Reclamation Plan Approval – Alaska

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Palmer Project

Reclamation Plan Approval
Amendment 1

No. J20185690RPA

DEPARTMENT OF NATURAL RESOURCES
Division of Mining, Land and Water

XXX XX, 2019

The Alaska Department of Natural Resources, Division of Mining, Land and Water
(ADNR), in accordance with and subject to Alaska Statutes 27.19 (Reclamation) and the
Alaska Administrative Code, Title 11 (Natural Resources) and Chapter 97 (Mining
Reclamation), approves the Reclamation Plan for the Palmer Project submitted by:

Constantine Mining LLC
800 West Pender St.
Suite 320
Vancouver, BC, Canada V6C 2V6

Constantine Mining LLC is a joint venture between Constantine North Inc. and Dowa
Metals and Mining Alaska LTD.

Throughout this document, unless otherwise specifically indicated, reference to Palmer
Project, Constantine, Constantine North and “the Permittee” are considered a reference to
Constantine Mining LLC.

Throughout this document, unless otherwise specifically indicated, reference to the State,
Department, ADNR, DNR, DMLW or Division are considered a reference to the State of
Alaska – Department of Natural Resources – Division of Mining, Land & Water.

Throughout this document, the Reclamation Plan is considered to consist of:

 Appendix C: Reclamation Plans and Cost Estimates, Palmer Advanced

Exploration Project, Phase II – Underground Exploration (April 2019) of the Plan
of Operations.

Reference to this plan throughout this document is a reference to the Reclamation Plan.
Likewise, any and all stipulations associated with the approval of any supporting
documents are considered to be a requirement of the Amended Reclamation Plan
Approval.

Effective dates of this amended plan approval is subject to the submission of a bond in a
form acceptable by ADNR and no sooner than the date of signing (XXX XX, 2019) for a
period of 5 years (ending on XXX XX, 2024), unless sooner revoked; however,
Constantine’s obligations under the terms and conditions of this plan approval shall
continue, unless sooner terminated in accordance with the provisions of this plan
approval, until completion of all requirements under and pursuant to the Reclamation
Plan.

This reclamation plan approval is for activities upon Mental Health Trust managed lands
encompassed by the Palmer Project as described in the Plan of Operations Palmer
Exploration Project (April 2019).

This plan approval does not constitute certification of any property right or land status
claimed by the applicant.

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The Reclamation Plan was found to be complete and is approved with the following
conditions:

General Stipulations

Financial Assurance. This Amended Reclamation Plan Approval does not take
effect until the Permittee submits a bond in a form and substance approved by ADNR.
The bond can be released or decreased as allowed per 11 AAC 97.435. Modifications to
this Reclamation Plan may, at ADNR’s discretion, require bond review and update. The
total financial assurance amount of $1,116,996.00 has been approved for the Palmer
Project. This amount shall be adjusted annually to account for inflation based on the
Anchorage CPI. The annually adjusted amount shall be submitted by one year from the
effective date of this approval, and each year thereafter for the term of this approval.

Terms of this Plan Approval. The Terms and Conditions contained within the:

 Appendix C: Reclamation Plans and Cost Estimates, Palmer Advanced

Exploration Project, Phase II – Underground Exploration (April 2019) of the Plan
of Operations.

are hereby included as stipulations of this plan approval. If there is a difference between
the Reclamation Plan as submitted and the terms contained within this plan approval, the
terms contained within this plan approval take precedence. Changes to the documents
incorporated herein must be approved by ADNR if they affect this plan approval. If
ADNR approves the changes, they become terms of this Reclamation Plan Approval.

Authorized Officer. The Authorized Officer for ADNR is the Director of the
Division of Mining, Land and Water or his designee. The Authorized Officer is
designated as the Mining Section Chief within the Division of Mining, Land and Water,
currently Steve Buckley. The Authorized Officer may be contacted at 550 West 7th
Avenue, Suite 900D, Anchorage, Alaska 99501-2577, Attention: Steve Buckley,
telephone (907) 269-8621, and fax (907) 269-8930 or at stephen.buckley@alaska.gov.
The Permittee will be notified of changes to the authorized officer as needed.

Reporting. An annual report will be due by March 1st and shall summarize
activities (surface disturbance, reclamation, mining, and milling) conducted during the
previous calendar year and include any monitoring data if applicable. The annual
report shall also address the adequacy of the financial responsibility, including, but not
limited to, inflation, significant changes in reclamation activity costs, concurrent
reclamation, expansion or other changes to the operation of the facility. Electronic
copies should also be sent to ADNR (Jim Vohden at jim.vohden@alaska.gov), and
(Brent Martellaro at brent.martellaro@alaska.gov), Alaska Department of Fish &
Game (ADFG) (Jackie Timothy at jackie.timothy@alaska.gov), and Alaska

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XXX XX, 2019

Department of Environmental Conservation (ADEC) (Tim Pilon at
tim.pilon@alaska.gov and David Khan at david.khan@alaska.gov).
Amendments to this distribution list will be provided to the Permittee as needed.

Maps. The Permittee shall submit to ADNR an annual set of maps illustrating the
current development of all facilities within the project area as described in the
Reclamation Plan. The plan maps shall show cleared and grubbed areas, growth medium
stockpiles, roads, waste rock dump development, material site development and facility
construction. Maps shall be appropriately scaled, with labeled topography, to review the
development of individual facilities.

Environmental Audit. A periodic third-party environmental audit may be required
by the State during the final year of the permit term or sooner if final closure starts during
the permit term. If an audit is required, the following will apply: The field inspection
portion of the audit shall be conducted during the snow free season the year before permit
expiration. The audit will include all aspects of this Reclamation Plan Approval. The
environmental audit is intended to verify the Permittee’s compliance with applicable
environmental laws associated with this permit. The third-party contractor should be
mutually agreed on by the State and the Permittee, but in the event that agreement cannot
be reached, the State retains the final contractor selection decision. Costs for the third-
party contractor shall be borne by the Permittee. The intent of the audit is to evaluate
whether both Permittee management and agency permit administration provide
reasonable assurances that the facility and environmental controls are functioning as
intended. The environmental audit shall include an evaluation of the adequacy of the
approved financial assurance.

Temporary Closure. The Permittee shall notify the Authorized Officer in writing at
least thirty (30) days prior to any planned Temporary Closure longer than the typical
seasonal period of inactivity or one year. The notice shall state the nature and reason for
the Temporary Closure, the anticipated duration of the Temporary Closure, what actions
will be taken to maintain compliance with project permits and plan approvals, and any
event which would reasonably be anticipated to result in the resumption of activities or
the permanent cessation of activities. Operations must resume for not less than ninety
(90) consecutive days in order to terminate the running of the Temporary Closure. If a
Temporary Closure extends beyond three (3) years, the Department may deem mining
operations to be permanently abandoned or ceased, and whereupon final reclamation
must commence unless otherwise agreed by the Department.

The Permittee shall ensure that the project area and facilities are maintained in a safe
condition during a Temporary Closure and the Permittee shall not allow the project area
or facilities to be degraded / eroded or facilities to fall into a state of disrepair during or as
a result of the Temporary Closure. Action shall be taken to prevent or mitigate any
impacts to ground or surface waters from project facilities. All collection, treatment,
maintenance, and monitoring activities required under project permits or plan approvals
shall be performed under any Temporary Closure.

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Abandonment or Cessation of Operations. Not later than thirty (30) days after
the permanent cessation or abandonment of mining and milling operations, the Permittee
shall notify the Authorized Officer of the cessation of mining operations.

Within ninety (90) days of the decision to permanently cease operations, an updated final
Reclamation Plan, schedule, and Monitoring Plan must be submitted to ADNR for
approval. The updated plans must address current conditions at the site.

Permanent reclamation of individual facilities must be implemented and completed in
accordance with the conditions of this Reclamation Plan Approval.

Permanent reclamation of a facility will be complete when the following criteria are met:
 All terms of the current Reclamation Plan and conditions of this Reclamation Plan

Approval have been met; and

 The performance standards under Alaska Administrative Code, Title 11 (Natural

Resources) and Chapter 97 (Mining Reclamation) Article 2 (Reclamation
Performance Standards) have been achieved.

Erosion Standard. Erosion features which form in areas that have been recontoured
and covered with topsoil must be stabilized if they affect the long-term stability of the
reclaimed area or may result in additional erosion or sedimentation. Actions to stabilize
erosion features shall be conducted in a manner that minimizes disturbance to adjacent
areas. Subsequent inspections shall be completed to verify that rills and gullies do not
persist. If chronic or long-term erosion features are identified that are beyond the pre-
mining level of erosion for the area, then remediation of the site drainage that is
contributing to the formation of the rills and gullies shall be completed.

Inspection and Entry. The Permittee shall permit authorized representatives of
ADNR to enter into and upon the area and facilities covered under this plan approval at
all reasonable times without notice for the purpose of inspecting the area and activities
covered under this plan approval. Said inspections shall be subject to such safety and
security procedures as the Permittee may from time to time adopt.

At any time upon ADNR’s written request, the Permittee shall promptly make any and all
records, documents, or other information required to be kept or maintained by law,
regulation, ordinance or this Reclamation Plan Approval available to ADNR for
inspection and copying as reasonably required by ADNR to determine the Permittee in
compliance with local, state and federal laws applicable to the operations authorized
under this plan approval.

Violations. This authorization is revocable immediately upon violation of any of its
terms, conditions, stipulations, nonpayment of fees, or upon failure to comply with any
other applicable laws, statutes and regulations (federal and state).

Assignment. This plan approval may be transferred or assigned with prior written
approval from ADNR. ADNR will only disapprove a transfer with good cause and will

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evaluate whether the proposed assignee (1) is qualified to acquire all permits and
authorizations necessary to conduct operations under the plan; (2) is on notice of default
or subject to an enforcement action by any state agency on any lease, reclamation bond,
or other permit within the state. Any assignee must commit in writing to be bound by
this plan approval to the same extent as the Permittee, and must provide to ADNR all
proofs of insurance, bonds, or undertakings required by this plan approval. Transfer of
this plan approval may, at ADNR’s discretion, require bond review and update.

Other Authorizations. The issuance of this authorization does not alleviate the
necessity of the Permittee to obtain authorizations required by other agencies for this
activity.

Change of Address. Any change of address must be submitted in writing to the
Authorized Officer.

Modifications. Any request for modification of the Reclamation Plan and any other
affected permits or authorizations must be made by written application to ADNR.
Amendments to these plans may, at the discretion of ADNR, require bond review and
update.

Statutes and Regulations. This plan approval is subject to all applicable state and
federal statutes, including state, federal, and any local statutes and ordinances in effect on
the effective date of this plan approval, new statutes, regulations, and ordinances enacted
or promulgated after said effective date, and changes to existing statutes and regulations
made after the effective date, to the extent constitutionally permissible.

Severability. If any clause or provision herein contained shall be adjudicated to be
invalid, it shall not affect the validity or effect of any other clause or provision of this
plan approval, nor constitute any cause of action in favor of either the Permittee or
ADNR as against the other.

Save Harmless. The recipient of this Reclamation Plan Approval shall indemnify,
save harmless, and defend the ADNR, its agents and its employees from any and all
claims, actions or liabilities for injuries or damages sustained by any person or property
arising directly or indirectly from approved activities or the Permittee’s performance
under this Reclamation Plan Approval.

Project Specific Stipulations

Permit Renewal. At least one hundred and twenty (120) days before the expiration
of this plan approval, the Permittee must submit to the department an updated
reclamation plan and cost estimate for approval.

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Commencement of permitted activities will be considered an acceptance by
Constantine of these stipulations.

Approved: ____________________________

__________________

Steve Buckley
Mining Section Chief
Division of Mining, Land & Water
Alaska Department of Natural Resources

Date

Appeal Right and Procedure

A person affected by this decision may appeal it, in accordance with 11 AAC 02. Any
appeal must be received within 20 calendar days after the date of “issuance” of this
decision, as defined in 11 AAC 02.040(c) and (d) and may be mailed or delivered to the
Commissioner, Department of Natural Resources, 550 W. 7th Avenue, Suite 1400,
Anchorage, Alaska 99501; faxed to 1-907-269-8918, or sent by electronic mail to
dnr.appeals@alaska.gov. Under 11 AAC 02.030, appeals and requests for
reconsideration filed under 11 AAC 02 must be accompanied by the fee established in 11
AAC 05.160(d)(1)(F), which has been set at $200 under the provisions of 11 AAC
05.160 (a) and (b).

This decision takes effect immediately. If no appeal is filed by the appeal deadline, this
decision becomes a final administrative order and decision of the department on the 31st
calendar day after issuance. An eligible person must first appeal this decision in
accordance with 11 AAC 02 before appealing this decision to Superior Court. A copy of
11 AAC 02 may be obtained from any regional information office of the Department of
Natural Resources.

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