July 2013 July 2013 Environmental Update Environmental Update

for SLEMA Boardfor SLEMA BoardZhong LiuZhong Liu

July 31, 2013July 31, 2013

OutlineOutline1.1. Mine UpdateMine Update

2.2. Inspection UpdateInspection Update

3.3. Regulators’ UpdateRegulators’ Update

4.4. Aboriginal UpdateAboriginal Update

5.5. Stakeholders’ UpdateStakeholders’ Update

6.6. SLEMA ReviewsSLEMA Reviews

AcronymsAcronyms AANDC – Aboriginal Affairs and Northern Development Canada AANDC – Aboriginal Affairs and Northern Development Canada

(previous INAC – India and Northern Affairs Canada)(previous INAC – India and Northern Affairs Canada) AEMP – Aquatic Effects Monitoring ProgramAEMP – Aquatic Effects Monitoring Program ARD – Acid Rock DrainageARD – Acid Rock Drainage DFO – Fisheries and Oceans CanadaDFO – Fisheries and Oceans Canada EC – Environment CanadaEC – Environment Canada ENR – Department of Environment and Natural Resources, GNWTENR – Department of Environment and Natural Resources, GNWT GNWT – Government of the Northwest TerritoriesGNWT – Government of the Northwest Territories MVLWB – Mackenzie Valley Land and Water BoardMVLWB – Mackenzie Valley Land and Water Board PK – Processed KimberlitePK – Processed Kimberlite SLEMA – Snap Lake Environmental Monitoring AgencySLEMA – Snap Lake Environmental Monitoring Agency SNP – Surveillance Network ProgramSNP – Surveillance Network Program TDS – Total Dissolved SolidsTDS – Total Dissolved Solids WEMP – Wildlife Effects Monitoring ProgramWEMP – Wildlife Effects Monitoring Program WTP – Water Treatment PlantWTP – Water Treatment Plant WMP – Water Management PondWMP – Water Management Pond

1.1 Mine Update – June 20131.1 Mine Update – June 2013 Production rate: Production rate: 92.692.6% of its capacity (% of its capacity (87,490 87,490 tonnes of tonnes of

kimberlite processed)kimberlite processed) 4,040 4,040 mm33 of water withdrawn from Snap Lake of water withdrawn from Snap Lake 1,122,168 m1,122,168 m33 of treated water discharged into Snap Lake of treated water discharged into Snap Lake 75,440 75,440 tonnes of coarse reject and tonnes of coarse reject and 60,79460,794 m m33 of slimes of slimes

deposited in the North Piledeposited in the North Pile 2 surface 2 surface spills (spills (00 reportable) reportable) Water sampled in Water sampled in 1313 monitoring stations monitoring stations

The monthly average for all parameters met complianceThe monthly average for all parameters met compliance There were no exceedances observed for SNP stations 02-17B There were no exceedances observed for SNP stations 02-17B

nor 02-16i for the month ofnor 02-16i for the month of June. Exceedances were seen for June. Exceedances were seen for aluminum and copper at a number of surface runoff sitesaluminum and copper at a number of surface runoff sites (SNP (SNP 02-04.1, SNP 02-05, and SNP 02-06) as well, surface runoff 02-04.1, SNP 02-05, and SNP 02-06) as well, surface runoff sites SNP 02-09.4 and SNPsites SNP 02-09.4 and SNP 02-09.5 experienced exceedances 02-09.5 experienced exceedances in ammoniain ammonia

1.2 Spill Reporting in 1.2 Spill Reporting in JulyJuly 2013 2013

Date Location Waste Spilled

Amount (L) Cause

July 20 Process water line

Process water 1,500 Hole in water line

1.3 Air Quality, Meteorological Monitoring, and Emission Reporting 2012 Annual Report

Submitted on July 8, 2013 Required by Water Licence and

Environmental Agreement

1.4 Installation of a Second Permanent Diffuser

Dated July 13, 2013 The current main diffuser and outfall is capable of

discharging 35,000 m3/day, but underground mine flows are increasing and current volumes are approaching 37,000 m3/day

A Second Permanent Diffuser is required to allow for responsible handling of the increased inflows and to properly discharge the treated effluent

• Identical to previously installed diffuser• Plume Characterization Study proposed for the summer of

2014

1.5 Interim Mine Closure and Reclamation Plan

Submitted on July 22, 2013 Version 3.2 The ICRP is considered to be a “living”

document which will undergo several further major revisions over the mine life

1.6 Test Drilling in the West Cell

Dated July 29, 2013 De Beers plans to carry out geotechnical test drilling

and pit program within the footprint of the proposed West Cell to determine the bedrock competence and plan the extension of the grout curtain from the East to West cells

Estimated commencement is 3 September 2013 Timeline from commencement of the geotecknical

studies to the availability of the West Cell to receive processed kimberlite is approximately 3 years

1.7 Revised Chapters 6 and 7 of the AEMP

Chapters 6 and 7 of the AEMP revised on July 31, 2013 Chapter 6 (AEMP Response Framework) and Chapter 7 (Weight of Evidence Integration)

2. Inspection Update 2. Inspection Update

AANDC Inspector – Patrick KramersAANDC Inspector – Patrick Kramers No inspection reports received in July No inspection reports received in July

20132013

2.1 Issues with May 2013 SNP Monthly Report

The Inspector identified 6 issues (reporting, lab analysis, and exceedances) with May 2013 SNP Monthly Report on July 5

De Beers responded in a timely manner and communicated with the Inspector via follow-up e-mails

3. Regulators’ Update3. Regulators’ Update – MVLWB – MVLWB

Updated Water Licence MV2011L2-0004 on July 18, 2013

To reflect approved changes to the AEMP Design Plan

Requested stakeholders’ comments on De Beers request on the Installation of a Second Permanent Diffuser, on July 25

Due on August 13 Requested stakeholders’ comments on De

Beers Interim Mine Closure and Reclamation Plan, on July 31

Due on August 30

3.1 Monthly Average Limit for 3.1 Monthly Average Limit for ChlorideChloride

MVLWBMVLWB staff sent an e-mail to De Beers on June 4, staff sent an e-mail to De Beers on June 4, 20132013

““iit was brought to my attention that the average monthly limit for t was brought to my attention that the average monthly limit for chloride reported in the April 2013 SNP report is 303 mg/L (or chloride reported in the April 2013 SNP report is 303 mg/L (or close to that). The WL monthly EQC for chloride is 310 mg/L. In close to that). The WL monthly EQC for chloride is 310 mg/L. In looking at the trend linelooking at the trend line (also provided in the SNP report pg 38) (also provided in the SNP report pg 38) it appears as though the chloride numbers seem to increase it appears as though the chloride numbers seem to increase around mid February. Could there be an operational reason for around mid February. Could there be an operational reason for this increase?this increase?””

““I wanted to bring this to your attention so you can comment on I wanted to bring this to your attention so you can comment on what De Beers is doing to ensure that the average annual what De Beers is doing to ensure that the average annual monthly limit is not exceeded?monthly limit is not exceeded?””

De Beers Responses Date June 11, 2013 via e-mail

“The increase in TDS is based on where we are mining. Traditionally with Canadian shield rock the deeper that you mine, the higher the TDS values in the connate water, so you are right it is operationally based.”

“In terms of ensuring that the limit is not exceeded we are watching our sampling closely, collecting water from various faces as we progress and looking at Chloride kick back thresholds to be installed similarly to those for nitrates in the WTP. In terms of long term management this will be the basis for our water license amendment and the TDS response plan.”

3.2 Phase IV Starter Cell Embankment Raise

The MVLWB, on July 18, 2013, reviewed De Beers request on modification for the Phase IV Raise, but unable to consider it as a modification, because the proposed maximum elevation is higher than what was scoped in the MVEIRB’s Environmental Assessment of the Project

In order to proceed with the proposed Phase IV Raise, De Beers must submit an amendment application for the Board's consideration. The amendment application will be subject to preliminary screening

Additional information regarding this direction is available at http://www.mvlwb.ca/Boards/mv/Registry/2011/MV2011L2-0004/MV2011L2-0004%20-%20DeBeers%20-%20Phase%20IV%20Starter%20Cell%20Embankment%20Raise%20-%20Amendment%20Application%20required%20-%20Jul18-13.pdf

4. Aboriginal Update4. Aboriginal Update

No comments received from Aboriginal No comments received from Aboriginal groups in July 2013groups in July 2013

5. Stakeholders’ Update5. Stakeholders’ Update

Comments on De Beers request on the Installation of a Second Permanent Diffuser by DFO on July 29, 2013

5.1 DFO Comments on De Beers 5.1 DFO Comments on De Beers Request on the Second Diffuser Request on the Second Diffuser

DFO has concluded that De Beers proposal is not likely to result in impacts to fish and fish habitat

De Beers will not need to obtain a formal approval from DFO in order to proceed with the proposal

66. SLEMA Reviews. SLEMA Reviews

Quarterly Toxicity Results for SNP 02-17Quarterly Toxicity Results for SNP 02-17BB

66..11 Quarterly Toxicity Results for SNP Quarterly Toxicity Results for SNP 02-1702-17BB

Submitted on July 31, 2013 Water Treatment Plant (WTP) effluent samples

taken on June 18, 25 and 30 were tested• By HydroQual Laboratories Ltd. (Calgary) during June and

July 2013 Standard biological test methods used 9 analysis reports for each samples submitted

• 1 Algae test – inhibitory effects did not occur• 2 Ceriodaphnia tests – no effect occurred• 3 Trout tests – no effect occurred• 3 Daphania tests – no effect occurred

Comments from the Environmental Analyst

No concerns are raised