyanide, 1.0 zng/1 copper, 0.3 rpg/1 iron, 0.02 mg/1 f zinc, 0.01 mg/1 cadmium, 0.002 mg/1 mercury and Q.7 mg/Tpickel (CRWQCB,

V

-8"

26/02 '96 M0N 17:52 [TX/RX NO 6451]

26/02 '96 MON 17:52 [TX/RX NO 6451]

N9 Oi

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OLIM 1 DT • rVLMMM 1 rl I in I. rUnCO I » ^B"oo » o-urrm » mniLrvvym r\mi jw | W I T " t l o i w r i

€> )

ENFORCEMENT CONFIDENTIAL DRAFT REPORT

4.0 CORPORATE HISTORY

4.1 . SISKON GOLD CORPORATION (formerly known as SISKON

CORPORATION)

Business Address (B04001):

Registered Agent (B04001):

State and Date / of Incorporation (B04001):

j Qoroorate Status (B04001):

Name Changes and Mergers:

350 Crown Point Circle Suite 100 Grass Valley, California 95945

Mr. Scott Bartel Bartel, Eng, Linn, & Schroder 300 Capitol Mall, Suite 1100 Sacramento, California 95814

California (November 4, 1993)

Sob Peqsz- or 'Tim Co//ou>a*f

Active

Siskon Corporation (Nevada) was incorporated in the State of Nevada on October 6, 1931 (B04005)!"^

Siskon Corporation (Delaware) was incorporated, by Sigkon Corporation (Nevada) on July 24, 1969 (B01044, B04003). Siskon Corporation (Nevada) was then merged into Siskon Corporation (Delaware) on September 22, 1969. Siskon Corporation (Delaware) was the surviving corporation and •amimad all assets, liabilities, and business of Siskon Corporation (Nevada) (B04(J05, B01042, B01044).

Siskon Gold Ltd. was formed on August 23, 1991, by the amalgamation of Centurion Gold, Ltd., and U.S. Precious ^ Metals, Inc., both British Columbia corporations (B04004, BOSOdiy On October 16,1991, Siskon Gold Ltd., a Canadian corporation, was domesticated by the incorporation of-Siakon Gpld Corpjjpationjp-Delaware (B01107, B01111, B05001, B05002, B05003).

Siskon Corporation (Delaware) was merged into Siskon Gold Corporation, (Delaware), on October 16, 1991 (B01109). Siskon Gold Corporation was the surviving corporation (B01109 y

Page 21

26/02 '96 M0N 17:52 [TX/RX NO 6451]

WLII > u i » nLninn i 11 nn i • I vltbw I

t . > O ENFORCEMENT CONFIDENTIAL

DRAFT REPORT

Officers fB040Cm

Directors (B01112):

/

Siskon Gold Corporation (California) was formed in California on October 24, 1991, through the'consolidation of Centurion Gold, Ltd., and U.S. Precious Metals, Inc., two Canadian corporations, and their subsidiaries, Centurion Gold, Inc. and U.S. Precious Metals Ltd., both Nevada^£orpora£ions, and Siskon Corporation (Delaware) (B04Cf(5l, B0lfl2). The California Secretary of State indicates that Siskon Gold Corporation (Delaware) was then "merged out" while simultaneously re-incorporated in California on November 4, 1993. Siskon Gold Corporation (Delaware) and Siskon Gold Corporation (California) have listed a common principal executive address (B04001)> Siskon Gold Corporation is an active California corporation (B04001)>

It is recommended that further research be conducted into the simultaneous merging out of existence and re­incorporation of Siskon Gold Corporation (Delaware) and Siskon Gold Corporation (California).

Tim Callaway, President 350 Crown Point Circle Suite 100 Grass Valley, California 95945

Timothy A Callaway Charles D. Snead Michael K. Epstein David A Lawler Scott E. Bartel

1 On an unknown, recent date, Vengold, Inc. purchased 781,250 common shams of Siakon Gold Corporation for $2,000,000 and advanced Siskon Gold Corporation $3,000,000 in exchange for convertible debentures exchangeable at,the rate of $2.56 per share in three yean (B02030). This transaction gave Vengold, Inc. a 16% interest in Siskon Gold Corporation (B02030). In addition, Siskon Gold Corporation issued Vengold, Inc. a total of 4,000,000 stock warrants (B02030). Upon the exercise of the warrants, Vengold, Inc. will hold a 34% interest

in Siskon Gold Corporation (B02030).

Clearly, Vengold, Inc. did not hold any interest in Siskon Gold Corporation while Siskon Gold Corporation was operating at the Siskon Mine. Vengold, Inc. also does not have a controlling interest in Siskon Gold Corporation. Therefore, proving Vengold, Inc. is liable for response costs incurred at the Siskon Mine would be difficult However, this information is noteworthy because it shows an influx of money in Siskon Gold Corporation by a fairly lucrative corporation.

Page 22

26/02 '96 M0N 17:52 [TX/RX NO 6451]

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July 3M. 1931 Mr. John Hannum California Regional Water Quality Control Board Horth Cooat Region 1000 Coddlngtown Center Santa Rosa, CA 95101

- Region 1 P. O. Box 1480, Redding, CA 96099

Water and Sediment Samples - Indian Creek, Luther Gulch, and LeachBt. from Old HUlpond, Siskiyou Couney - Tl7il, R6W, See, 15, 16, and

Water and sediment samples were collected on April 14, 1981 from Luther Gulch, and the leecbaee stream adjacent to the old mlilpondeurrantly aimed by Croman Corporation. The sample locations are shown on the attached

wstor tmple iites denoted by numbers and sediment eampl. -ice. by

letters.

££= sr. HHSZr*-ariT.ssss jwt-

eS5^2Ur-"E£.,rar£S2 -

analyses are shown In Tablss 1 and 2,

Discussion - Indian Creek above Luther Gulch was slightly acid (pH 6.5) and free o heaWSetal contamination. The discharge of copper (Cu) end sine Luth«lulch was detectable in Indian Crock 100 feet below the «uth of Gulch* however, dissolved values were below toxic levels for salmonids. Iron (To) remained below 0.1 mg/1 in Indian Creek. The hW «tal eoncenwetlon (total) in Luther Gulch were similar to those taken on April 17, 1975. The 1975 values were 1.2 mg/1 Cu, 0.52 mg/l Zn, and 2.3 mg/1 Fa.

— - •

below toxic levels. The Federal criteria for cadmium (Cd) in aoft water J°r salmonlds is 0.004 mg/1- Since our results wore reported as less Chan 0.01 mg/ . the actual concentration is not known.

•-••• ~ • \vs

26/02 '96 M0N 17:52 [TX/RX NO 6451]

•r. John liatmuiB

July 3ft, 1981

„™blam associated with' V is the ferric hydroxide P*®*1?" "' Ihe urinary problem aasoeiaceu for 2rashwacar aquarle 1««; federal criteria for Fo in *»*®* :L£, * JJ Slte 4 awl the mixing area below This yalue was exceeded in Indl " , Indian Creek extend downatrean

111!-*. Th. a dlscu»Bloo 1. for a considerable distance below the vlw*ouu. the E?A criteria on lronj

"Th.se proclplt.t.S ,°™f"°h *1 njroth T*jl Clc''llC*-''°Th»T can .ottlo

lag bottom-dwelling Invertebrate ,p • eemcnt-llke materials,

2S — — -unsuitable as spawning sites ....

This is a description of 0 " 'the' e«r

SSJLrSSJTSi - £«— —1 *«•"

Dennis C. Wilson . Associate Watar Quality Biologist

DCW:aa

Attachments

be: v/attacbxgpnts Rogers Cox Baca Bailey Wilson

26/02 '96 MON 17:52 [TX/RX NO 6451]

/•it

L e6** f /

26/02 '96 MON 17:52 [TX/RX NO 6451]

TABLE 1. Water Sanplen from Indian Creek, lather Culch, and !!lllpond Lcacbate, April 14, 1981 j

i

Metals (mg/1)

Sample Location ptl

in Copper Zinc Iron Cadnd.

jUmhoa/cm T — D ~ T D T D T [

1. Upstream from Luther Gulch 6.5 85 .01 .01 <-.01 -i .01 < .1 <M < .'Jl

13, Indian Creek - far Idea In Dappy Camp 6,5 98 £ ,01 » 0.02 - 0,t - < .01

1/ Total 1/ Dltieplved

o z X OS \

Eh

2. Lutliar Culcli - Culvert n <n m

CM o

CO CM

Indian Creek Fond 6.4 123 1.33 0.27 0.59 - J.H 0.5 .'.01

I 5 3. Indian Creek - 130 ft. ;< g

below Luther Culcli 6.8 86 0.03 0.01 0.01 0.01 c .1 <•. 1 z .01 * i to r 03

4. Indian Creek - Beginning j| ' of leacliate from rill 6.7 85 0.01 <.01 0.01 0.02 1.3 1.1 <..01

5. Beginning of leacliate stream along nlllpand 3.2 5200 - 12.3 - 50.3 - 3420 -

i 6. l achate stream - mid­

way alone mlllpood 3.5 2600 0.53 0.53 10.7 10.5 1070 1350

7. Leecbste stream - lower end of nillpond 3.5 1600 0.24 0.24 2.1 2.2 572 562

0. Leachate stream - 20' before Indian Creek 4.5 700 - 0.07 - 0.65 - 150 -

9. Indian Creek - 100' up­stream from leacliate stream 6.9 65 <-.01 < .01 0.01 0.02 <..1 < .1 <-.01

10. Junction Iudlon Creek & leachate discharge 6.6 100 <..01 <1.01 0.26 0.05 7.6 0.5 <.01

11. Indian Creek LOO yd. be- ; low leacliate discharge 0.6 B5 0.02 <.01 0.04 0.01 0.7 0.8 < .01 |

12. Indian Creek - cteel bridge - 1 mi. Iielov 6.3 95 < .01 - 0.01 - 0.2 - < .QL I

I

TABLE 2. Sediment Samples from Mlllpond Tellings end Leaehata Stream Bottom, April 14, 1981

Sample Location

A. Beak of Vllllpond tailings

B. First..leaehata pool

C. Ls&chate stream - lover end of mlllpond

B. Leaehata spring - lover and of mlllpond

X. Leaehata stream - 20 ft* before entering Indian Creak

T. Indian "Creek — bank • below .3maehate stream" '

Hatala mg/1

Copper

121

62

433

250

60

68

Zinc

23

78

63

51

54

66

Iron

110,000

80,000

138.000

240,000

75,000

65.000

Cadmium

0.4

-0.4

-0.4

0.4

0.4

-0.4

26/02 '06 M0N 17:52 [TX/RX NO 6451]

United States Department of Agriculture

Forest Service

Klamath National Forest

1312 Fairlane Road Yreka, CA 96097-9^49 (916) 842-6131

TTY (916) 842-5725

File Code: 2800

Date: Feb. 29, 1996

J<ay Lawrence Emergency Response Section Hazardous Materials Division U.S. Environmental Protection Agency, Region IX 75 Hawthorne Street San Francisco, CA 94105-3901

Dear Ms. Lawrence:

This letter is in reponse to a letter from Celia Bloomfield of the U.S. EPA, dated February 26, 1996, requesting information and file records pertaining to the Old Grey Eagle Mine Tailings/Mill Pond Site, located on Indian Creek near Happy Camp. As requested, we are sending the information to you as lead contact person for the site.

Enclosed is a Draft Report on the Old Grey Eagle Mine Tailing/Mill Pond Site (dated February 29, 1996) in response to your information request. Though the site is situated on private land, pollution problems suspected there may affect the andromous fishery and water quality of Indian Creek, as well as portions of lands managed by the U.S. Forest Service that border Indian Creek downstream from the site.

A copy of this report is also being sent to Celia Bloomfield.

If there are any further questions about the site, please contact Polly Haessig of our Natural Resources Section (916-842-6131). The Klamath National Forest would like to be kept informed of any porgress your agency makes in assessing he situation at the site.

BARABARA HOLDER Forest Supervisor

Enclosures

cc: y

Robert Rohde, Karuk Tribe of Caliifornia

Caring for the Land and Serving People FS-6200-28