1. NRCan Final Hearing Presentation Meliadine Gold Project Kate Cavallaro Senior Environmental Assessment Officer Environmental Assessment Division External Relations Science and Policy Integration Natural Resources Canada August 21-27, 2014

2. Outline  1. Mandate and Role  2. Technical Review Comments and Recommendations  Permafrost and Terrain Stability  Hydrogeology  Potential for Acid Generation and Metal Leaching From Mined Materials  3. Conclusions 2

3. 3 NRCan’s Role in the Meliadine Gold Project  The mandate of Natural Resources Canada (NRCan) is to develop, implement and deliver policies, programs, science and technology for the sustainable development and responsible use of Canada’s mineral, energy and forestry resources. Specific to the Meliadine Gold Project:  NRCan may issue a licence under the Explosives Act.  NRCan is providing advice and expertise in:  Permafrost and terrain stability,  Hydrogeology, and  Potential acid generation/metal leaching from mined materials.

4. NRCan Review – Location of Cap Magazine, Powder Magazine Area and Emulsion Plant 4

5. NRCan’s Review – Explosives Manufacture and Storage  NRCan is satisfied with the information provided in the Final Environmental Impact Statement (EIS).  AEM (or its explosives contractor) will be required to submit applications for the manufacturing and storage facilities including information on: types and maximum quantities of explosives, storage plans, liquid effluent plans, spill contingency plans, security plans, etc.  NRCan has Guidelines for Bulk Explosives Facilities: Minimum Requirements.Guidelines for Bulk Explosives Facilities: Minimum Requirements  NRCan has no recommendations for this aspect. 5

6. 6 NRCan’s Review – Permafrost and Terrain Stability Access Road and Borrow Site Development  Disturbance of the land can result in changes to the ground thermal regime leading to increases in thaw depth, surface settlement, changes to drainage and erosion.  AEM’s terrain sensitivity mapping shows a potential for ice-rich sediments along the road alignment.  NRCan agrees with AEM’s conclusion that impacts on terrain can be minimized with appropriate design. The information is sufficient for the environmental assessment review phase. NRCan Recommendation:  Prior to construction, conduct additional site-specific investigations to further characterize subsurface conditions in sensitive terrain.  AEM has agreed in principle to NRCan’s recommendation.

7. 7 NRCan’s Review – Permafrost and Terrain Stability Mine Waste Storage Facility Design and Stability  The development of frozen conditions within the and under the mine waste storage facilities reduce the potential for seepage.  NRCan agrees with AEM that geotechnical investigations and analysis are sufficient for the environmental assessment review phase. Although AEM is not relying on frozen conditions, thawing of facility and dike foundations can result in instabilities. NRCan Recommendations Prior to construction:  Conduct detailed thermal analysis to support design of the dikes, the waste rock storage facility and the tailings storage facility.  Conduct analysis to determine the extent of talik at B7 (which considers the effect of nearby water bodies).  Develop and implement a monitoring program for tailings and waste rock storage facilities (e.g. thermal condition and, stability).  AEM has agreed in principle to NRCan’s recommendations.

8. 8 NRCan’s Review – Hydrogeology Data limitations and Conceptual Groundwater Model  Project activities will result in changes to the shallow and deep groundwater regimes.  Groundwater is not used for drinking water, therefore primary concern is influence on surface water  One borehole and monitoring well are the primary source of hydrogeological data for the sub-permafrost zone.  AEM provided additional information and figures, and an evaluation of the conceptual model to the extent possible and indicated that it will consider the addition of new hydraulic data as part of monitoring and follow-up.

9. NRCan’s Review – Hydrogeology Data limitations and Conceptual Groundwater Model NRCan’s Conclusion  NRCan acknowledges the difficulty and high cost of defining groundwater flow rates and travel times in a remote sub-permafrost zone.  The estimates from the numerical model provide reasonable estimates for the environmental assessment. NRCan Recommendations  Prior to construction tabulate water pressure, density and fresh water head data together for both past and future measurements.  Prior to construction, document methods for monitoring of hydraulic head and re-collect reliable head measurements to verify conceptual model and validate numerical model.  During the pre-development, construction and operation phases, collect new hydraulic data in key areas to better define vertical and horizontal groundwater flow.  AEM has agreed in principle to NRCan’s recommendations. 9

10. 10 NRCan’s Review – Hydrogeology Saline Water Management  AEM expects saline water to flow into underground mine and is considering two options for its management:  discharge to the ocean; or,  treat saline water to reduce volume and store it at the surface for subsequent disposal in the underground mine.  Based on NRCan’s review of the FEIS, there is uncertainty in the predicted volume of saline water inflow to the underground mine. NRCan’s Recommendation:  In the development of its saline water management plan, AEM should take into account the uncertainty in the prediction of saline water inflow.  AEM has agreed in principle to NRCan’s recommendations.

11. NRCan’s Review – Potential for Acid Generation/Metal Leaching From Mined Materials  Mining involves the excavation of large amounts of rock and ore.  Ore is processed to obtain a commodity (e.g. gold). The rest becomes waste (e.g. waste rock and tailings).  In the presence of oxygen and water, sulphide-bearing rocks can develop acidic drainage, which contains elevated concentrations of metals and other elements that can lead to adverse environmental effects if not properly predicted, controlled and mitigated. 11

12. 12 NRCan’s Review – Potential for Acid Generation/Metal Leaching From Mined Materials Representation of Waste Rock  AEM collected rock samples to develop an understanding of the behaviour of waste rock, and to predict the potential for acidic drainage at the project site.  Although the number of samples per rock type at each deposit is less than the recommended levels, it is sufficient to make a preliminary evaluation of the potential for acidic drainage.  NRCan is satisfied that, for the purposes of the environmental assessment, AEM collected an adequate number of samples.  NRCan recommends that AEM continuously monitor waste rock behaviour through additional sampling and analyses as part of their environmental monitoring program.

13. 13 NRCan’s Review – Potential for Acid Generation/Metal Leaching From Mined Materials Acid-Base Accounting Test Results  AEM determined the acid and neutralization potential of the waste rock.  At the technical meeting, NRCan recommended that AEM redo its calculations to ensure that a conservative approach is used to classify waste rock.  AEM conducted additional work and re-interpreted the acidic drainage potential of each waste rock type.  NRCan is satisfied with AEM’s response. This adjustment provides a more conservative approach to acidic drainage assessments.

14. 14 NRCan’s Review – Potential for Acid Generation/Metal Leaching From Mined Materials Acid Rock and Management of Waste Rock  In the Draft EIS, AEM concluded that most mined material has no potential to generate acid. Waste rock did not require mitigation to prevent oxidation.  NRCan requested that AEM reassess the potential for acid generation in the Discovery Deposit waste rock.  In the Final EIS, AEM indicated that the Discovery deposit waste rock are uncertain or potentially acid generating. Therefore, the waste rock will require management to prevent the onset of acidic drainage.  NRCan is satisfied with AEM’s response, as it is understood that AEM will develop a waste rock management plan.

15. 15 NRCan’s Review – Potential for Acid Generation/Metal Leaching From Mined Materials Tailings Characterization  In the Draft EIS, AEM stated that the tailings are not potentially acid generating and that the bulk tailings are not expected to require special control measures.  NRCan recommended that more conservative acid base accounting parameters be applied and that further consideration be given to the presence of arsenic in the tailings.  The Final EIS indicates that the tailings from the Discovery deposit will likely produce acid. Other deposit ore tailings (F Zone, Pump, Wesmeg) show some uncertain potential for acid generation. Overall, if properly blended, the tailings have sufficient neutralization and are not expected to be acid generating.

16. 16 NRCan’s Review – Potential for Acid Generation/Metal Leaching From Mined Materials Tailings Management  NRCan requested that AEM reassess tailings management options.  AEM has provided additional details on its milling operation and tailings management strategy.  NRCan is satisfied with AEM’s response as it is understood that the testing results and predictions will be continuously monitored and validated as parts of the operation’s environmental management system.

17. 17 Summary of NRCan’s Conclusions  For the purposes of the environmental assessment NRCan is satisfied with the information provided by AEM in relation to:  Permafrost and Terrain Stability  Hydrogeology  Potential for Acid Generation/Metal Leaching From Mined Materials  NRCan’s recommendations have been accepted in principle by AEM.  Should the project proceed, NRCan proposes the following terms and conditions for the NIRB’s consideration:  Permafrost and Terrain Stability: AEM should develop and implement a program to monitor the thermal condition and stability of the tailings and waste rock storage facilities.  Water quality (groundwater): AEM’s development of a saline water management plan should consider the potential for higher than predicted volumes of saline water inflows into the underground mine.  Water quality (geochemistry): AEM’s operational geochemical characterization program should include continual monitoring and validation of results and predictions. Prior to the commencement of excavation of the Discovery deposit, AEM should develop a waste rock management plan to address the potential for acid generation.

18. Questions? 18