PEBBLE PROJECT 2019 Reclamation Report MLUP No....

PEBBLE PROJECT

2019 Reclamation Report

MLUP No. 6118

PREPARED BY: PEBBLE LIMITED PARTNERSHIP

DECEMBER 31, 2019

PEBBLE LIMITED PARTNERSHIP

2019 Reclamation Report i December 31, 2019

CONTENTS

1.0 INTRODUCTION .................................................................................................................................. 2

1.1 Location ........................................................................................................................................ 2 1.2 Reclamation Objectives and Requirements .................................................................................. 2 1.3 Work Summary ............................................................................................................................. 3 1.4 Other Permits and Regulatory Requirements ............................................................................... 4

2.0 PROJECT DESCRIPTION .................................................................................................................... 5

2.1 Site Access .................................................................................................................................... 5 2.2 Environmental Controls ................................................................................................................ 5 2.3 Material & Equipment Staging ..................................................................................................... 6 2.4 Field Staff and Logistics ............................................................................................................... 7

3.0 FIELD ACTIVITIES .............................................................................................................................. 8

3.1 Exploration Activity ..................................................................................................................... 8 3.2 Surface Disturbance and Reclamation .......................................................................................... 8 3.3 Closure Sites ................................................................................................................................. 9 3.4 2019 Repair Sites .......................................................................................................................... 9 3.5 Consumptive Water Use ............................................................................................................. 11 3.6 State Inspection ........................................................................................................................... 11 3.7 Internal Inspections ..................................................................................................................... 12 3.8 MLUP No. 6118 Special Stipulations ........................................................................................ 12

4.0 SIGNATURE ....................................................................................................................................... 14

TABLES Table 1. 2019 Repair Site Summary ...................................................................................................... 4 Table 2. 2019 Permits and Authorizations ............................................................................................ 4 Table 3. 2019 Borehole Inspection Summary ..................................................................................... 12

FIGURES Figure 1. Pebble Project Vicinity Figure 2. Pebble Claim Blocks Figure 3. 2019 Exploration and Maintenance Locations Figure 4. Pebble Project Field Installations

APPENDICES

Appendix A: Operations and Reclamation Photos Appendix B: Drill Site Inspection Categories Appendix C: 2019 Borehole Inspection Status (electronic) Appendix D: AHEA Reclamation Spreadsheet (electronic)


Annual Reclamation Report 2 December 31, 2019

1.0 INTRODUCTION

This report summarizes exploration drilling, reclamation and care and maintenance activities conducted during the 2019 field season at the Pebble Project, a mineral exploration and development project operated by the Pebble Limited Partnership (PLP). PLP is a U.S. company wholly owned by Northern Dynasty Minerals Ltd. of Vancouver, Canada, conducting exploration-related activities on state mineral claims leased to the Pebble East Claims Corporation and Pebble West Claims Corporation. These activities are authorized by Miscellaneous Land Use Permit (MLUP) No. 6118 issued by the Alaska Department of Natural Resources, Division of Mining, Land and Water (ADNR-MLW).

During 2019 PLP drilled six new exploratory boreholes to conduct and monitor aquifer pump tests. Monitoring equipment was installed at four of these sites, while the remaining two sites were retained to conduct additional aquifer pump tests in the future. Repairs were conducted at three former drill sites. Total disturbed area from 2019 activity was less than one-tenth of one acre (0.014 acres [630 square feet]). Except for small portions (140 square feet) at two repair sites, all other surface disturbances have been fully reclaimed in accordance with AS 27.19 and 11 AAC 97. Remaining areas will be fully reclaimed at the start of the 2020 field season.

In addition, PLP conducted minor repair and maintenance activities such as cap replacement and snow pole installations at existing monitoring wells and inspected 158 sites to ensure compliance with MLUP 6118 stipulations. Field season operating days totaled 152, from June 1 through October 31, 2019.

1.1 LOCATION

The Pebble Project is located in the Lake and Peninsula Borough in southwest Alaska. The main deposit is centered approximately 200 miles SW of Anchorage, 60 miles W of Cook Inlet and 17 miles NW of Iliamna (Figure 1). The Pebble Project comprises 2,403 Alaska state mineral claims and contains one of the world’s most significant undeveloped deposits of copper, gold, and molybdenum (Figure 2).

1.2 RECLAMATION OBJECTIVES AND REQUIREMENTS

Alaska statute (AS 27.19) and regulation (11 AAC 97) require mining operators to reclaim any disturbed land to a “stable condition”, which means rehabilitation to a state that allows for the reestablishment of a vegetative cover within a reasonable period of time. MLUP No. 6118, Section 1 identifies reclamation requirements, including:

• Surface disturbance shall be held to a minimum, and will be reclaimed by backfilling, contouring, and spreading of organic rich overburden to promote stabilization and natural revegetation.

• The area reclaimed shall be reshaped and recontoured to blend with surrounding physiography using strippings and overburden, and then stabilized to a condition that shall retain sufficient moisture to allow for natural revegetation.



• Upon completion of drilling activities, drill pads shall be reclaimed as necessary, including reseeding, to encourage natural revegetation of the sites and protect them from erosion.

• All drill hole casings shall be removed or cut off at, or below, ground level unless otherwise specifically approved by the Division of Mining, Land & Water.

• All drill holes shall be plugged with bentonite hole plug, a benseal mud, or equivalent slurry, for a minimum of 10 feet within the top 20 feet of the drill hole in competent material. The remainder of the hole will be backfilled to the surface with drill cuttings.

MLUP No. 6118 also requires the filing of this reclamation report and Annual Reclamation Statement by December 31 of each year the permit is in effect.

MLUP No. 6118 also includes multiple special stipulations addressing:

• Action Requirements on Inspection Reports (Special Stipulation B) • Annual Work Plan (D) • Mineral Closing Order 393 (E) • Bristol Bay Area Plan requirements (F) • Wildlife Management (G-J) • Drilling Waste and Cuttings Management (K) • Annual Exploration/Reclamation Report (M) • Water Use (N)

Activities for special stipulations B, D–K, and M–N are described in Section 3.8. Water use (N) is summarized in Section 3.5. The entirety of this report satisfies Special Stipulation M (Annual Report).

1.3 WORK SUMMARY

Work conducted during the 2019 field season included:

• Drilling, installation and reclamation of six new groundwater monitoring wells (two pump test; four observation).

• Repairs to boreholes 3127, 9475 and GH08-156. • Routine maintenance (e.g., safety marker replacements, plug/cap maintenance, security

controls). • Continued monitoring of select sites to evaluate revegetation success and previous

repairs. • Routine inspection of 158 selected drill sites and field installations.

New drill sites are summarized on the Drill Sites tab in the attached AHEA Reclamation Spreadsheet (Appendix D) and shown on Figure 4. Inspections and site status are presented in Appendix C. Representative photographs are included in Appendix A. Repair sites are summarized in Table 1 and described in Section 3.4.



Table 1. 2019 Repair Site Summary

Borehole ID

Initial Drill Date

ADL Claim No.

Lat NAD83

Long NAD83

Activity

3127 2003 516873 59.9117 -155.2735 Re-drilled; injected filter sand and cemented to surface 9475 2009 540442 59.8937 -155.2985 Re-drilled; cleaned hole to 930 feet; cemented to surface GH08-156 2008 642443 59.9099 -155.4333 Re-drilled; cleaned hole to 30 feet; cemented to surface

1.4 OTHER PERMITS AND REGULATORY REQUIREMENTS

PLP obtained Temporary Water Use Authorizations (TWUA) and Fish Habitat Permits to support exploration and repair work conducted in 2019, as shown in Table 2. A consultant working under contract to PLP (Stephen R Braund and Associates) obtained a cultural resources investigation permit from the state Office of History and Archaeology (OHA) to survey areas where ground disturbances may occur. All compliance reporting for cultural survey work is filed by the consultant directly to OHA.

Table 2. 2019 Permits and Authorizations

Permit/Authorization ID Issuing Agency Expiration Purpose/Use

TWUA F2019-021 ADNR-Water 12/31/2023 Water withdrawal TWUA F2019-022 ADNR-Water 12/31/2023 Water withdrawal TWUA F2019-023 ADNR-Water 12/31/2023 Water withdrawal TWUA F2019-082 ADNR-Water 12/31/2023 Water withdrawal (aquifer) FH19-II-0056 ADFG 12/31/2023 Fish habitat/water withdrawal FH19-II-0057 ADFG 12/31/2023 Fish habitat/water withdrawal FH19-II-0058 ADFG 12/31/2023 Fish habitat/water withdrawal FH19-II-0060 ADFG 12/31/2023 Fish habitat/water withdrawal FH19-II-0062 ADFG 12/31/2023 Fish habitat/water withdrawal FH19-II-0063 ADFG 12/31/2023 Fish habitat/water withdrawal AKG003039 ADEC 9/30/2019 Aquifer pup test discharge AKG003041 ADEC 11/1/2019 Aquifer pup test discharge



2.0 PROJECT DESCRIPTION

2.1 SITE ACCESS

Field operations are based out of PLP’s office at the Iliamna Airport in Iliamna, AK. Access to all worksites within the Pebble deposit is by helicopter only. PLP does not use ground vehicles to access the deposit area or travel between worksites. As a result, the deposit area remains free of temporary roads and tracks.

2.2 ENVIRONMENTAL CONTROLS

2.2.1 Vegetation and Tundra Preservation

PLP’s standard field work procedures require the use of wooden tundra pads and platforms for all heavy equipment and materials to minimize vegetation impacts. Individual worksites are also organized to have as small a footprint as possible, with mobilization and demobilization occurring within the shortest time frame to limit duration impacts. When a surface disturbance is necessary, groundcover, including vegetation, is removed and stockpiled for later use in reclaiming the site. Once the activity is complete, excavated areas are backfilled and re-covered with reserved tundra. Disturbed areas are also revegetated with native seed or an approved seed mixture as appropriate.

2.2.2 Fuel Management and Spill Prevention

PLP uses double-walled, welded aluminum fly tanks to transport and store all fuel for field operations. Tanks are filled at PLP’s Iliamna location to no more than 80 percent of the total capacity. (Most tanks used have a total capacity of 110 gallons, meaning each will contain no more than 88 gallons.) Each tank is visually inspected for leaks or spills prior to transport by helicopter. A separate, double walled 500-gallon storage tank is maintained with fuel at the MSD during the active field season. All residual fuel was drained prior to winterizing field operations.

All active fuel tanks are placed in welded aluminum containments sized to hold 110 percent of the tank’s maximum capacity. Containments are placed on level ground at least 100 feet from any surface water.

Each tank location is stocked with a spill containment and cleanup kit. All field staff have been trained in the proper response and reporting protocols as part of PLP’s SPCC Plan. PLP also maintains a contract with Alaska Chadux Corporation to provide 24-hour spill response, if necessary. After each worksite is demobilized, the area is inspected to ensure no leaks or spills occurred.

2.2.3 Erosion and Sediment Control

Certified weed-free straw was used in conjunction with re-seeding efforts at multiple locations to minimize wind and water erosion and promote more thorough vegetation growth.



2.3 MATERIAL & EQUIPMENT STAGING

2.3.1 Main Supply Depot

The Main Supply Depot (MSD) was initially constructed in 2004 and serves as the primary storage and staging area for field operations. The site occupies approximately 2.5 acres of a gravel bluff in the West Deposit area (SE1/4 SE1/4 of Sec 21, T3S R35W and the NE1/4 NE1/4 of Sec 28, T3S, R35W) (ADL Nos. 516811 and 516874).

Multiple temporary wood frame buildings (including West Bay 4 building) and platform tents provide sheltered storage for machinery, drilling equipment, environmental supplies, and variety of small parts and tools. Small quantities of drilling fluids, motor oils, and antifreeze are stored in sealed, original packaging inside weather-proof shelters. All temporary structures are constructed on elevated platforms or placed on tundra pads. Other items such as drill rods, lumber, tundra pads, outhouses, fuel containments, rig supports, are stored within the MSD yard on racks or elevated platforms.

The MSD was used as the primary staging area for 2019 field activities. At the end of the season, all fuel was removed from the site.

2.3.2 Fuel Storage

Jet A fuel is used for all large mechanized field equipment (pumps, generators, drill rigs). Multiple aluminum fly tanks were transported to and stored at the MSD by helicopter to support 2019 field operations in accordance with PLP’s fuel management policies (Section 2.2.2). The maximum volume of fuel stored at the MSD during 2019 was approximately 1500 gallons. Smaller volumes of fuel were transported to individual work sites as necessary and stored appropriately (aluminum containments, spill kits). All aluminum fly tanks were removed to Iliamna at the end of the 2019 field season. No fuel or other petroleum product spills were identified or reported during the 2019 field season.

2.3.3 Watershed

The Watershed site is located approximately 0.75 miles east of the MSD in the SW1/4 SE1/4 of Sec 22, T3S, R35W (ADL No. 524712). The site consists of three temporary buildings constructed on elevated platforms: one Quonset-style building with a corrugated metal roof (14’ x 16’) that serves as a light machine shop, and two wood frame buildings (9’ x 38’; 10’ x 16’) used to store hoses, miscellaneous hand tools and field supplies. A small generator shed is attached to the Quonset hut. One 110-gallon fuel tank (empty) is kept in an aluminum containment next to the shed.

PLP continues to use the Watershed site as a storage location for field equipment and light machine shop during all months of the year.

2.3.4 West Bay 1 and 3

Each West Bay location consists of two temporary wooden structures (an 8’ x 12’ emergency shelter and a smaller generator shack). These structures are used to provide shelter for monitoring crews during data collection. West Bay 1 is located in the SW1/4 SW1/4 of Sec 23, T3S, R35W



(ADL No. 524714). West Bay 3 is located in the NE1/4 SW1/4 of Sec 33, T3S, R36W (ADL No. 642412). PLP continues to use both West Bay locations to store field equipment.

Note: The facility previously identified as West Bay 4 remains in place, but due to its location within the footprint of the MSD it is not inventoried as a separate field site.

2.3.5 Meteorological and Communications

The Pebble 1 meteorological station is located in the SW1/4 NE1/4 of Sec 20, T3S, R35W (ADL No. 524829). The small site consists of a temporary fiberglass structure (approximately 8 x 8 ft) and associated equipment.

The Koktuli Mountain radio repeater is located in the NE1/4 SW1/4 of Sec 36, T3S, R35W (ADL No. 646608). The small site consists of a temporary metal structure (approximately 8 x 8 ft) and associated equipment.

PLP continues to use the Pebble 1 met station to collect basic meteorological data, while the Koktuli Mountain repeater remains the primary means of communication with helicopters and field crews.

A small, secondary data repeater was placed on South Koktuli Mountain to provide a more consistent link to the Iliamna base station. This small repeater consists of a transmitter and battery pack and is located in the SW 1/4 NW 1/4 of Section 12, T4S, R35W (ADL No. 567941).

2.3.6 Acid Rock Drainage Test Location

The ARD site is located in the SE 1/4 SE 1/4 of Section 22, T3S, R35W (ADL No. 524713). It was set up to evaluate real time weathering and acid generation potential in area rock. The site consists of 12 large plastic barrels filled half way with rock fragments. Barrels are racked on wood tundra pads.

When testing is not active, each barrel is covered with a 40-mil HDPE tarp to prevent water intrusion. Aluminum plates (3/8-inch or 1/4-inch thick) are also placed on top of each barrel and secured with straps to guard against wind and wildlife damage. Drainage tubes are also sealed to prevent leakage.

During the 2019 field season, the ARD test site was inactive. The site has been secured as described above for the 2019/2020 winter. Testing is scheduled to resume in spring 2020.

2.4 FIELD STAFF AND LOGISTICS

All work crews are based out of Iliamna and ferried to the work site by helicopter each day work is being performed. All waste is removed from the field and properly disposed in Iliamna.



3.0 FIELD ACTIVITIES

3.1 EXPLORATION ACTIVITY

PLP conducted new exploration drilling at six locations in 2019. These sites were drilled to as part of ongoing hydrogeological and groundwater studies to support the eventual mine development. Two boreholes are used to conduct aquifer pump tests from bedrock (PW-19-11) and overburden (PW-19-12) layers. The four remaining sites (P-19-90; P-19-91; P-19-92; and P-19-93) are hydrogeology monitoring and observation wells used to record baseline groundwater elevations and changes resulting from aquifer pump tests. Passive monitoring devices were installed in these wells.

A multi-day aquifer pump test was conducted at PW-19-11 from October 19 through October 22. Due to weather delays, pump testing at PW-19-12 was postponed to a future field season. A similar test was conducted at site GH18-406S, which was drilled and reclaimed during the 2018 field season.

All six of the 2019 installations remain active and are used to periodically collect groundwater data required for baseline studies and engineering designs. Sites will be closed and abandoned when they are no longer required for data collection.

Boreholes drilled in 2019 and their status are listed on the Drill Sites tab in the attached AHEA Reclamation Spreadsheet (Appendix D).

3.2 SURFACE DISTURBANCE AND RECLAMATION

Surface disturbances during the 2019 field season totaled 0.014 acres, or 630 square feet. Approximately 0.003 acres, or 140 square feet, remain unreclaimed at repair sites 9475 and GH08-156. Final reclamation at these sites could not be completed before the end of the field season, but disturbed areas and excavated materials were stabilized to minimize any erosion potential. Reclamation will be completed at the beginning of the 2020 field season.

ADL claims with unreclaimed disturbances are as follows:

• ADL 516873: 130 square feet • ADL 642443: 10 square feet

Each site was surveyed and photographed before drilling was initiated. Locations for sumps and the general site layout were recorded. Sump locations were selected and sized to enable sufficient infiltration without overflow. In many cases, sumps are shared between nearby drill sites to minimize the overall disturbed area (see Appendix D, Sump Pits).

The disturbed area for a particular site is calculated using GPS coordinates or field measurements taken by staff. Calculations are verified using drone-based aerial imagery. Disturbed areas typically included one or more sumps, plus a collection trench that drains produced water from the borehole to the sump. PLP does not discharge any produced water to surface waters; no discharge trenches were excavated.



Prior to drilling, sumps and the collection trench were excavated either by hand or using a small Kubota excavator. Excavated material was segregated according to content, with vegetative cover removed in segments and preserved on fabric mats. Bulk soil was stockpiled on a separate fabric mat as close as possible to the original excavation. On average, collection trenches are roughly 15-inches wide. Individual sump pits are generally excavated to a depth of four to six feet with a surface area ranging from 40 to 80 square feet. Sump pits were monitored during drilling to ensure water does not overtop and discharge to the surrounding ground.

When drilling was complete at each site, all equipment and tundra pads were removed by helicopter. Reclamation crews inspected the site for any inadvertent spills and collected all debris, which was removed to PLP’s Iliamna facility for proper disposal. All cuttings produced during drilling were directed to the sumps for burial in accordance with Special Stipulation K. All soil was returned to the excavation source and mounded above the surrounding ground to shed surface water. Salvaged vegetation was replaced atop the excavated trench or sump where practical. Certified weed-free seed mixtures are used for certain sites to promote vegetation growth.

All active 2019 sites will be inspected in the 2020 field season to evaluate reclamation success and the need for any enhancements.

Disturbed area totals for each drill site are summarized on the Sump Pits tab in the attached AHEA Reclamation Spreadsheet (Appendix D). Photos of reclaimed sites are included in Appendix A.

3.3 CLOSURE SITES

No sites were closed or abandoned during the 2019 field season.

3.4 2019 REPAIR SITES

Maintenance activities were conducted during the 2019 field season (June – October). In addition to the six exploration drill sites, repairs were made to three existing sites as described below. Representative photos for re-drilled/grouted sites are provided in Appendix A.

3.4.1 Borehole 3127

This site was first repaired in 2016 by backfilling with bentonite pellets (see 2016 Annual Reclamation Report). These repairs were initially successful but subsequent inspection in spring 2017 showed that minor upwelling (approximately 1 gallon per minute [gpm]) had recurred. Water quickly dissipates into the surrounding tundra. PLP’s drilling contractor (Foundex Pacific) made two attempts to re-drill and grout the site in 2017, with limited success. Water flow was reduced but not completely cut off.

In 2018, the contractor again attempted to plug the borehole by drilling a vertical hole to intersect the original borehole (drilled at -49°angle) at the bedrock layer. The new borehole was then pressure grouted using a mixture of cement (type 10), barite, and bentonite. A site inspection the following week confirmed that a small volume of water was still being produced despite the new repair effort. Produced water did not discharge to surface waters.



In October 2019, PLP retained a new drilling contractor (T&J Enterprises) to repair the borehole. After initial test drilling to a depth of 18 feet, the contractor determined that the original casing had collapsed and could not be re-established. Water was not observed at this level or originating from lower depths. The contractor concluded that shallow groundwater in the overburden was the most likely cause, and proposed measures to dissipate water before it could result in a surface expression.

The contractor inserted a tremie line to the 18-foot depth and injected filter sand (10/20) down the borehole up to the 6-foot depth. A bentonite seal and cement cap (1000 lbs cement, sand (10/20), bentonite chips) was injected from 6 feet to the surface. Inspections on subsequent days until the end of the field season showed all surface expression of water had stopped.

This site will be actively monitored during future field seasons for signs of water. A follow-up inspection will be conducted at the start of the 2020 field season and findings reported to DNR.

3.4.2 GH08-156

This site is located on a hillside that experiences fairly consistent sheet flow at the surface. As a result, the surrounding ground is often saturated for long periods during the summer and fall. This site was identified in 2016 as a potential repair site due to water observed around the base. Water was again observed in spring 2018. In August 2018, PLP conducted additional repairs to the site by re-defining the top of the borehole, removing excess material, and pouring quick-release bentonite pellets down the hole. The pellets congealed successfully, forming a cap over the borehole area that allows water to flow across the surface without ponding or scouring.

Inspection in 2019 showed water again flowing from around the bentonite cap. Field staff could not determine whether observed water was an upwelling from the borehole or shallow groundwater from upgradient areas that was piping to the surface around the bentonite plug. PLP decided to conduct test drilling to determine the water source.

In October 2019, PLP’s drilling contractor (T&J Enterprises) re-established the original borehole and installed HWT casing to 20 feet to seal off surface water. The borehole was triconed to 30 feet, cleaned with air, and allowed to stabilize for observation. The borehole remained dry, confirming that a combination of shallow overburden groundwater and surface water were the source of observed water. The borehole was sealed by removing the casing and injecting a grout mixture (800 lbs cement, 50 lbs bentonite chips) from 30 feet to the surface.

This site will be actively monitored during future field seasons for signs of water. A follow-up inspection will be conducted at the start of the 2020 field season and findings reported to DNR.

Reclamation work at this site was halted due to late season weather. Field staff backfilled sumps and covered soil stockpiles to protect against erosion, leaving approximately 10 square feet to be fully reclaimed to standards. Reclamation will be completed at the start of the 2020 field season.

3.4.3 Borehole 9475

This site is located in the East Deposit area and was previously used for long-term monitoring. Upwelling was first observed in 2014, with an initial repair attempt made in fall 2015. Repairs at



that time were unsuccessful, as upwelling had resumed by spring 2016. Additional repairs were attempted in 2017 by pressure grouting the original borehole to a depth of 102 feet with approximately 160 cubic feet of grout mix. Water flow was cut off and the site reclaimed.

In spring 2018, the site was re-inspected and observed to be producing water at an approximate rate of 2 gpm before dissipating into the ground approximately 130 feet downgradient. Grout material had been flushed to the surface by artesian pressure in late winter/early spring 2018. All flushed material was removed and disposed of off-site. The site was reclaimed and stabilized to prevent erosion and sediment loss. PLP proposed an additional repair effort in its 2019 work plan.

In October 2019, PLP’s drilling contractor (T&J Enterprises) initiated new repairs by re-establishing and cleaning the original borehole to a depth of 930 feet where a bridge plug was encountered. The bridge plug had come loose and was allowing water to flow at a rate of approximately 30 gpm. Pressing down on the plug successfully cut off water flow. The contractor recommended cementing the bridge plug in place rather than attempting to retrieve the plug.

The contractor pumped a cement mixture (5500 lbs cement; 250 lbs bentonite; 2 bags Hi-Seal lost circulation material) from the bridge plug depth (930 feet) to 117 feet below surface. The mixture was allowed to set for 24 hours and observed for any signs of upwelling. After confirming complete shutoff, the contractor cemented the top of the borehole (117 feet to surface) using a cement mixture (2200 lbs cement; 100 lbs bentonite).

Inspections through the end of the field season did not reveal any water upwelling. This site will be actively monitored during future field seasons for signs of water. A follow-up inspection will be conducted at the start of the 2020 field season and findings reported to DNR.

Reclamation work at this site was not completed before the end of the field season because repair efforts were being actively monitored for signs of failure. Sumps have been backfilled, but approximately 130 square feet have yet to be fully reclaimed to standards. Reclamation will be completed at the start of the 2020 field season.

3.5 CONSUMPTIVE WATER USE

All consumptive water use for drilling and repair activities was authorized by Temporary Water Use Authorizations issued by ADNR. Water use is summarized by intake point on the Water Sources tab in the attached AHEA Reclamation Spreadsheet (Appendix D).

One submersible borehole pump with the maximum pumping capacity of 25 GPM was used at each drill rig location to provide operating water. Each pump is affixed with an 18-inch distribution sleeve which has been certified by ADF&G for use in water bodies containing Group A fish (fry stage whitefish) or larger. The screen maximum approach velocity is 0.1 feet per second and has an outer mesh covering of 1mm x 12mm, slotted.

3.6 STATE INSPECTION

DNR-Mining and ADFG-Habitat staff conducted a site inspection on October 21, 2019 and were accompanied by PLP staff. The report did not identify any violations or outstanding work requirements that require action and reporting by PLP (Special Stipulation B). Two well caps that



were not in place during the inspection (GH18-408S and GH18-407S) were replaced when groundwater observations were complete. PLP provided notice and photographs to DNR staff by email on October 28, 2019.

3.7 INTERNAL INSPECTIONS

PLP conducts routine inspections of project drill sites during each field season to ensure compliance with all permit and regulatory requirements. Information is summarized and provided to DNR, including current status, repair or maintenance needs, presence of above ground structures, reclamation status, safety markings, and abandonment method, if applicable.

PLP assigns an alpha-numeric code to each drill site following inspection to more easily characterize each location and plan future maintenance and inspection needs. Numerals (1-3) describe the borehole operating status (e.g., active or potential use for monitoring or future drilling) while letters (A-E) describe the surface condition, including reclamation status and maintenance needs, if any. A detailed explanation of each code is provided in Appendix B.

During the 2019 field season, PLP inspected 158 individual borehole locations and conducted minor maintenance at 122. The status of each project borehole inspected in 2019 is provided in Appendix C.

As shown in Table 3, all sites are in stable condition and require no further action (D and E) beyond follow-up monitoring. None of the project drill sites require major repairs (A) or otherwise pose a notable risk of causing adverse impact.

Table 3. 2019 Borehole Inspection Summary Surface Condition

A B C D E

Major Repairs

Stable/ Minor Repairs

Maintenance or Follow-up

Stable/ Monitored

Stable/ No Action Total [a]

Bore

hole

St

atus

1 Active 0 0 0 35 627 662

2 Inactive 0 0 0 0 0 0

3 Closed 0 0 0 9 709 718 Total 0 0 0 44 1336 1380

[a] Includes drill sites within the active claim boundary only.

3.8 MLUP NO. 6118 SPECIAL STIPULATIONS

3.8.1 B—Action Items on Inspection Reports

See Section 3.6.



3.8.2 D—Annual Work Plan

PLP submitted the 2019 work plan to ADNR by email on March 29, 2019. A work plan for the 2020 season will be submitted by March 31, 2019.

3.8.3 E—Mineral Closing Order 393

PLP did not conduct any activity in 2019 within the boundaries of MCO 393.

3.8.4 F—Talarik Creek Vegetative Buffer

PLP did not conduct any activity in 2019 within 150 feet of the ordinary high water mark of Upper Talarik Creek.

3.8.5 G—Caribou Calving Areas

PLP routinely avoids wildlife when present near work sites. No caribou were observed near any work site. All 2019 work was conducted after the typical calving period for caribou in the vicinity. PLP coordinated with ADFG staff prior to commencing seasonal work as required.

3.8.6 H—Moose Calving, Rutting, and Overwintering Areas

PLP routinely avoids wildlife when present near work sites. No moose were observed near any 2019 work site. PLP coordinated with ADFG staff prior to commencing seasonal work as required.

3.8.7 I—Bear Denning

PLP does not conduct field activities within one-half mile of any known bear dens. PLP requested known bear den locations from ADFG as required, but none were provided. No bear dens were identified during the 2019 field season.

3.8.8 J—Waterfowl Molting Area

PLP did not conduct any 2019 field activities near waterfowl molting areas. Prior to the start of seasonal work, PLP coordinated with ADFG staff to minimize the potential for any impacts. No activity was conducted in BBAP Subunit 10-03.

3.8.9 K—Drilling Waste and Cuttings Management

All cuttings and drilling muds generated during drilling were placed in the bottom of the excavated sump for each drill site and buried at least 18 inches below the surface. Where necessary, recirculation tanks were used to settle solids and re-use water. All 2019 exploration sites have been reclaimed as required. Representative photos are included in Appendix A.

3.8.10 N—Water Use

See Section 3.5.



4.0 SIGNATURE

This report, prepared by Tim Havey, PLP Director, Environment and Permitting, is dated December 31, 2019 and satisfies the annual reporting requirements of MLUP No. 6118.

Signed,

Tim Havey Director, Environment and Permitting, PLP

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Ch u litna River

Nushagak River

Nushagak River

151°20'0"W

151°40'0"W

152°0'0"W

152°20'0"W

152°40'0"W

153°0'0"W

153°20'0"W

153°40'0"W

154°0'0"W

154°20'0"W

154°40'0"W

155°0'0"W

155°20'0"W

155°40'0"W

156°0'0"W

156°20'0"W

156°40'0"W

157°0'0"W

157°20'0"W

157°40'0"W

158°0'0"W

158°20'0"W

158°40'0"W61

°30'0

"N61

°10'0

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°50'0

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LegendPebble Project MineralClaimsNational Forest Service

National Park ServiceState Game Refuge

State Game SanctuaryState Park

Scale 1:2,000,000

0 10 20 30 40 50Miles

Date: 12/20/2016 Author: TH/PLP

Pebble ProjectVicinity Map

Project: 2016 Annual Reclamation Report

1

NAD 1983 StatePlane Alaska 5FIPS 5005 Feet

Figure

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Source(s):National Map, USGSADNR Mineral Claims, 2016

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155°0'0"W

155°0'0"W

155°10'0"W

155°10'0"W

155°20'0"W

155°20'0"W

155°30'0"W

155°30'0"W

155°40'0"W

155°40'0"W

155°50'0"W

155°50'0"W60

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LegendPebble EastClaims Corp.

Pebble WestClaims Corp.

Township

0 10 20 30 40

Miles


Mineral Claims:Overview

Project: 2018 Annual Reclamation Report

2


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155°20'0"W

155°25'0"W

155°25'0"W59

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59°5

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Scale 1:30,975

0 0.25 0.5 0.75 1 1.25

Miles

Date: 12/31/2019

Author: TH/PLP

2019 Exploration andMaintenance Sites

File: ADNR_WtrReport_2019_1031_drill

3

NAD 1983 StatePlaneAlaska 5 FIPS 5005

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18

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2021 22 23 24

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155°12'0"W

155°12'0"W

155°14'0"W

155°14'0"W

155°16'0"W

155°16'0"W

155°18'0"W

155°18'0"W

155°20'0"W

155°20'0"W59

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0"N

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Field Installations:Deposit Area

Project: 2016 APMA

4


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Source(s):ADNR, Alaska Mining Claims,10/2016

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Annual Reclamation Report 1 December 2019

APPENDIX A

Representative Photographs

Appendix A—Operations Photos

1

1. 2019 Drill Sites & Sumps Date: 10/3/2019 General arrangement of sumps for each borehole pair. Photo taken during drilling of P-19-91. PW-19-12, P-19-92, and P-19-93 drilled subsequent to photo.

2. 2019 Drill Sites Post-Reclamation Date: 10/30/2019 Photo shows immediate post-reclamation status of 2019 drill sites and sumps. Black tarps will be left in place through winter to aid in stabilizing ground. Tarps will be removed in spring 2020.


2

3. Aquifer Pump Test Discharge Date: 10/21/2019 Upland discharge of aquifer pump test water under AKG003000.

4. Borehole 3127 Date: 10/30/2019 Post-reclamation after successful repair.


3

5. Borehole 9475 Date: 10/30/2019 Post-repair. Reclamation of site will be finalized at the start of 2020 field season.

6. Borehole GH08-156 Date: 10/21/2019 Photo taken during state inspection during active repairs. Post-repair photo unavailable due to heavy fog and end of season. Reclamation of site will be finalized at the start of the 2020 field season.


4

7. GH18-406S Pump Test Date: 9/26/2019 Photo taken during pump test operation. Borehole at center of photo. Discharge line extends from center to left of photo.

8. GH18-406S Discharge Location Date: 9/26/2019 Upland discharge location for aquifer pump test water under AKG003000.


Annual Reclamation Report December 2019

APPENDIX B

Inspection Categories



Table B-1. Borehole Status Codes

Code Category Description 1 Active Primary designation for active monitoring wells (groundwater quality, geotechnical, etc.).

Also used for some former exploration boreholes that are maintained as possible water sources. Active sites do not have material plugs (grout, cement, bentonite) but may be fitted with mechanical plugs or caps.

2 Inactive Site is not currently used as monitoring/study location, but is preserved for potential future use (e.g., additional drilling, water source). Inactive sites maintain aboveground structures (casing, valves, caps).

3 Closed Site is fully decommissioned. Borehole has been plugged as appropriate. All surface structures removed, with possible exception of wood post indicating location and borehole ID.

Table B-2. Reclamation/Maintenance Condition Codes

Code Category Description A Major

Repairs Site condition presents an identified environmental compliance or health & safety concern, or is at risk of progressing if not addressed as soon as possible. Significant repairs necessary, typically requiring advanced planning, technical staff and additional equipment. Coordination and approval from DNR or other agency may be required. Examples: upwelling of discolored or voluminous water; discharge to surface water.

B Minor repairs Site condition requires repairs or rehabilitation, but is stable and not at risk of deteriorating further. Work does not require technical staff but generally cannot be completed during routine maintenance trips or by one person. Advance approval from DNR or other agency is usually not required unless circumstances dictate. All repair activities summarized in annual report. Examples: Margo plug replacement/installation; large area rehabilitation or revegetation efforts; grout injection.

C Routine Maintenance or Additional Investigation

Maintenance requirements are small or insignificant and generally the result of normal operation or exposure to elements. Repairs can be completed by staff during routine inspections and do not require specialized equipment or advance planning. Also used to identify sites where condition cannot be confirmed, thus requiring additional inspection or involvement of higher level staff. Examples: application of sealant around cap; water valve replacement; ponded surface water with unconfirmed source.

D Stable/ Monitored

Site condition is stable and has been fully reclaimed, but with past maintenance issues or known to have higher maintenance needs. All structural equipment, if any, is in good condition. Routine monitoring is generally more frequent than Category E sites. Examples: artesian sites; sites with recent, major repairs.

E Stable/ No Action

Site condition is stable and has been fully reclaimed. All structural equipment, if any, is in good condition. No known issues. No history of upwellings, leaks, or staining. Located in an area unlikely to cause concern (e.g., wetlands, artesian zone). Inspection frequency is lower than Category D sites.



APPENDIX C

Borehole Status (electronic file)



APPENDIX D

AHEA Reclamation Spreadsheet (electronic file)

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