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Kathy Townsend Court Reporters(505) 243-5018 Fax (505) 243-3606

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· · · · · · · · · · ··STATE OF NEW MEXICO·1·

· · · · · · ··BEFORE THE SECRETARY OF ENVIRONMENT·2·

· · · · · · · · · · · ·No. GWB 18-06(P)·3·

· ··4·

· ·IN THE MATTER OF THE APPLICATION·5·

· ·OF NEW MEXICO COPPER CORPORATION FOR· ·

· ·A GROUNDWATER DISCHARGE PERMIT FOR·6·

· ·THE COPPER FLAT MINE, DP-1840· ·

· ··7·

· ··8·

· ··9·

· ·10·

· ·11·

· ·12·

· · · · · · · · · ·TRANSCRIPT OF PROCEEDINGS13·

· ·14·

· · · · · · · · · · · · · ·Volume 115·

· ·16·

· · · · · · ·BE IT REMEMBERED that on the 24th day of17·

· ·September, 2018, this matter came on for hearing before18·

· ·FELICIA ORTH, Hearing Officer, at the Ralph Edwards19·

· ·Auditorium in Truth or Consequences, New Mexico, at the20·

· ·hour of 9:06 a.m.21·

· ·22·

· ·23·

· ·24·

· ·25·

2

· · · · · · · · · · ·A P P E A R A N C E S·1·· ·The Hearing Officer:·2·· · · ··FELICIA ORTH·3·· · · ··Hearing Officer· ·· · · ··20 Barranca Road·4·· · · ··Los Alamos, New Mexico··87544· ·· · · ··felicia.l.orth@gmail.com·5·· ·For the New Mexico Environment Department:·6·· · · ··ANDREW P. KNIGHT·7·· · · ··Assistant General Counsel· ·· · · ··New Mexico Environment Department·8·· · · ··Office of General Counsel· ·· · · ··121 Tijeras Avenue, Northeast·9·· · · ··Suite 1000· ·· · · ··Albuquerque, New Mexico··8750210·· · · ··(505) 222-9540· ·· · · ··andrew.knight@state.nm.us11·· ·For New Mexico Copper Corporation:12·· · · ··STUART R. BUTZIER13·· · · ··MODRALL, SPERLING, ROEHL, HARRIS & SISK, PA· ·· · · ··Attorneys at Law14·· · · ··500 Fourth Street, Northwest· ·· · · ··Suite 100015·· · · ··Albuquerque, New Mexico··87102· ·· · · ··(505) 848-183216·· · · ··sbutzier@modrall.com· ·· ·17·· ·For the Turner Ranch Properties, LP, and Hillsboro18·· ·Pitchfork Ranch, LLC:· ·· ·19·· · · ··CHARLES de SAILLAN· ·· · · ··NEW MEXICO ENVIRONMENTAL LAW CENTER20·· · · ··1405 Luisa Street· ·· · · ··Suite 521·· · · ··Santa Fe, New Mexico··87505-4074· ·· · · ··(505) 989-902222·· · · ··cdesaillan@nmelc.org· ·· ·23·· ·24·· ·25·

3

· · · · · · · ·A P P E A R A N C E S (Continued)·1·· ·For the Elephant Butte Irrigation District:·2·· · · ··SAMANTHA R. BARNCASTLE·3·· · · ··BARNCASTLE LAW FIRM· ·· · · ··Attorneys at Law·4·· · · ··Post Office Box 1556· ·· · · ··Las Cruces, New Mexico··88004·5·· · · ··(575) 636-2377· ·· · · ··samantha@h2o-legal.com·6·· ··7·· ··8·· ··9·· ·10·· ·11·· ·12·· ·13·· ·14·· ·15·· ·16·· ·17·· ·18·· ·19·· ·20·· ·21·· ·22·· ·23·· ·24·· ·25·

4

· · · · · · · · · · · · · ·I N D E X·1·· · · · · · · · · · · · · · · · · · · · · · · · ··PAGE·2·· ·JEFFREY SMITH·3·· · · ··Direct Examination by Mr. Butzier· · · · · ·39·4·· ·JEFFREY SMITH and JUAN VELASQUEZ·5·· · · ··Cross Examination by Mr. de Saillan· · · · ·58·6·· · · ··Cross Examination by Ms. Barncastle· · · · ·73·7·· · · ··Redirect Examination by Mr. Butzier· · · · ·76·8·· · · ··Examination by Ms. Brittan· · · · · · · · ··81·9·· · · ··Examination by Ms. Nicoll· · · · · · · · · ·8210·· · · ··Examination by Mr. Garcia· · · · · · · · · ·8311·· · · ··Further Examination by Ms. Nicoll· · · · · ·8412·· · · ··Further Examination by Ms. Brittan· · · · ··8513·· · · ··Examination by Mr. Bokich· · · · · · · · · ·8714·· ·STEVEN FINCH15·· · · ··Direct Examination by Mr. Butzier· · · · · ·9016·· · · ··Direct Examination (Continued) by17·· · · · ·Mr. Butzier· · · · · · · · · · · · · · · ·15818·· · · ··Cross Examination by Mr. de Saillan· · · ··16419·· · · ··Cross Examination by Ms. Barncastle· · · ··18720·· · · ··Examination by Ms. Brittan· · · · · · · · ·20421·· · · ··Examination by Mr. Mijal· · · · · · · · · ·20622·· · · ··Examination by Ms. Uphus· · · · · · · · · ·20923·· · · ··Redirect Examination by Mr. Butzier· · · ··21324·· · · ··Recross Examination by Mr. de Saillan· · ··22025·

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Kathy Townsend Court Reporters(505) 243-5018 Fax (505) 243-3606

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· · · · · · · · · · ·I N D E X (Continued)·1·· · · · · · · · · · · · · · · · · · · · · · · · ··PAGE·2·· ·STEVEN FINCH (Continued)·3·· · · ··Examination by Mr. Bokich· · · · · · · · ··221·4·· ·HARVEY CHATFIELD·5·· · · ··Public Comment· · · · · · · · · · · · · · ·138·6·· ·RHONDA BRITTAN·7·· · · ··Public Comment· · · · · · · · · · · · · · ·140·8·· ·BRUCE SWINGLE·9·· · · ··Public Comment· · · · · · · · · · · · · · ·14310·· ·RAY IRWIN11·· · · ··Public Comment· · · · · · · · · · · · · · ·15212·· ·KENNETH LYON13·· · · ··Public Comment· · · · · · · · · · · · · · ·15514·· ·RUTH GRIFFITHS15·· · · ··Direct Examination by Mr. Butzier· · · · ··22416·· ·RUTH GRIFFITHS AND ROB BOWELL17·· · · ··Cross Examination by Mr. de Saillan· · · ··28318·· · · ··Cross Examination by Ms. Barncastle· · · ··30019·· ·20·· ·21·· ·22·· ·23·· ·24·· ·25·

6

· · · · · · · · · · · ··E X H I B I T S·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION:·3·

· ·NMCC Exhibit 1.··Resume of Jeffrey Smith· · · · · ·80·4·

· ·NMCC Exhibit 2.··PowerPoint presentation by· · · ··80·5·

· · · ··Jeffrey Smith·6·

· ·NMCC Exhibit 3.··Resume of Juan Velasquez· · · · ··80·7·

· ·NMCC Exhibit 4.··Resume of Katie Emmer· · · · · · ·80·8·

· ·NMCC Exhibit 5.··M3 Engineering & Technology· · · ·80·9·

· · · ··Corporation Copper Flat Project Form10·

· · · ··43-101F1 Technical Report Feasibility11·

· · · ··Study, New Mexico, USA, 201312·

· ·NMCC Exhibit 6.··New Mexico State University· · · ·8013·

· · · ··Arrowhead Center The Socioeconomic14·

· · · ··Impacts of THEMAC Resources Group Ltd.15·

· · · ··Copper Flat Mine Project in Sierra County,16·

· · · ··New Mexico, 201217·

· ·NMCC Exhibit 7.··New Mexico Copper Corporation's· ·8018·

· · · ··Financial Assurance Proposal and Supporting19·

· · · ··Material20·

· ·NMCC Exhibit 8.··Joint Powers Agreement Between· ··8021·

· · · ··New Mexico Energy, Minerals and Natural22·

· · · ··Resources Department and New Mexico23·

· · · ··Environment Department24·

· ·25·

7

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 9.··Memorandum of Understanding· · · ·80·4·

· · · ··Between The New Mexico Environment·5·

· · · ··Department And The US Bureau of Land·6·

· · · ··Management New Mexico State Office·7·

· ·NMCC Exhibit 10.··Resume of Steven Finch· · · · ··163·8·

· ·NMCC Exhibit 11.··PowerPoint presentation by· · ··163·9·

· · · ··Steven Finch10·

· ·NMCC Exhibit 12.··THEMAC Resources letter, Re:· ··16311·

· · · ··Additional Water Balance Detail for12·

· · · ··Copper Flat Mining Scenarios Considered13·

· · · ··by BLM Proposed Action, Alternative 1,14·

· · · ··and Alternative 2, March 8, 201715·

· ·NMCC Exhibit 13.··Advances in Geology of the· · ··16316·

· · · ··Porphyry Copper Deposits, Southwestern17·

· · · ··North America, Geology of the Copper Flat18·

· · · ··Porphyry Copper Deposit, Hillsboro,19·

· · · ··Sierra County, New Mexico20·

· ·NMCC Exhibit 14.··JSAI, Technical Memorandum,· · ·16321·

· · · ··Subject:··Copper Flat open pit area22·

· · · ··groundwater chemistry data and23·

· · · ··application to SRK geochemistry model,24·

· · · ··September 26, 201725·

8

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 15.··JSAI, Technical Memorandum,· · ·163·4·

· · · ··Subject:··Post reclamation open pit·5·

· · · ··surface area storm-water runoff·6·

· · · ··calculations, Copper Flat Project,·7·

· · · ··New Mexico Copper Corporation, September·8·

· · · ··25, 2017·9·

· ·NMCC Exhibit 16.··JSAI, Technical Memorandum,· · ·16310·

· · · ··Subject:··Hydrologic Effects of proposed11·

· · · ··Rapid Fill Reclamation of Copper Flat12·

· · · ··Open Pit, October 12, 201713·

· ·NMCC Exhibit 17.··10th International· · · · · · ··16314·

· · · ··Conference on Acid Rock Drainage & IMWA15·

· · · ··Annual Conference, Water balance modeling16·

· · · ··of preferential flow in waste rock17·

· · · ··materials, 201518·

· ·NMCC Exhibit 18.··USGS, Documentation of the· · ··16319·

· · · ··Unsaturated-Zone Flow (UZF1) Package for20·

· · · ··Modeling Unsaturated Flow Between the21·

· · · ··Land Surface and the Water Table with22·

· · · ··MODFLOW-2005, Chapter 19 Section A,23·

· · · ··Ground Water, of Book 6, Modeling24·

· · · ··Techniques, 200625·

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Kathy Townsend Court Reporters(505) 243-5018 Fax (505) 243-3606

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· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 19.··Hydrology of Waste Rock· · · · ·163·4·

· · · ··Dumps, MEND Associate Project PA-1,·5·

· · · ··July 1995·6·

· ·NMCC Exhibit 20.··Proceedings America· · · · · · ·163·7·

· · · ··Society of Mining and Reclamation,·8·

· · · ··Application of Unsaturated Zone·9·

· · · ··Hydrology at Waste Rock Facilities:10·

· · · ··Design of Soil Covers and Prediction of11·

· · · ··Seepage, 199912·

· ·NMCC Exhibit 21.··Resume of Ruth Griffiths· · · ··28113·

· ·NMCC Exhibit 22.··PowerPoint presentation by· · ··28114·

· · · ··Ruth Griffiths15·

· ·NMCC Exhibit 23.··Resume of Rob Bowell· · · · · ··28116·

· ·NMCC Exhibit 24.··Resume of Amy Prestia· · · · · ·28117·

· ·NMCC Exhibit 25.··Elsevier, hydrometallurgy 73,· ·28118·

· · · ··Investigation of the leaching of19·

· · · ··chalcopyrite ore in acidic solutions,20·

· · · ··200321·

· ·NMCC Exhibit 26.··Aquatic Consultants, Inc.,· · ··28122·

· · · ··Copper Flat Mine Biological Assessment,23·

· · · ··November 201424·

· ·25·

10

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 27.··ASTM International, Standard· ··281·4·

· · · ··Test Method for Accelerated Weathering of·5·

· · · ··Solid Materials Using a Modified Humidity·6·

· · · ··Cell, 1996·7·

· ·NMCC Exhibit 28.··ASTM International, Standard· ··281·8·

· · · ··Test Method for Column Percolation·9·

· · · ··Extraction of Mine Rock by the Meteoric10·

· · · ··Water Mobility Procedure, 201311·

· ·NMCC Exhibit 29.··PTI Environmental Services· · ··28112·

· · · ··and Santa Fe Pacific Gold Corporation,13·

· · · ··Limnologic Conditions in Three Existing14·

· · · ··Nevada Pit Lakes:··Observations and15·

· · · ··Modeling Using CE-QUAL-W216·

· ·NMCC Exhibit 30.··The University of Chicago· · · ·28117·

· · · ··Press, The Journal of Geology, Limits of18·

· · · ··the Natural Environment in Terms of pH19·

· · · ··and Oxidation-Reduction Potentials,20·

· · · ··May 196021·

· ·22·

· ·23·

· ·24·

· ·25·

11

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 31.··Australian Centre for Mining· ··281·4·

· · · ··Environmental Research, Comparison of·5·

· · · ··Oxidation Rates of Sulfidic Mine Wastes·6·

· · · ··Measured in the Laboratory and Field,·7·

· · · ··February 2000·8·

· ·NMCC Exhibit 32.··Mineralogical Association of· ··281·9·

· · · ··Canada, Environmental Geochemistry of10·

· · · ··Sulfide Mine Waste, Chapter 4, Mineralogy11·

· · · ··of Ochre Deposits Formed by Sulfide12·

· · · ··Oxidation, 199413·

· ·NMCC Exhibit 33.··Pergamon, Applied· · · · · · · ·28114·

· · · ··Geochemistry, Sorption of arsenic by iron15·

· · · ··oxides and oxyhydroxides in soils, 199416·

· ·NMCC Exhibit 34.··The Geological Society of· · · ·28117·

· · · ··London, Mine Water Hydrogeology and18·

· · · ··Geochemistry, The hydrogeochemical19·

· · · ··dynamics of mine pit lakes, 200220·

· ·21·

· ·22·

· ·23·

· ·24·

· ·25·

12

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 35.··Geology and Ore Deposits· · · ··281·4·

· · · ··2000: The Great Basin and Beyond·5·

· · · ··Proceedings Volume II, Geochemical·6·

· · · ··Predictions of Metal Leaching and Acid·7·

· · · ··Generation: Geologic Controls and·8·

· · · ··Baseline Assessment, 2000·9·

· ·NMCC Exhibit 36.··Bureau of Land Management,· · ··28110·

· · · ··Nevada Bureau of Land Management Rock11·

· · · ··Characterization and Water Resources12·

· · · ··Analysis Guidance for Mining Activities,13·

· · · ··200814·

· ·NMCC Exhibit 37.··US Geological Survey· · · · · ··28115·

· · · ··Professional Paper, Geological Survey16·

· · · ··Research 1966, Uphole Seismic17·

· · · ··Measurements as an Indication of Stress18·

· · · ··Relief in Granitic Rock Tunnels19·

· ·NMCC Exhibit 38.··Elsevier, Chemical Geology· · ··28120·

· · · ··244, Sensitivity analyses in pit lake21·

· · · ··prediction, Martha mine, New Zealand 2:22·

· · · ··Geochemistry, water-rock reactions, and23·

· · · ··surface adsorption, 200724·

· ·25·

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· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 39.··Am. Chem. Soc. Symp. Series· · ·281·4·

· · · ··550, Environmental Geochemistry of·5·

· · · ··Sulfide Oxidation, Chapter 23, Secondary·6·

· · · ··Iron-Sulfate Minerals as Sources of·7·

· · · ··Sulfate and Acidity·8·

· ·NMCC Exhibit 40.··Pergamon Press Ltd, Applied· · ·281·9·

· · · ··Geochemistry, Vol. 9, Reactivity of10·

· · · ··aquatic iron (III) oxyhydroxides -11·

· · · ··implications for redox cycling of iron12·

· · · ··in natural waters, 199413·

· ·NMCC Exhibit 41.··Elsevier, Journal of· · · · · ··28114·

· · · ··Chemical Exploration 64, Predicting the15·

· · · ··effects of evapoconcentration on water16·

· · · ··quality in mine pit lakes, 31 May 199817·

· ·NMCC Exhibit 42.··Pergamon, Applied· · · · · · · ·28118·

· · · ··Geochemistry 14, Review, Geochemical and19·

· · · ··equilibrium trends in mine pit lakes, 199920·

· ·NMCC Exhibit 43.··Proc 7th International· · · · ··28121·

· · · ··Symposium on Water-Rock Interaction,22·

· · · ··Geochemical classification of mine23·

· · · ··drainages and natural drainages in24·

· · · ··mineralized areas, 199225·

14

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 44.··Pergamon, Wat. Sci. Tech.· · · ·281·4·

· · · ··Vol. 28, Sediment Quality Objectives and·5·

· · · ··Criteria Development in Germany, 1993·6·

· ·NMCC Exhibit 45.··Elsevier Science Publishers,· ··281·7·

· · · ··Colloids and Surfaces, 59, Physical·8·

· · · ··chemical interpretation of primary·9·

· · · ··charging behaviour of metal (hydr)oxides10·

· ·NMCC Exhibit 46.··INTERA, Baseline Data· · · · · ·28111·

· · · ··Characterization Report for Copper Flat12·

· · · ··Mine, Sierra County, New Mexico, Draft,13·

· · · ··February 201214·

· ·NMCC Exhibit 47.··INTERA, Baseline Data· · · · · ·28115·

· · · ··Characterization Report for Copper Flat16·

· · · ··Mine, Sierra County, New Mexico, Draft,17·

· · · ··addendum, February 201218·

· ·NMCC Exhibit 48.··Mining Engineering,· · · · · · ·28119·

· · · ··Technical Papers, Stratification controls20·

· · · ··of pit mine lakes, February 200921·

· ·NMCC Exhibit 49.··JSAI, Amendment to the Stage· ··28122·

· · · ··I Abatement Plan Proposal for the Copper23·

· · · ··Flat Mine, October 14, 201124·

· ·25·

15

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 50.··JSAI, Conceptual Model of· · · ·281·4·

· · · ··Groundwater Flow in the Animas Uplift·5·

· · · ··and Palomas Basin, Copper Flat Project,·6·

· · · ··Sierra County, New Mexico, May 22, 2012·7·

· ·NMCC Exhibit 51.··JSAI, Technical Memorandum,· · ·281·8·

· · · ··Subject:··Review of methods and·9·

· · · ··assumptions for predicting open pit water10·

· · · ··quality, Copper Flat Project, New Mexico,11·

· · · ··December 17, 201412·

· ·NMCC Exhibit 52.··JSAI, Technical Memorandum,· · ·28113·

· · · ··Subject:··Estimated evaporation rate for14·

· · · ··future Copper Flat open pit, September 1,15·

· · · ··201516·

· ·NMCC Exhibit 53.··JSAI, Draft Technical· · · · · ·28117·

· · · ··Memorandum, Subject:··Proposed Copper Flat18·

· · · ··open pit reclamation plan and inputs for19·

· · · ··evaluating water quality predictions,20·

· · · ··March 25, 201521·

· ·22·

· ·23·

· ·24·

· ·25·

16

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 54.··JSAI, Technical Memorandum,· · ·281·4·

· · · ··Subject: Copper Flat open pit area·5·

· · · ··groundwater chemistry data and application·6·

· · · ··to SRK geochemistry model, September 26,·7·

· · · ··2017·8·

· ·NMCC Exhibit 55.··JSAI, Technical Memorandum,· · ·281·9·

· · · ··Subject:··Expected selenium concentrations10·

· · · ··from supply Wells PW-1 through PW-4,11·

· · · ··Copper Flat Project, New Mexico Copper12·

· · · ··Corporation, September 26, 201713·

· ·NMCC Exhibit 56.··Elsevier, International· · · · ·28114·

· · · ··Journal of Rock Mechanics and Mining15·

· · · ··Sciences & Geomechanics Abstracts,16·

· · · ··Volume 21, Evaluation of17·

· · · ··excavation-induced changes in rock18·

· · · ··permeability, June 198419·

· ·NMCC Exhibit 57.··Plenum Publishing· · · · · · · ·28120·

· · · ··Corporation, Atomic Energy, Vol. 82,21·

· · · ··Performance Estimation in Exploiting22·

· · · ··the Yuzhnoe Uranium Deposit by23·

· · · ··Underground Leaching, 199724·

· ·25·

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17

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 58.··Klohn-Crippen Consultants· · · ·281·4·

· · · ··Ltd and Placer Dome Canada Limited,·5·

· · · ··Mineralogical Changes During NP·6·

· · · ··Determinations and Their Implications,·7·

· · · ··1997·8·

· ·NMCC Exhibit 59.··Department of Mining and· · · ··281·9·

· · · ··Mineral Process Engineering, University10·

· · · ··of British Columbia, Determination of11·

· · · ··Neutralization Potential in the12·

· · · ··Prediction of Acid Rock Drainage, 199713·

· ·NMCC Exhibit 60.··Elsevier, Advances in Water· · ·28114·

· · · ··Resources 29, Upscaling geochemical15·

· · · ··reaction rates using pore-scale network16·

· · · ··modeling, 200517·

· ·NMCC Exhibit 61.··Elsevier, Gechimica et· · · · ··28118·

· · · ··Cosmochimica Acta 72, Scale dependence of19·

· · · ··mineral dissolution rates within single20·

· · · ··pores and fractures, 200821·

· ·NMCC Exhibit 62.··Elsevier, Minerals· · · · · · ··28122·

· · · ··Engineering 18, Heap leaching kinetics are23·

· · · ··proportional to the irrigation rate24·

· · · ··divided by heap height, 200525·

18

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 63.··Buka Environmental and· · · · ··281·4·

· · · ··Kuipers & Associates, Predicting Water·5·

· · · ··Quality at Hardrock Mines, Methods and·6·

· · · ··Models, Uncertainties, and·7·

· · · ··State-of-the-Art, 2005·8·

· ·NMCC Exhibit 64.··New Mexico Bureau of Mines· · ··281·9·

· · · ··and Mineral Resources, Geology and10·

· · · ··Evolution of the Copper Flat Porphyry11·

· · · ··System, Sierra County, New Mexico,12·

· · · ··February 1, 200113·

· ·NMCC Exhibit 65.··Environmental Geochemistry· · ··28114·

· · · ··International Pty Ltd, Advances in Acid15·

· · · ··Drainage Prediction Using the Net Acid16·

· · · ··Generating (NAG) Test, 199717·

· ·NMCC Exhibit 66.··University of Queensland· · · ··28118·

· · · ··and others, Effect of Fracture19·

· · · ··Permeability on Connectivity of20·

· · · ··Fracture Networks, 200921·

· ·NMCC Exhibit 67.··MDAG.com Internet Case Study· ··28122·

· · · ··22, Should a Humidity-Cell Sample Be23·

· · · ··Gently Agitated During Testing?··200624·

· ·25·

19

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 68.··Pergamon Press Ltd,· · · · · · ·281·4·

· · · ··Applied Geochemistry, Vo. 7, Processes·5·

· · · ··controlling acid attenuation in the·6·

· · · ··unsaturated zone of a Triassic sandstone·7·

· · · ··aquifer (U.K.), in the absence of·8·

· · · ··carbonate minerals, 1992·9·

· ·NMCC Exhibit 69.··US Geological Survey, The· · · ··28110·

· · · ··Environmental Geochemistry of Mineral11·

· · · ··Deposits, Chapter 6, Geochemistry of Acid12·

· · · ··Mine Waters, 199913·

· ·NMCC Exhibit 70.··Soil Science Society of· · · · ··28114·

· · · ··America, Acid Sulfate Weathering, Chapter15·

· · · ··3, Aqueous Pyrite Oxidation and the16·

· · · ··Consequent Formation of Secondary Iron17·

· · · ··Minerals, 198218·

· ·NMCC Exhibit 71.··US Geological Survey,· · · · · ··28119·

· · · ··Water-Resources Investigations Report20·

· · · ··99-4259, User's Guide to PHREEQC (Version21·

· · · ··2) - A Computer Program for Speciation,22·

· · · ··Batch-Reaction, One-Dimensional Transport,23·

· · · ··and Inverse Geochemical Calculations, 201024·

· ·25·

20

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 72.··Mine Water and the· · · · · · ··281·4·

· · · ··Environment 22, Technical Article, The·5·

· · · ··Limnology of Summer Camp Pit Lake:··A·6·

· · · ··Case Study·7·

· ·NMCC Exhibit 73.··Ministry of Employment and· · ··281·8·

· · · ··Investment, Reclamation Section, Energy·9·

· · · ··and Minerals Division, Draft Guidelines10·

· · · ··and Recommended Methods for the Prediction11·

· · · ··of Metal Leaching and Acid Rock Drainage12·

· · · ··at Minesites in British Columbia, April,13·

· · · ··199714·

· ·NMCC Exhibit 74.··New Mexico Bureau of Geology· ··28115·

· · · ··and Mineral Resources Open-file report 475,16·

· · · ··The Natural Defenses of Copper Flat, Sierra17·

· · · ··County, New Mexico, August 200318·

· ·NMCC Exhibit 75.··Economic Geology, Vo. 98,· · · ·28119·

· · · ··Tectono-Magmatic Precursors for Porphyry20·

· · · ··Cu-(Mo-Au) Deposit Formation, 200321·

· ·NMCC Exhibit 76.··Oxygen Transport, Chapter 8,· ··28122·

· · · ··Sulfide Oxidation Mechanisms:··Controls23·

· · · ··and Rates of Oxygen Transport24·

· ·25·

6

Kathy Townsend Court Reporters(505) 243-5018 Fax (505) 243-3606

21

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 77.··Minerals Engineering, 22,· · · ·281·4·

· · · ··Humidity cell tests for the prediction·5·

· · · ··of acid rock drainage, 2009·6·

· ·NMCC Exhibit 78.··Elsevier Scientific· · · · · · ·281·7·

· · · ··Publishing Company, Colloids and Surfaces,·8·

· · · ··2, The Interaction of Anions and Weak·9·

· · · ··Acids with the Hydrous Goethite (a-FeOOH)10·

· · · ··Surface, 198011·

· ·NMCC Exhibit 79.··Bureau of Mines Report of· · · ·28112·

· · · ··Investigations, Blast-Produced Fractures13·

· · · ··in Lithonia Granite, 197414·

· ·NMCC Exhibit 80.··EPA Industrial Environmental· ··28115·

· · · ··Research Laboratory, Office of Research16·

· · · ··and Development, Environmental Protection17·

· · · ··Technology Series, Field and Laboratory18·

· · · ··Methods Applicable to Overburdens and19·

· · · ··Minesoils, March 197820·

· ·NMCC Exhibit 81.··SRK Consulting, NI-43-101· · · ·28121·

· · · ··Preliminary Assessment, THEMAC Resources22·

· · · ··Group Limited, Copper Flat Project,23·

· · · ··Sierra County, New Mexico, 201024·

· ·25·

22

· · · · · · · · ··E X H I B I T S (Continued)·1·

· · · · · · · · · · · · · · · · · · · · · · · ··ADMITTED·2·

· ·NEW MEXICO COPPER CORPORATION (Continued):·3·

· ·NMCC Exhibit 82.··SRK Consulting, Geochemical· · ·281·4·

· · · ··Characterization Report for the Copper·5·

· · · ··Flat Project, New Mexico, May 2013·6·

· ·NMCC Exhibit 83.··SRK Consulting, Predictive· · ··281·7·

· · · ··Geochemical Modeling of Pit Lake Water·8·

· · · ··Quality at the Copper Flat Project, New·9·

· · · ··Mexico, December 201410·

· ·NMCC Exhibit 84.··SRK Consulting, Humidity· · · ··28111·

· · · ··Cell Termination Report for the Copper12·

· · · ··Flat Project, New Mexico, February 201413·

· ·NMCC Exhibit 85.··Pergamon, Applied· · · · · · · ·28114·

· · · ··Geochemistry 15, Geochemical modeling15·

· · · ··approach to predicting arsenic16·

· · · ··concentrations in a mine pit lake, 200017·

· ·NMCC Exhibit 86.··THEMAC Resources Group, Mine· ··28118·

· · · ··Operation and Reclamation Plan, Copper19·

· · · ··Flat Mine Project, Sierra County, New20·

· · · ··Mexico, July 18, 201221·

· ·22·

· ·23·

· ·24·

· ·25·

23

· · · · · · ·MS. ORTH:··Good morning.·1·

· · · · · · ·My name is Felicia Orth.··I'm a Hearing·2·

· ·Officer appointed by the New Mexico Environment·3·

· ·Department to conduct a hearing in the matter of·4·

· ·Discharge Permit 1840.·5·

· · · · · · ·This is a Discharge Permit applied for by the·6·

· ·New Mexico Copper Corporation for the proposed Copper·7·

· ·Flat Mine.··It was docketed by the hearing clerk as·8·

· ·GWB 18-06(P).·9·

· · · · · · ·UNIDENTIFIED SPEAKER:··You'll need to turn10·

· ·that thing up a little bit.11·

· · · · · · ·MS. ORTH:··Okay.12·

· · · · · · ·Does it help if I'm closer to it?13·

· · · · · · ·Okay.14·

· · · · · · ·THE INTERPRETER:··And the interpreter is15·

· ·ready, as well.16·

· · · · · · ·MS. ORTH:··The hearing is being recorded and17·

· ·transcribed by Cheryl Arreguin of Kathy Townsend Court18·

· ·Reporters.19·

· · · · · · ·There is also simultaneous interpretation20·

· ·between Spanish and English.21·

· · · · · · ·Ma'am.22·

· · · · · · ·(SANDRA O. CALDWELL, the interpreter, was duly23·

· · · · · · ·sworn.)24·

· · · · · · ·THE INTERPRETER:··Good morning.25·

24

· · · · · · ·Sandra Olivares Caldwell, certified court·1·

· ·interpreter for the State of New Mexico.·2·

· · · · · · ·I swear to interpret faithfully between·3·

· ·English and Spanish languages to the best of my ability·4·

· ·in accordance with the ethics and protocols of the·5·

· ·interpreter profession.·6·

· · · · · · ·Madam Hearing Officer, may I make the·7·

· ·announcement?·8·

· · · · · · ·MS. ORTH:··Yes.·9·

· · · · · · ·Use the --10·

· · · · · · ·THE INTERPRETER:··Thank you.11·

· · · · · · ·Good morning, ladies and gentlemen.12·

· · · · · · ·I'm here to provide language access to anyone13·

· ·who is more comfortable in another language besides14·

· ·English.··If you are more comfortable in another15·

· ·language, no matter what language that is, please let me16·

· ·know.··If you are here assisting someone or accompanying17·

· ·someone who is more comfortable in another language,18·

· ·please let me know.19·

· · · · · · ·I'll be making an announcement in Spanish.20·

· · · · · · ·(In Spanish.)21·

· · · · · · ·Everyone present is comfortable in English?22·

· · · · · · ·Thank you very much.23·

· · · · · · ·Madam Hearing Officer, no requests at this24·

· ·point for interpreter services, but I will be available25·

7

Kathy Townsend Court Reporters(505) 243-5018 Fax (505) 243-3606

25

· ·at any time during the hearing.·1·

· · · · · · ·MS. ORTH:··Thank you very much.·2·

· · · · · · ·All right.··So the hearing will be conducted·3·

· ·in accordance with the New Mexico Water Quality Act, the·4·

· ·New Mexico Ground and Surface Water Protection·5·

· ·Regulations, the Supplemental Permitting Requirements·6·

· ·for Copper Mine Facilities, commonly known as the Copper·7·

· ·Mine Rule.··And, of course, the procedures that apply·8·

· ·here come from those sources and also 20.1.4 of the New·9·

· ·Mexico Administrative Code.10·

· · · · · · ·All testimony will be taken under oath.··All11·

· ·testimony will be subject to cross-examination.12·

· · · · · · ·A few housekeeping matters.13·

· · · · · · ·The restrooms are through that door at the14·

· ·back of the auditorium.15·

· · · · · · ·There is something of a coffee setup over16·

· ·here, although I have to explain it.··All you'll find in17·

· ·the hot water pot is hot water.··If you want leaded18·

· ·coffee, you cut open one of these Cafe Bustelo.··If you19·

· ·want unleaded, you open the German decaffeinated coffee.20·

· ·And then there are tea bags, half and half and sugar21·

· ·cubes.22·

· · · · · · ·There are restaurants nearby, I know.··We will23·

· ·take a lunch break somewhere 11:30, noon, whenever24·

· ·there's a good stopping place in a witness' testimony.25·

26

· · · · · · ·Public comment will be invited throughout the·1·

· ·hearing.··We also have a special session set aside for·2·

· ·public comment where we'll hear no technical witnesses.·3·

· ·That will be starting tomorrow night, that's Tuesday·4·

· ·night, at 5:00 p.m.·5·

· · · · · · ·Otherwise, if you have public comment to·6·

· ·offer, please let me know.··We don't interrupt a·7·

· ·technical witness' testimony, but at the end of a·8·

· ·technical witness' testimony, especially if we're about·9·

· ·to take a break, I will invite your public comment.10·

· · · · · · ·So really just let me know or let John Baca --11·

· ·where is John?12·

· · · · · · ·MR. BACA:··Right here.13·

· · · · · · ·MS. ORTH:··There he is.··That's John Baca.··He14·

· ·is the hearing clerk.··You see him there in the striped15·

· ·shirt.16·

· · · · · · ·If you have a question, you want to let us17·

· ·know about public comment, you've noticed the coffee18·

· ·pot's empty, whatever it is, talk to John, and we will19·

· ·figure it out together.20·

· · · · · · ·Let's see.21·

· · · · · · ·We will not go past about 7:00 p.m. each day.22·

· ·Again, it kind of depends on where the witnesses are in23·

· ·their testimony.24·

· · · · · · ·No decisions will be made this week.··The25·

27

· ·essential process is we're making an evidentiary record.·1·

· ·The transcript will be produced.··The parties will have·2·

· ·a chance to submit posthearing proposed findings and·3·

· ·conclusions.··I do a Hearing Officer report.··All of·4·

· ·that goes to the cabinet secretary.··So it will be some·5·

· ·months before a decision is made around anything we're·6·

· ·doing here this week.·7·

· · · · · · ·Also, I saw some E-mail traffic in the·8·

· ·administrative record, and I wanted to be clear about·9·

· ·another aspect of the -- of the public comment, which is10·

· ·your comment can come in verbally on this record here,11·

· ·with the court reporter, this week, and if we continue12·

· ·into the second week, that week, as well.··However, when13·

· ·we adjourn, nothing further can come in, no public14·

· ·comment, no technical testimony, nothing.15·

· · · · · · ·Those are the procedures of the Environment16·

· ·Department, and this is the Environment Department17·

· ·hearing.18·

· · · · · · ·There is another hearing that will occur the19·

· ·week of October 22nd, also in T or C, but that's a20·

· ·hearing for another agency, the Mining and Minerals21·

· ·Division of the Energy, Minerals and Natural Resources22·

· ·Department.··They have different rules.23·

· · · · · · ·In that proceeding, they actually invite24·

· ·written public comment after adjournment.··So if you25·

28

· ·have something to say to EMNRD MMD, the Mining and·1·

· ·Minerals Division, after the evidentiary record, the·2·

· ·public comment record is closed, you can still do that.·3·

· ·Just not for this hearing.··So just get it in first.·4·

· · · · · · ·Let's see.·5·

· · · · · · ·Again, we will take a lunch break.··We won't·6·

· ·typically take a dinner break.··When we break in the·7·

· ·early evening, it will be for the night.·8·

· · · · · · ·Are there any questions about what I would·9·

· ·call administrative or housekeeping matters?10·

· · · · · · ·Mr. Butzier.11·

· · · · · · ·MR. BUTZIER:··Madam Hearing Officer, just one12·

· ·point of clarification.13·

· · · · · · ·Is it the case that if somebody comes after14·

· ·work, between the 5 and 7 o'clock time frame, who wants15·

· ·to give public comment, that that person will have an16·

· ·opportunity during that window regardless of where we17·

· ·are in the -- in the technical testimony?18·

· · · · · · ·MS. ORTH:··If you mean tomorrow night, the19·

· ·answer is yes.20·

· · · · · · ·MR. BUTZIER:··But not otherwise?21·

· · · · · · ·MS. ORTH:··If someone really wants to be heard22·

· ·and that's their chance, if you will, that's their23·

· ·window --24·

· · · · · · ·MR. BUTZIER:··Okay.25·

8

Kathy Townsend Court Reporters(505) 243-5018 Fax (505) 243-3606

29

· · · · · · ·MS. ORTH:··-- we can take them.··I definitely·1·

· ·want to make a space for anyone who wants to offer·2·

· ·comment.··I just want to do it with the least possible·3·

· ·disruption.·4·

· · · · · · ·MR. BUTZIER:··And I know in the past that·5·

· ·you've often invited public comment just before lunch.·6·

· · · · · · ·Is that your intention in this proceeding?·7·

· · · · · · ·MS. ORTH:··So that's something we can do.·8·

· ·Again, depending on where the technical witness is,·9·

· ·breaks are often an excellent time to get some public10·

· ·comment in, either before or after lunch, or before we11·

· ·break for the day.12·

· · · · · · ·MR. BUTZIER:··Thank you, Madam Hearing13·

· ·Officer.14·

· · · · · · ·MS. ORTH:··Yes.··Again, just let us know that15·

· ·you're ready to offer comment.16·

· · · · · · ·Any other questions about administrative17·

· ·matters?18·

· · · · · · ·Ma'am.19·

· · · · · · ·Tell me your name.20·

· · · · · · ·MS. BRITTAN:··My name is Rhonda Brittan.21·

· · · · · · ·I was wondering if -- will public comment be22·

· ·restricted to a time limit?23·

· · · · · · ·MS. ORTH:··I don't like to place time limits24·

· ·on folks.··Most folks don't -- don't need them.··I will25·

30

· ·ask you not to repeat yourself.··I mean, there are other·1·

· ·rules about public comment, no personal attacks, don't·2·

· ·repeat yourself and don't stray into technical·3·

· ·testimony, testimony that would require a scientific·4·

· ·background.··But other than that, we'd like to hear what·5·

· ·you have to say.·6·

· · · · · · ·Are there other questions?·7·

· · · · · · ·No.··All right.·8·

· · · · · · ·So I have the pleadings in front of me.·9·

· ·You -- anyone is welcome to look at them when we're on a10·

· ·break.··We also have the administrative record here11·

· ·somewhere.··It's usually maintained by the bureau.12·

· · · · · · ·Andrew, do you have that?13·

· · · · · · ·MR. KNIGHT:··Madam Hearing Officer -- I'm not14·

· ·sure it's on.15·

· · · · · · ·MS. ORTH:··It's on.16·

· · · · · · ·MR. KNIGHT:··It's on.17·

· · · · · · ·The administrative record, we have -- we have18·

· ·large portions as -- as the applicant, I imagine, does,19·

· ·as well.··But the administrative record was maintained20·

· ·electronically in this proceeding, and it is 18,000-some21·

· ·pages long.··So the entire record -- as far as I know,22·

· ·the entire record is not in paper at this point, and I23·

· ·think it would be impractical to print out the entire24·

· ·thing.25·

31

· · · · · · ·But certainly the application and most·1·

· ·relevant parts of it I think we can -- we can have for·2·

· ·inspection if someone would like to.·3·

· · · · · · ·MS. ORTH:··So that reminds me.··If you would·4·

· ·reach for your devices, please, and either turn them off·5·

· ·or set them on stun.··Those of us who are trying to make·6·

· ·the record appreciate it.··Thank you for that.··And if·7·

· ·you need to take a call, just step out of the -- step·8·

· ·out of the room.·9·

· · · · · · ·Sign-ins.··So we have some sign-in sheets.10·

· ·Please sign in, give us as much information as you -- as11·

· ·you'd like, even if it's just your name.··The sign-in12·

· ·sheets are used as evidence of public participation and13·

· ·for the correct spelling of your name in the transcript14·

· ·if you ask a question or speak up.15·

· · · · · · ·No salesmen will call.··So please just sign in16·

· ·and indicate on the sheet whether you would like to give17·

· ·public comment.··And we might approach you -- if we see18·

· ·that you are desirous of giving public comment, we might19·

· ·approach you and ask you if you have any time20·

· ·constraints.21·

· · · · · · ·Any other questions at all?22·

· · · · · · ·No?··All right.23·

· · · · · · ·Oh, ma'am.24·

· · · · · · ·UNIDENTIFIED SPEAKER:··Where's the sign-in25·

32

· ·sheet?·1·

· · · · · · ·MR. BACA:··Oh, right here.·2·

· · · · · · ·MS. ORTH:··John Baca is running around with·3·

· ·the sign-in sheets.··We had a number of people come into·4·

· ·the room before -- before the sheets were at the sign-in·5·

· ·table.·6·

· · · · · · ·Okay.··In that case, Mr. Knight, if you would·7·

· ·begin the appearances.·8·

· · · · · · ·MR. KNIGHT:··Good morning, Madam Hearing·9·

· ·Officer.10·

· · · · · · ·My name is Andrew Knight.··I am representing11·

· ·the Mining and Environmental Compliance Section of the12·

· ·Ground Water Bureau of the New Mexico Environment13·

· ·Department.14·

· · · · · · ·And with me today I have three witnesses,15·

· ·Mr. Kurt Vollbrecht, Mr. Bradley Reid and Dr. Joseph16·

· ·Marcoline.17·

· · · · · · ·MS. ORTH:··And --18·

· · · · · · ·MR. KNIGHT:··And our division director,19·

· ·Mr. Bruce Yurdin, is with me at the table.20·

· · · · · · ·MS. ORTH:··All right.··Thank you.21·

· · · · · · ·Mr. de Saillan.22·

· · · · · · ·MR. DE SAILLAN:··Thank you, Madam Hearing23·

· ·Officer.24·

· · · · · · ·My name is Charles de Saillan, and I'm25·

9

Kathy Townsend Court Reporters(505) 243-5018 Fax (505) 243-3606

33

· ·representing Turner Ranch Properties and the Hillsboro·1·

· ·Pitchfork Ranch.·2·

· · · · · · ·With me today is Steve Dobrott, who is the·3·

· ·former manager of the Ladder Ranch.·4·

· · · · · · ·To his left is Jim Kuipers, who is one of our·5·

· ·experts.·6·

· · · · · · ·Directly behind me is Kendra Palmer, who is a·7·

· ·paralegal with the New Mexico Environmental Law Center.·8·

· · · · · · ·And to her left is Tom Myers, who is our·9·

· ·hydrologist expert.10·

· · · · · · ·I think Bob Cunningham, who is the owner of11·

· ·the Hillsboro Pitchfork Ranch, should be close by.12·

· · · · · · ·MR. CUNNINGHAM:··Right back here, Charlie.13·

· · · · · · ·MR. DE SAILLAN:··Right there.14·

· · · · · · ·MS. ORTH:··All right.··Thank you.15·

· · · · · · ·MR. DE SAILLAN:··Thank you.16·

· · · · · · ·MS. BARNCASTLE:··Good morning, Madam Hearing17·

· ·Examiner.18·

· · · · · · ·Samantha Barncastle for the Elephant Butte19·

· ·Irrigation District.20·

· · · · · · ·With me today is the manager of the district,21·

· ·Mr. Gary Esslinger, one of my experts, Dr. Carroll, and22·

· ·three more of my experts, in order, Mr. Fuchs, Dr. King23·

· ·and Mr. Libbin.24·

· · · · · · ·MS. ORTH:··Thank you.25·

34

· · · · · · ·Mr. Butzier.·1·

· · · · · · ·MR. BUTZIER:··Madam Hearing Officer, Stuart·2·

· ·Butzier of the Modrall Sperling law firm in the Santa Fe·3·

· ·office.·4·

· · · · · · ·With me today at the table here are New Mexico·5·

· ·Copper representatives, including Mr. Jeff Smith and·6·

· ·Ms. Katie Emmer.·7·

· · · · · · ·Mr. Andrew Maloney is in the back over there·8·

· ·with Tulla, who you'll hear about from Mr. Smith when he·9·

· ·testifies.10·

· · · · · · ·And then I've got a number of experts here11·

· ·that I think I will wait to introduce as we go forward12·

· ·unless you want me to introduce them now.13·

· · · · · · ·MS. ORTH:··No.··That's all right.14·

· · · · · · ·MR. BUTZIER:··Okay.15·

· · · · · · ·MS. ORTH:··Thank you.16·

· · · · · · ·MR. BUTZIER:··Thank you.17·

· · · · · · ·MS. ORTH:··And while I have Mr. Butzier there,18·

· ·are you interested in making an opening statement, or19·

· ·are there preliminary matters we need to address before20·

· ·your opening statement?21·

· · · · · · ·MR. BUTZIER:··I have not prepared an opening22·

· ·statement other than I can just say that we intend to23·

· ·offer five witnesses in support of New Mexico Copper's24·

· ·position in this proceeding.25·

35

· · · · · · ·And we'll start with the chief operating·1·

· ·officer, Mr. Jeff Smith, and I'd like to go ahead and·2·

· ·call him, and he will sort of introduce some of the·3·

· ·matters for the -- for the hearing today.·4·

· · · · · · ·MS. ORTH:··All right.··Thank you.·5·

· · · · · · ·Let me just ask if there's anyone else who·6·

· ·would like to make an opening statement or reserve.··It·7·

· ·is your choice.·8·

· · · · · · ·Hearing nothing -- oh.·9·

· · · · · · ·MR. DE SAILLAN:··We will reserve our opening10·

· ·statement until the commencement of our presentation.11·

· · · · · · ·MS. ORTH:··Okay.12·

· · · · · · ·MR. DE SAILLAN:··Thank you.13·

· · · · · · ·MS. BARNCASTLE:··I will likewise reserve mine.14·

· · · · · · ·MS. ORTH:··Okay.15·

· · · · · · ·MR. KNIGHT:··Madam Hearing Officer, I have an16·

· ·opening statement I can make at this time.17·

· · · · · · ·MS. ORTH:··Right now.··All right.··Thank you,18·

· ·Mr. Knight.19·

· · · · · · ·MR. KNIGHT:··Good morning, parties, members of20·

· ·the public, Madam Hearing Officer.21·

· · · · · · ·We are here this week for a fairly narrow22·

· ·purpose, to determine whether this mine if constructed23·

· ·and operated in accordance with this permit will cause24·

· ·exceedances of groundwater quality standards at places25·

36

· ·of withdrawal.·1·

· · · · · · ·There are many other peripheral issues, and·2·

· ·some of those are important, and they will be discussed,·3·

· ·but at its core the decision to issue this permit·4·

· ·revolves around that single question.·5·

· · · · · · ·You'll hear from the department's three·6·

· ·witnesses this week that we have spent literally years·7·

· ·scrutinizing the Mine Plan, the history of this site,·8·

· ·the geology and groundwater flow characteristics of the·9·

· ·area, and combined that with consultation with multiple10·

· ·other federal and state agencies and lessons learned11·

· ·from decades of our own permitting experience.12·

· · · · · · ·And through an iterative process, the bureau13·

· ·has created a permit that will allow mining to occur14·

· ·while protecting the quality of groundwater according to15·

· ·both the Copper Rule and the New Mexico Water Quality16·

· ·Act.··This permit does not allocate water -- any water17·

· ·for use at the mine, and it's not by itself a permit to18·

· ·operate the mine.··It is a permit to discharge water in19·

· ·such a way that surrounding groundwater is protected.20·

· · · · · · ·The Copper Rule was designed to be a permit by21·

· ·rule, a set of comprehensive, prescriptive requirements22·

· ·that an applicant must show they can meet, and if the23·

· ·department finds those requirements are met, the permit24·

· ·is issued.··We do not have the discretion to consider25·

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37

· ·other factors outside the scope of groundwater quality.·1·

· ·This permit does not depend on any certain amount of·2·

· ·water being available.··It only sets maximum discharge·3·

· ·limits.·4·

· · · · · · ·In the first public draft of the proposed·5·

· ·permit which was released back in February, the bureau·6·

· ·imposed a number of additional conditions on the mine·7·

· ·operators on top of those required by the Copper Rule.·8·

· ·We find that those -- those conditions are both·9·

· ·necessary and required in order for this permit to10·

· ·comply with the Water Quality Act.11·

· · · · · · ·The Water Quality Act also sets the criteria12·

· ·for denying a Discharge Permit.··In Section 74-6-5 of13·

· ·the New Mexico Statutes, it states that, quote, a permit14·

· ·shall be denied if the discharge would cause or15·

· ·contribute to water contaminant levels in excess of any16·

· ·state or federal standard.··Determination of the17·

· ·discharge's effect on groundwater shall be measured at18·

· ·any place of withdrawal of water for present or19·

· ·reasonably foreseeable future use.20·

· · · · · · ·A few words about the administrative record.21·

· ·The administrative record contains those materials22·

· ·relied on by the bureau in issuing the permit.··It23·

· ·contains the application, records of our consultation24·

· ·with other agencies, all communications with interested25·

38

· ·parties relevant to the permit and thousands of pages of·1·

· ·test results and scientific studies.·2·

· · · · · · ·The administrative record does not contain·3·

· ·materials that are not relevant to the issuance of this·4·

· ·permit or materials that, while arguably relevant, were·5·

· ·not relied upon by the bureau in issuing this permit.·6·

· · · · · · ·There are many issues connected with the·7·

· ·operation of this mine, but we are here this week to·8·

· ·discuss only one important subset of those issues,·9·

· ·potential impacts to groundwater quality and the10·

· ·measures to be taken to prevent those impacts that would11·

· ·lead to exceedances of standards at places of12·

· ·withdrawal.13·

· · · · · · ·We received a number of thoughtful, reasoned14·

· ·comments on the draft permit from the parties here today15·

· ·and from members of the public.··We have made changes to16·

· ·the permit in response to those comments, and those17·

· ·changes impose additional burdens on the applicant.··As18·

· ·the additional conditions imposed in the first draft of19·

· ·the permit, we believe those additional conditions are20·

· ·reasonable and necessary, and we have provided an21·

· ·explanation of them as required by the Copper Rule.22·

· · · · · · ·In closing, there are many -- many other valid23·

· ·topics for discussion related to this mine, and while24·

· ·they are all important, they are not all the subject of25·

39

· ·this particular hearing.··This permit is but one·1·

· ·component of a very long process, certainly an important·2·

· ·one, but only one piece of the puzzle.·3·

· · · · · · ·Thank you.·4·

· · · · · · ·MS. ORTH:··Thank you, Mr. Knight.·5·

· · · · · · ·Mr. Butzier.·6·

· · · · · · ·MR. BUTZIER:··Thank you, Madam Hearing·7·

· ·Officer.·8·

· · · · · · ·We'd like to call Mr. Jeff Smith as our first·9·

· ·witness.10·

· · · · · · · · · · · · ·JEFFREY SMITH11·

· · · ··having been first duly sworn or affirmed, was12·

· · · ··examined and testified as follows:13·

· · · · · · · · · · ··DIRECT EXAMINATION14·

· ·BY MR. BUTZIER:15·

· · · ··Q.· ·Good morning, Mr. Smith.16·

· · · · · · ·Would you please identify yourself for the17·

· ·record.18·

· · · ··A.· ·My name is Jeff Smith.··I'm the chief19·

· ·operating officer for New Mexico Copper.20·

· · · ··Q.· ·And, Mr. Smith, what will you be presenting in21·

· ·the hearing today?22·

· · · · · · ·MR. SMITH:··Katie, can you go to the first23·

· ·slide.24·

· · · · · · ·This slide is an outline of my presentation25·

40

· ·that I'll give today.·1·

· · · · · · ·I'll start off with a summary of my·2·

· ·qualifications and followed by a summary and overview of·3·

· ·New Mexico Copper Corporation.·4·

· · · · · · ·After that, I will talk a bit about the Copper·5·

· ·Flat project and give a brief summary of community·6·

· ·benefits that will result from the project.·7·

· · · · · · ·Then I will go into a summary of our·8·

· ·application for a Discharge Permit and the methods that·9·

· ·we are using to protect groundwater.10·

· · · · · · ·I will discuss the major mine units that are11·

· ·covered by the permit and a summary of our Reclamation12·

· ·and Closure Plan.13·

· · · · · · ·After that, I will talk about our financial14·

· ·assurance that we have -- our proposal that we have15·

· ·submitted, and then I will conclude with an introduction16·

· ·of our other experts.17·

· · · ··Q.· ·(BY MR. BUTZIER)··And, Mr. Smith, would you18·

· ·please describe your expertise and qualifications to be19·

· ·talking about these topics.20·

· · · ··A.· ·As I stated in my introduction, I am the chief21·

· ·operating officer of New Mexico Copper Corporation.22·

· · · · · · ·I have a degree in mining engineering that I23·

· ·earned from the University of Arizona and a master's24·

· ·degree in business management from Stanford University25·

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· ·Graduate School of Business.·1·

· · · · · · ·I have 35 years of experience in mine·2·

· ·management and mine engineering.··My experience includes·3·

· ·work in the United States, Mexico and South America.·4·

· · · · · · ·Excuse me.·5·

· · · · · · ·My experience includes time at the Quintana·6·

· ·Minerals Copper Flat Mine from 1980 to 1983.·7·

· · · · · · ·During my career, I served as -- on the·8·

· ·Economic Development Authority for Pershing County,·9·

· ·Nevada, and I have knowledge and understanding of the10·

· ·New Mexico Copper Rule requirements to prevent water11·

· ·pollution.12·

· · · · · · ·Thank you.13·

· · · · · · ·MR. BUTZIER:··Madam Hearing Officer, at this14·

· ·time, New Mexico Copper would like to offer Mr. Smith as15·

· ·a mine management and mine engineering expert who also16·

· ·has expertise in connection with compliance with the New17·

· ·Mexico Copper Rule.18·

· · · · · · ·MS. ORTH:··Objections?19·

· · · · · · ·All right.··He's so recognized.20·

· · · ··Q.· ·(BY MR. BUTZIER)··At this time, Mr. Smith,21·

· ·would you please proceed with the prepared presentation22·

· ·that you've made.23·

· · · ··A.· ·New Mexico Copper Corporation is the owner of24·

· ·the project assets.··The company is the permittee, the25·

42

· ·developer and will be the operator of the Copper Flat·1·

· ·Mine.·2·

· · · · · · ·New Mexico Copper Corporation is organized as·3·

· ·a New Mexico domestic profit corporation.··The company·4·

· ·was organized in 2010.·5·

· · · · · · ·New Mexico Copper is a wholly-owned subsidiary·6·

· ·of THEMAC Resources Group, which is listed on the·7·

· ·Toronto Stock Exchange.··The majority shareholder in·8·

· ·THEMAC is Tulla Group, which is an Australian family·9·

· ·investment group.10·

· · · · · · ·Tulla's other mining investments include11·

· ·Norseman Gold, which is Australia's longest continuously12·

· ·running gold mining operation that has produced over13·

· ·5.5 million ounces of gold over 65 years in Western14·

· ·Australia.15·

· · · · · · ·Tulla is fully funding the Copper Flat16·

· ·project, and Tulla has invested more than $55 million to17·

· ·date in the project for engineering, property18·

· ·acquisition, permitting and all the consultants that are19·

· ·needed to accomplish that.20·

· · · · · · ·Our plans are designed to meet or exceed21·

· ·health, safety and environmental regulatory22·

· ·requirements.23·

· · · · · · ·We are committed to developing a long-term24·

· ·relationship with our neighbors in Sierra County, and25·

43

· ·we're dedicated to providing the local community with·1·

· ·significant opportunities for employment and economic·2·

· ·development.·3·

· · · · · · ·We recognize the concerns and issues of·4·

· ·neighboring property owners and the community at large,·5·

· ·and we have included measures to address these concerns·6·

· ·in our plans.·7·

· · · · · · ·Copper Flat Mine property is accessed by State·8·

· ·Highway 152, about 20 miles southwest of Truth or·9·

· ·Consequences and four miles northeast of Hillsboro.10·

· · · · · · ·Mining at the property dates back to the late11·

· ·1800s.··There has been placer gold and copper mining at12·

· ·the property, and the history includes copper mining by13·

· ·Quintana Minerals from 1980 to 1983.14·

· · · · · · ·The land -- the property is -- the permit15·

· ·boundary at the property encompasses approximately 2,20016·

· ·acres.··This is a mix of private and public land,17·

· ·approximately 40 to 50 percent private ground.··The18·

· ·public land is administered by the BLM, and our19·

· ·unpatented mining claims cover the entirety of the20·

· ·public land.21·

· · · · · · ·Reserves at Copper Flat include 675 million22·

· ·pounds of copper, 20 million pounds of molybdenum,23·

· ·250,000 ounces of gold and 5 to 6 million ounces of24·

· ·silver.25·

44

· · · · · · ·The production method at Copper Flat will be·1·

· ·an open pit mine with a conventional flotation mill.·2·

· ·The operation is very typical of the industry and very·3·

· ·straightforward.·4·

· · · · · · ·The duration of the project will begin with·5·

· ·two years of construction, followed by 12 years of·6·

· ·production, which then in turn will be followed by 10 to·7·

· ·20 years of reclamation and closure.·8·

· · · · · · ·A feasibility study has been prepared on the·9·

· ·project by M3 Engineering with assistance from a wide10·

· ·range of technical experts.··That feasibility study11·

· ·resulted in a positive result and the decision to move12·

· ·forward with development of the mine.13·

· · · · · · ·Permitting is moving forward.··Our federal EIS14·

· ·and state permits are progressing.··We are using a15·

· ·common Mine Plan for all agencies, and that includes the16·

· ·Reclamation and Operation Plan.17·

· · · · · · ·This slide shows the location of the mine.18·

· ·This is the location within -- within a copper belt that19·

· ·extends from Arizona to New Mexico and down into Mexico.20·

· ·The Copper Flat Mine is located at the star just21·

· ·southwest of Truth or Consequences.··And Hillsboro is --22·

· ·will be in this location here.··Highway 152 runs from23·

· ·I-25 to Silver City.24·

· · · · · · ·The region is served by rail.··There's a rail25·

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45

· ·line that extends over to Arizona and then down into·1·

· ·Mexico.·2·

· · · · · · ·As you can see from this, there is a·3·

· ·significant number of copper mining and mineral deposits·4·

· ·in this belt.·5·

· · · · · · ·This slide shows our production profile that·6·

· ·is outlined in our operating plans.··It covers a 12-year·7·

· ·operating period and shows average head grade and copper·8·

· ·production into concentrate in the blue bars.··We will·9·

· ·be producing a concentrate at the operation and then10·

· ·shipping that away for smelting.11·

· · · · · · ·The first five years are planned to be higher12·

· ·grade.··This will achieve a payback of the financing13·

· ·soon in the operation and then allow production to14·

· ·continue without the -- the financing overhead.··First15·

· ·five years will produce approximately 35,000 tons of16·

· ·copper per year and then followed by approximately17·

· ·25,000 tons of copper.18·

· · · · · · ·The ore at Copper Flat lends itself to a very19·

· ·typical and common crushing and grinding practice that20·

· ·is used throughout the industry today.··We will be21·

· ·flotating -- employing flotation to produce a copper22·

· ·concentrate that contains the gold and silver, as well,23·

· ·and produce a separate molybdenum concentrate.24·

· · · · · · ·We are employing standard flotation reagents.25·

46

· ·There's no leaching on site or any other process.··And·1·

· ·after the concentrate is produced, it's shipped away for·2·

· ·smelting.·3·

· · · · · · ·The concentrate will have low impurities and·4·

· ·is expected to yield a clean 28 percent copper grade.·5·

· ·There's been metallurgical test work completed on the·6·

· ·ore body that has -- has guided us in development of our·7·

· ·concentrate quality.··We produce it in a lab.·8·

· · · · · · ·In addition, we have the records from the·9·

· ·Quintana operation that also describes the10·

· ·characteristics of the concentrate.11·

· · · · · · ·There will be several community benefits that12·

· ·develop from this -- developing the Copper Flat Mine.13·

· ·These benefits are described and were -- were developed14·

· ·by the Arrowhead Center in a report that was produced in15·

· ·2012.16·

· · · · · · ·In this report, the Arrowhead Center projects17·

· ·that there will be 1,156 jobs created during18·

· ·construction.··This includes direct, indirect and19·

· ·induced jobs.··And this number is through the State of20·

· ·New Mexico.21·

· · · · · · ·Construction of the project will add22·

· ·$55.6 million to the statewide labor income and will add23·

· ·nearly $80 million to the value of materials and goods24·

· ·that are produced within the state.25·

47

· · · · · · ·Construction expenditures will include·1·

· ·$45 million spent here in Sierra County and another·2·

· ·$49 million spent in the rest of the state.·3·

· · · · · · ·During the operation, there will be 270·4·

· ·full-time direct jobs at the mine.··Individual wages·5·

· ·will be very good, ranging from 35,000 to 60,000 annual,·6·

· ·plus benefits.··In addition to that, there will be a·7·

· ·large number of indirect and induced jobs here in Sierra·8·

· ·County, for a total of 360 to 400 jobs total.·9·

· · · · · · ·Federal and state taxes paid will -- are10·

· ·estimated to be 175 million, in ad valorem, severance,11·

· ·income and gross receipts taxes.12·

· · · · · · ·After mining, there will be 10 to 20 years of13·

· ·reclamation and closure, and there will be ongoing jobs,14·

· ·wages and tax benefits occurring during that period.15·

· · · · · · ·Our application for Discharge Permit started16·

· ·in 2010.··There was a Sampling and Analysis Plan and17·

· ·Baseline Data Report that was produced by INTERA and18·

· ·issued in 2012.19·

· · · · · · ·Our initial application for a Discharge Permit20·

· ·was submitted in 2011, which is prior to New Mexico21·

· ·adopting the Copper Rule.··As the application was being22·

· ·developed, there were discussions happening in Santa Fe23·

· ·on the Copper Rule, and we were developing our plans to24·

· ·meet the requirements that we felt would be coming25·

48

· ·through the Copper Rule.·1·

· · · · · · ·In 2017, we completed a revision to the·2·

· ·application and reorganized the application to·3·

· ·demonstrate compliance with the Copper Rule.·4·

· · · · · · ·Our application is supported by numerous·5·

· ·technical reports and supported by a Mining and·6·

· ·Reclamation Plan that has been submitted to all of the·7·

· ·agencies that are involved in permitting this mine.·8·

· · · · · · ·The application includes extensive water·9·

· ·management methodologies and controls for protecting --10·

· ·for protecting groundwater.11·

· · · · · · ·The application was deemed by NMED to be12·

· ·administratively complete in 2012 and then followed by13·

· ·deemed to be technically approvable on February 1, 2018,14·

· ·and draft DP-1840 was issued by the agency on15·

· ·February 2, 2018.16·

· · · · · · ·On this slide, I've listed example methods17·

· ·that we've employed in our plans to prevent water18·

· ·pollution as required by the Copper Rule.19·

· · · · · · ·The plan includes water management planning,20·

· ·engineering and design of facilities and structures with21·

· ·sufficient capacity to contain anticipated storm events.22·

· · · · · · ·The site grading and -- we have included site23·

· ·grading and construction of diversion structures to24·

· ·direct unaffected stormwater away from the mine25·

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· ·facilities and limit stormwater running onto the mine·1·

· ·facilities.·2·

· · · · · · ·Stormwater that falls directly onto the mine·3·

· ·facilities will be captured for use at the mine.·4·

· · · · · · ·The ore processing is by flotation only.·5·

· ·We're not employing ore leaching or solvent extraction·6·

· ·processes.·7·

· · · · · · ·We have developed and will implement and·8·

· ·follow a waste rock characterization and management·9·

· ·program.··As testimony continues today, there will be10·

· ·discussion of materials that have been identified as --11·

· ·as potential acid-generating.··That material is very12·

· ·small in nature.··We have identified -- we have a plan13·

· ·to identify that in the field as we mine it and will14·

· ·segregate it and store it properly in our facilities.15·

· · · · · · ·We will be constructing fully lined and16·

· ·contained process facilities, including the flotation17·

· ·plan, the tailing storage facility, the process water18·

· ·piping systems and process and affected water19·

· ·impoundments.20·

· · · · · · ·We will have a solution management process at21·

· ·the tailing storage facility throughout the operation22·

· ·and through the reclamation and closure phases,23·

· ·including facility draindown after processing ends,24·

· ·followed by placement of an engineered cover and25·

50

· ·revegetation of the tailings facility.·1·

· · · · · · ·Our plans include reclamation of legacy·2·

· ·disturbances that will be completed during construction·3·

· ·and operation.··Early in our development phase as we're·4·

· ·constructing the facility, we will address unreclaimed·5·

· ·mine waste stockpiles that exist from previous·6·

· ·operations at the property.··We will reshape them, grade·7·

· ·them, cover and revegetate.·8·

· · · · · · ·We will complete reclamation and closure of·9·

· ·the site according to our Reclamation Plan that has been10·

· ·submitted following the operation, and this also11·

· ·includes reshaping and revegetation of the disturbances12·

· ·that we create during the operation.13·

· · · · · · ·I'd like to introduce now the major mine units14·

· ·that we'll be talking about today.··And to accompany15·

· ·this, we have a figure that we'll go to that outlined16·

· ·these major mine units.17·

· · · · · · ·First on the list is the open pit.··The future18·

· ·open pit is located in this area.19·

· · · · · · ·Just for reference, this outline on this20·

· ·figure, this is the permit boundary that encompasses21·

· ·approximately 2,200 acres.··At the west end of the22·

· ·permit area is the open pit.··This is located primarily23·

· ·on private ground that is owned by New Mexico Copper.24·

· · · · · · ·The process facility is to the east of the25·

51

· ·open pit, in this area here.··This facility -- this·1·

· ·facility includes contained and lined facilities, will·2·

· ·be utilizing existing foundations in locations in this·3·

· ·area here, this disturbed area here.·4·

· · · · · · ·The tailings storage facility is located in·5·

· ·the southwest region of the permit area -- or --·6·

· ·sorry -- southeast area of the permit area.··This will·7·

· ·be a synthetically lined storage facility, located·8·

· ·adjacent to the process area.··The liner for this·9·

· ·facility is a high density polyethylene, or HDPE,10·

· ·synthetic liner, 80-mil thick, high quality, standard11·

· ·liner that is used for environmental containment around12·

· ·the world today.13·

· · · · · · ·The TSF includes solution underdrain and14·

· ·collection and process water recycling systems.··The15·

· ·water recovered from this facility will be reused for16·

· ·mineral recovery as part of a Water Conservation Plan.17·

· ·The TSF dam that's at the front of this impoundment will18·

· ·be designed, constructed and will comply with OSE Dam19·

· ·Safety requirements.20·

· · · · · · ·There are HDPE-lined impoundments and ponds21·

· ·located adjacent to the tailing storage facility, our22·

· ·waste rock stockpiles, the process area.··These ponds23·

· ·and impoundments are designed to include capacity for24·

· ·stormwater events.25·

52

· · · · · · ·The mine's waste rock stockpiles are located·1·

· ·adjacent to the open pit and the open pit surface·2·

· ·drainage area and northeast of the process area.··These·3·

· ·waste rock stockpiles are located on low permeability·4·

· ·andesite bedrock.·5·

· · · · · · ·Included in the facility are roads and·6·

· ·administrative areas.··The surfaces of these areas will·7·

· ·be graded and maintained for stormwater management.·8·

· ·This area -- or these areas include a wastewater package·9·

· ·treatment facility that will discharge greywater to the10·

· ·tailings facility.11·

· · · · · · ·I'll describe now elements of our Reclamation12·

· ·and Closure Plan.13·

· · · · · · ·The engineering for the Reclamation and14·

· ·Closure Plan is complete, and plans have been submitted15·

· ·to the -- along with the Mining Operation and16·

· ·Reclamation Plan, which also serves as the Closure Plan17·

· ·for the Discharge Permit.18·

· · · · · · ·The New Mexico Copper's Discharge Permit19·

· ·application including the Closure Plan was deemed20·

· ·technically complete by NMED on February 1, 2018.21·

· · · · · · ·The plan includes salvage of growth media22·

· ·ahead of construction and storage of the growth media23·

· ·for reuse at reclamation.24·

· · · · · · ·The plan includes three large growth media25·

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· ·stockpiles that will be located at strategic areas·1·

· ·around the property, the mine property.··These·2·

· ·stockpiles will be graded and revegetated and access·3·

· ·controlled to prevent erosion in the future and maintain·4·

· ·those stockpiles for the future.·5·

· · · · · · ·After mining is complete, the material will be·6·

· ·removed from those stockpiles and used for covering the·7·

· ·facilities and revegetation phase.·8·

· · · · · · ·Shortly after mining ends, the open pit will·9·

· ·be filled with freshwater to the equilibrium level of10·

· ·the hydraulic sink and partially revegetated to limit11·

· ·oxidation of the pit walls.··The mine rock stockpiles at12·

· ·the tailings facility will be covered with growth media13·

· ·and revegetated.14·

· · · · · · ·Water from the tailings facility will be15·

· ·removed through evaporation, and following that the16·

· ·surface will be regraded, covered and revegetated.17·

· · · · · · ·Buildings, pipelines and other surface18·

· ·structures will be removed.··The concrete foundations19·

· ·will be broken and removed or buried as appropriate.20·

· · · · · · ·All pond and trench liners will be removed,21·

· ·and the excavations will be backfilled and revegetated,22·

· ·except as needed for ongoing water management.23·

· · · · · · ·New Mexico Copper will post financial24·

· ·assurance for the reclamation and closure of Copper25·

54

· ·Flat, and the financial assurance will be held jointly·1·

· ·by NMED, MMD and the BLM.·2·

· · · · · · ·Our financial assurance proposal is based on·3·

· ·the estimated cost of reclamation -- the cost of·4·

· ·reclamation and closure as performed by third-party·5·

· ·contractors under agency management as required by·6·

· ·19.10.12 NMAC, which is administered by MMD.·7·

· · · · · · ·Our financial assurance proposal also includes·8·

· ·a Closure Water Management Plan as required by·9·

· ·20.6.7.33H NMAC, which is administered by NMED.10·

· · · · · · ·The estimated cost of reclamation and closure11·

· ·has been prepared by SRK Consulting using the Copper12·

· ·Flat Reclamation and Closure Plan that was prepared by13·

· ·Golder Associates as part of our permit applications.14·

· ·The costing for the proposal was prepared using15·

· ·estimating standards and practices that have been16·

· ·accepted by a wide range of regulatory agencies and17·

· ·jurisdictions.18·

· · · · · · ·The estimate relies on average productivities19·

· ·from the Caterpillar Handbook and other similar20·

· ·references and costing references, not best case.··In21·

· ·addition, the estimate -- the proposal includes and22·

· ·incorporates cost factors from agency guidelines, from23·

· ·the MMD agency guidelines.24·

· · · · · · ·The financial assurance estimate prepared by25·

55

· ·SRK and submitted for review totals $55.8 million.··This·1·

· ·total includes contractor performance of the work,·2·

· ·mobilization and demobilization, agency management and·3·

· ·contract administration, closure water management and·4·

· ·monitoring.·5·

· · · · · · ·The cost calculations require approval by·6·

· ·three agencies.··The Copper Flat estimate was submitted·7·

· ·for agency review on August 9th, 2018.·8·

· · · · · · ·Documentation of our cost estimate is provided·9·

· ·as an exhibit to our notice of intent.10·

· · · · · · ·We have several experts here to provide11·

· ·testimony on our plans and designs, and I would like at12·

· ·this time to introduce them.··The team here today was13·

· ·drawn from a larger group of experts which we have14·

· ·employed over a number of years since 2010 to develop15·

· ·the plans and designs for this project.16·

· · · · · · ·With us today is Steven Finch from John17·

· ·Shomaker & Associates.··Mr. Finch will be presenting18·

· ·testimony on groundwater hydrology at the Copper Flat19·

· ·area.20·

· · · · · · ·Dr. Ruth Griffiths of SRK Consulting has21·

· ·joined us from Cardiff, UK.··Dr. Griffiths will be22·

· ·discussing geochemistry at the Copper Flat Mine.23·

· · · · · · ·Following Dr. Griffith, we will have a24·

· ·discussion of the tailing storage facility design from25·

56

· ·Dave Kidd, our design engineer from Golder Associates.·1·

· · · · · · ·Todd Stein, also at Golder Associates, was·2·

· ·focused on developing our reclamation plans, and·3·

· ·Mr. Stein will give an update on our reclamation plans·4·

· ·and designs.·5·

· · · · · · ·We have many other experts that have been·6·

· ·employed on this project, and they are reflected in the·7·

· ·record.·8·

· · · · · · ·That concludes my presentation.·9·

· · · ··Q.· ·I do have a couple of questions, Mr. Smith.10·

· · · · · · ·In your opinion, do the various plans and11·

· ·proposals included with New Mexico Copper Corporation's12·

· ·application materials that are in the administrative13·

· ·record fully meet or exceed the requirements of the14·

· ·Water Quality Act, the Copper Rule and associated15·

· ·groundwater program regulations administered by the New16·

· ·Mexico Environment Department?17·

· · · ··A.· ·Yes, they do.18·

· · · ··Q.· ·In your opinion, will the construction,19·

· ·operation, maintenance, reclamation and closure20·

· ·activities that occur at the Copper Flat Mine in21·

· ·accordance with the plans and procedures that are22·

· ·outlined in the materials -- will those operations,23·

· ·construction reclamation and closure meet or exceed the24·

· ·requirements of the Water Quality Act, the Copper Rule25·

15

Kathy Townsend Court Reporters(505) 243-5018 Fax (505) 243-3606

57

· ·and the associated groundwater program regulations·1·

· ·administered by the New Mexico Environment Department?·2·

· · · ··A.· ·Yes, they will.·3·

· · · ··Q.· ·And is it the case that Mr. Juan Velasquez·4·

· ·will be joining you and be available to -- for·5·

· ·questioning as part of the cross-examination relating to·6·

· ·the scope of your direct testimony?·7·

· · · ··A.· ·Yes.··He will.·8·

· · · ··Q.· ·And could you please just briefly introduce·9·

· ·Mr. Velasquez and explain his role in this.10·

· · · ··A.· ·Mr. Velasquez is principal of Velasquez11·

· ·Environmental Services.··Mr. Velasquez has been12·

· ·assisting us for a number of years in developing our13·

· ·permit applications and developed the application for14·

· ·the Discharge Permit for submittal to the Environmental15·

· ·Department.16·

· · · ··Q.· ·Thank you, Mr. Smith.17·

· · · · · · ·With that, Madam Hearing Officer, we'd like to18·

· ·make most -- make both Mr. Smith and Mr. Velasquez19·

· ·available for cross-examination, as discussed20·

· ·previously.21·

· · · · · · ·MS. ORTH:··All right.22·

· · · · · · ·If Mr. Velasquez would join Mr. Smith at the23·

· ·table, we'll have him sworn in.24·

· · · · · · ·(JUAN VELASQUEZ was administered the oath.)25·

58

· · · · · · ·MS. ORTH:··Okay.··Thank you.·1·

· · · · · · · ·JEFFREY SMITH and JUAN VELASQUEZ·2·

· · · ··having been first duly sworn or affirmed, were·3·

· · · ··examined and testified as follows:·4·

· · · · · · ·MS. ORTH:··Mr. Knight, we'll start with you.·5·

· · · · · · ·Do you have questions of Mr. Smith or·6·

· ·Mr. Velasquez?·7·

· · · · · · ·MR. KNIGHT:··I do not.·8·

· · · · · · ·MS. ORTH:··Mr. de Saillan.·9·

· · · · · · ·MR. DE SAILLAN:··Thank you, Madam Hearing10·

· ·Officer.11·

· · · · · · · · · · · ·CROSS EXAMINATION12·

· ·BY MR. DE SAILLAN:13·

· · · · · · ·MR. DE SAILLAN:··Good morning.14·

· · · · · · ·My name is Charles de Saillan.··I'm with the15·

· ·New Mexico Environmental Law Center.16·

· · · · · · ·I'd like to start out with some questions17·

· ·about the benefits to the community that you discussed18·

· ·earlier, and I want to direct my questions to Mr