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Ministry of the Environment and Climate Change Ministère de l’Environnement et de l’Action en matière de changement

climatique

AMENDED ENVIRONMENTAL COMPLIANCE APPROVAL NUMBER 7113-A28NUF

Issue Date: February 26, 2016

Lac des Iles Mines Ltd. Post Office Box, No. 10547 Thunder Bay, Ontario P7B 6T9

Site Location: Lac Des Iles Mine Site Latitude 49 deg. 10 'N Longitude 89 deg. 37 ' W Unorganized Territory, District Of Thunder Bay

You have applied under section 20.2 of Part II.1 of the Environmental Protection Act, R.S.O. 1990, c.E. 19 (Environmental Protection Act) for approval of:

Sewage works for the collection, transmission, treatment and disposal of tailings effluent wastewaterand sanitary sewage from a mining and milling facility processing sulphide ores by flotation to obtainsulphide concentrate bearing platinum, palladium, gold, copper and nickel, consisting of the following:

PROPOSED WORKS: WATER MANAGEMENT FACILITY Construction of a new water management facility to handle all reclaim water and stormwater runofffrom the associated drainage area, consisting of the following: Water Management Facility #1 (WMF #1)

● Water Management Facility #1 (WMF #1) to be located adjacent to the south of the West TMF andSouth TMF, encompassing approximately 44.0 ha with a total storage capacity of 2.5 Mm3 and amaximum crest elevation of 490.0 meters, equipped with a 10 meter wide emergency spillwaychannel at invert elevation of 488.5 meters and a reclaim water pump discharging to the milloperation and to the wastewater treatment plant described below; and

● One (1) water pumping station, located in the WMF #1 with a pipeline discharging reclaim water tothe mill;

● Including all controls and associated appurtenances. All in accordance with documents listed in Schedule 'A'. Upgrades and re-configuration of existing approved sewage works consisting of the following; TAILINGS MANAGEMENT FACILITY

West Tailings Management Facility (West TMF) ● Re-commissioning of the West Tailings Management Facility (West TMF), located west of the EastTMF, encompassing approximately 131.4 hectares, with perimeter Dam 5, Super Hwy, West Dam,South West Dam, and South Dam having crest elevations ranging from 509.0 to 512.0 metres,with a planned ultimate crest elevation of 516.0 metres and a total ultimate storage capacity of20.5 million cubic metres (estimated); tailings effluent discharging to Water Management Facility#1 (WMF #1) described above.

East Tailings Management Facility (East TMF) ● Upgrade of the existing East Tailings Management Facility (East TMF) by merging internal CellsB, 2 and 3, encompassing approximately 71.8 ha, with perimeter Dams 2, 3A, 3B, 6, and SD1having crest elevations varying between 503.0 metres and 506.0 metres, with a planned ultimatecrest elevation of 514.5 meters and a total effective storage capacity of 19.4 million cubic metresof tailings (estimated); tailings effluent discharging to Water Management Facility #1 (WMF#1)described above.

North Cell

● The North Cell, located north of the East TMF and formerly considered part of the East TMF,encompassing approximately 16.9 ha, with perimeter dam North Cell Berm having a crestelevation of 502.0 m, and a total effective storage capacity of 1 million cubic metres (estimated)used for existing tailings and intermediate storage of wastewater.

East Reclaim Cell

● The East Reclaim Cell to be used for tailings disposal, located southwest of the East TMF,encompassing approximately 52.6 ha, with perimeter dams West Dam and South Dam having acrest elevation of 492.5 m, with a planned ultimate crest elevation of 513.0 meters and a totaleffective storage capacity of 8.9 million cubic metres of tailings (estimated); tailings effluentdischarging to Water Management Facility #1 (WMF#1) described above.

South Tailings Management Facility (South TMF)

● Upgrade of the South Tailings Management Facility (South TMF), located west of the West TMF,by merging the existing South Reclaim Pond to be part of the upgraded South TMF,encompassing a total area of approximately 79.0 hectares, with perimeter Dams S1, S2, S3, andS4 having crest elevations of 509.1 to 510.5 metres, with a planned ultimate crest elevation of523.5 metres and a total ultimate storage capacity of 23.1 million cubic metres (estimated); tailingseffluent discharging to Water Management Facility #1 (WMF #1) described above.

Pit Water Discharge

- Water pumping station located at the open pit with a pipeline directing pit water to the North Cell,the East Tailings Management Facility or directly to the mill for use as process water;

SANITARY SEWAGE

- One (1) sanitary sewage packaged pre-treatment plant with a rated capacity of 60 cubic metresper day, serving the mine shop, administration building and mill, consisting of a primary clarifier, afour-stage rotating biological contactor and a secondary clarifier, with treated effluent mixed withtailings in the final tailing box in the mill, and deposited with the tailings in the TailingsManagement Facility, and sanitary sewage from the dry and new administration buildings to betreated with an agitator and pumped to the North Cell, with signs posted warning of sewage

deposition, and with said deposition area to be situated such that there is a maximum retentiontime available for the natural degradation of sanitary sewage in the Tailings Management Facilityand in the North Cell;

All in accordance with documents listed in Schedule 'A'. PREVIOUS WORKS APPROVED ON OR BEFORE APRIL 22, 2008: LAC DES ILESWASTEWATER TREATMENT PROCESS A wastewater treatment system using flocculating andagglomerating agents to remove talc and talc-like particles from the wastewater, consisting of:

One (1) mixing tower for flash mixing of two reagents ensuring good contact with the fine colloidalparticles in the treatment feed;

One (1) 45.5 cubic metres reactor tank for the development of flocs with gentle agitation using acontrolled flow of air;

One (1) 22.7 cubic metres conical bottom tank for the settling of flocculated solids, with the solids inthe underflow from this tank being disposed in the Tailings Management Facility; the overflow fromthe tank to be treated with flocculating agent and delivered to the overflow launder from where itflows to the final conditioning stage;

Two (2) 13.6 cubic metres mechanically agitated tanks for final conditioning;

One (1) 4,540 cubic metres final settling pond for the agglomeration of particles from the secondand third conditioning tanks;

One (1) reactor/clarifier with a design flow rate of approximately 550 cubic metres per hour for theremoval of suspended solids, the sludge being disposed in the Tailings Management Facility;

With effluent from the settling pond and/or reactor/clarifier being discharged to Hasson Lake;

APPURTENANCES

All other controls, electrical equipment, instruments, piping, pumps, valves and appurtenancesessential for the proper operation of the above sewage works.

All in accordance with the documents listed in Schedule 'A'. For the purpose of this environmental compliance approval, the following definitions apply: "Approval" means this entire document and any schedules attached to it, and the application; “Contaminated” means that the solids or fluids have concentrations of chemicals of concern that havethe potential to adversely affect the environment or human health.

"Daily Concentration" means the concentration of a contaminant in the effluent discharged over anysingle day, as measured by a composite or grab sample, whichever is required; "Director" means a person appointed by the Minister pursuant to section 5 of the EPA for the purposesof Part II.1 of the EPA; "Discharge Period" means the period between 15th March and 30th November of each year with theannual start date conditional on the commencement of snowmelt; "District Manager" means the District Manager of the Thunder Bay District Office of the Ministry; "EPA" means the Environmental Protection Act , R.S.O. 1990, c.E.19, as amended; “Equivalent equipment" means a substituted equipment that meets the required quality andperformance standards of a named equipment; "Final Effluent Discharge Point" means the point at which effluent leaves the sewage works and entersthe natural watershed. The designation and location of the current Final Effluent Discharge Point isshown in Figure 2 - General Site Plan dated August 2009; "Limited Operational Flexibility” (LOF) means the Modifications that the Owner is permitted to make tothe Works under this Approval; "Mining Dams" mean retaining structures that exist at mine sites or metallurgical plant sites that aredesigned to retain solids (that may or not be contaminated 1 ) and/or contaminated liquids. Example ofmining dams include:

· Tailings dams (including perimeter dams for thickened tailings disposal) · Contaminated runoff collection and diversion dams · Dams that contain reservoirs as part of a collection and treatment system · Polishing pond dams · Seepage collection dams · Sludge storage dams

"Ministry" means the ministry of the government of Ontario responsible for the EPA and OWRA and includes all officials, employees or other persons acting on its behalf; “Modifications" means any addition, replacement, alteration, expansion or optimization for the Worksas specified under Limited Operational Flexibility; "Monthly Average Concentration" means the arithmetic mean of all Daily Concentrations of acontaminant in the effluent sampled or measured, or both, during a calendar month; “Notice of Modifications” means the form entitled “Notice of Modifications to Sewage Works”; "Owner" means Lac des Iles Mines Ltd. and its successors and assignees; "OWRA" means the Ontario Water Resources Act , R.S.O. 1990, c. O.40, as amended; "Previous Works" means those portions of the sewage works previously constructed and approvedunder an Approval; "Proposed Works" means the sewage works described in the Owner’s application, this Approval, to the

extent approved by this Approval; "Rated Capacity" means the Average Daily Flow for which the Works are approved to handle; "Works" means the sewage works described in the Owner's application, and this Approval, andincludes Proposed Works, Previous Works and Limited Operational Flexibility. You are hereby notified that this environmental compliance approval is issued to you subject to theterms and conditions outlined below: TERMS AND CONDITIONS 1. GENERAL CONDITION (1) The Owner shall ensure that any person authorized to carry out work on or operate any aspect ofthe Works is notified of this Approval and the conditions herein and shall take all reasonable measuresto ensure any such person complies with the same. (2) Except as otherwise provided by these conditions, the Owner shall design, build, install, operateand maintain the Works in accordance with the description given in this Approval, and the applicationfor approval of the Works. (3) Where there is a conflict between a provision of any document in the schedule referred to in thisApproval and the conditions of this Approval, the Conditions in this Approval shall take precedence,and where there is a conflict between the documents in the schedule, the document bearing the mostrecent date shall prevail. (4) Where there is a conflict between the documents listed in the Schedule submitted documents, andthe application, the application shall take precedence unless it is clear that the purpose of thedocument was to amend the application. (5) The Conditions of this Approval are severable. If any Condition of this Approval, or the applicationof any requirement of this Approval to any circumstance, is held invalid or unenforceable, theapplication of such condition to other circumstances and the remainder of this Approval shall not beaffected thereby. 2. CHANGE OF OWNER (1) The Owner shall notify the District Manager and the Director, in writing, of any of the followingchanges within thirty (30) days of the change occurring:

(a) change of Owner or operating authority, or both; (b) change of address of Owner or operating authority or address of new owner or operatingauthority; (c) change of partners where the Owner or operating authority is or at any time becomes apartnership, and a copy of the most recent declaration filed under the Partnerships RegistrationAct;

(d) change of name of the corporation where the Owner or operator is or at any time becomes acorporation, and a copy of the most current "Initial Notice or Notice of Change" (Form 1, 2 or 3 ofO. Reg. 189, R.R.O. 1980, as amended from time to time), filed under the CorporationsInformation Act shall be included in the notification to the District Manager;

(2) In the event of any change in ownership of the works, the Owner shall notify in writing thesucceeding owner of the existence of this Approval, and a copy of such notice shall be forwarded tothe District Manager. (3) The Owner shall ensure that all communications made pursuant to this condition will refer to thisApproval's number. 3. OPERATIONS MANUAL (1) The Owner shall prepare an operations manual prior to the commencement of operation of thesewage works, that includes, but not necessarily limited to, the following information:

(a) operating procedures for routine operation of the works; (b) inspection programs, including frequency of inspection, for the works and the methods or testsemployed to detect when maintenance is necessary; (c) repair and maintenance programs, including the frequency of repair and maintenance for theworks; (d) contingency plans and procedures for dealing with potential spill, bypasses and any otherabnormal situations and for notifying the District Manager; and (e) complaint procedures for receiving and responding to public complaints.

(2) The Owner shall maintain the operations manual up to date through revisions undertaken from timeto time and retain a copy at the location of the sewage works. Upon request, the Owner shall makethe manual available for inspection and copying by Ministry personnel. (3) The Owner shall prepare, review and update annually an Operation, Maintenance and Surveillance(OMS) Manual for Mining Dams that includes but is not necessarily limited to the following:

(a) tailings deposition plan; (b) water balance and management plan; (c) water quality plan; (d) maintenance plan for mechanical, civil works and electronic devices; (e) contaminant release plan; (f) environmental control and monitoring plan; (g) dam stability monitoring plan; (h) calibration program for key instrumentation; (i) emergency preparedness and response plan; and (j) decommissioning and closure plan, including progressive rehabilitation.

4. EFFLUENT OBJECTIVES

(1) The Owner shall use best efforts to design, construct and operate the works with the objective thatthe concentrations of the materials named below as effluent parameters are not exceeded in theeffluent from the Final Effluent Discharge Point of the Works.

Table 1 - Effluent ObjectivesEffluent Parameter Concentration Objective

(milligrams per litre unless otherwiseindicated)

Total Ammonia Nitrogen (Ammonia plus ammonium)

10.0

(2) As a further effluent objective, the Owner shall use best efforts to maintain the pH of the effluentfrom the works within the range of 6.5 to 8.5, inclusive, at all times. (3) The Owner shall include in all reports submitted in accordance with Condition 10 a summary of theefforts made and results achieved under this Condition. 5. EFFLUENT LIMITS (1) The Owner shall design, construct and operate the works such that the concentrations of thematerials named below as effluent parameters are not exceeded in the effluent from the Final EffluentDischarge Point of the Works.

Table 2 - Effluent LimitsEffluent Parameter Monthly Average Concentration

(milligrams per litre unless otherwiseindicated)

Column 1 Column 2Total Suspended Solids 15Total Phosphorus 1.0Oil and Grease 15.0Copper 0.3Nickel 0.5Lead 0.2Zinc 0.5Cumulative Concentration of Copper,Nickel, Lead and Zinc)

1.0

Arsenic 0.5Cadmium 0.002Mercury 0.001Aluminum 0.5Iron 1.0pH of the effluent maintained between 6.0 to 9.5, inclusive, at all times (2) For the purposes of determining compliance with and enforcing subsection (1):

(a) The Monthly Average Concentration of a parameter named in Column 1 of subsection (1) shallnot exceed the corresponding maximum concentration set out in Column 2 of subsection (1). (b) The pH of the effluent shall be maintained within the limits outlined in subsection (1), at alltimes.

(3) The Owner shall ensure that the discharge of effluent from the Works occurs only during theperiod between 15th March and 30th November of each year with the annual start date conditional onthe commencement of snowmelt, and discharges at other times shall not occur without the writtenapproval of the District Manager. 6. EFFLUENT MONITORING AND RECORDING The Owner shall, upon commencement of operation of the sewage works, carry out the followingmonitoring program: (1) All samples and measurements taken for the purposes of this Approval are to be taken at a timeand in a location characteristic of the quality and quantity of the effluent stream over the time periodbeing monitored. (2) Samples shall be collected and analyzed at the following sampling point(s), at the samplingfrequencies and using the sample type specified for each parameter listed:

Table 3 - Effluent MonitoringFrequency Once each weekSample Type GrabParameters Total Suspended Solids, Total Dissolved

Solids, Hardness, Total Ammonia(Ammonia + Ammonium), TotalPhosphorus, Oil and Grease, Sulphate,pH (field), Conductivity (field),Temperature (field), Aluminum, Arsenic,Cadmium, Copper, Iron, Lead, Mercury,Nickel and Zinc

Frequency Once every two monthsSample Type GrabParameters Acute Toxicity using Rainbow Trout and

Daphnia magna (3) The methods and protocols for sampling, analysis, toxicity testing, and recording shall conform, inorder of precedence, to the methods and protocols specified in the following:

(a) the Ministry's publication "Protocol for the Sampling and Analysis of Industrial/MunicipalWastewater" (August 1994), ISBN 0-7778-1880-9, as amended from time to time by more recentlypublished editions; (b) the publication "Standard Methods for the Examination of Water and Wastewater" (21stedition) as amended from time to time by more recently published editions; and, (c) the Environment Canada publications "Biological Test Method: Reference Method forDetermining Acute Lethality of Effluents to Rainbow Trout" (EPS 1/RM/13 Second Edition -December 2000) and "Biological Test Method: Reference Method for Determining Acute Lethalityof Effluents to Daphnia magna" (EPS 1/RM/14 Second Edition - December 2000), as amendedfrom time to time by more recently published editions; (d) in respect of any parameters not mentioned in (a) - (c), the written approval of the DistrictManager, which approval shall be obtained prior to sampling.

(4) Notwithstanding subsection (2), the Final Effluent Discharge Point from the tailings impoundmentarea shall be monitored for E. coli and fecal coliform on a monthly basis during Discharge Period. (5) The temperature and pH of the effluent from the works shall be determined in the field at the timeof sampling for total ammonia. The concentration of un-ionized ammonia shall be calculated using thetotal ammonia concentration, pH and temperature using the methodology stipulated in "Ontario'sProvincial Water Quality Objectives" dated July 1994, as amended, for ammonia (un-ionized). (6) The measurement frequencies specified in subsection (2) in respect of any parameter are minimumrequirements which may, after twelve (12) months of monitoring in accordance with this Condition, bemodified by the District Manager in writing from time to time. (7) A continuous flow measuring device(s) shall be installed and maintained to measure the flow rateof the effluent from the sewage works, with an accuracy to within plus or minus fifteen (15) per cent ofthe actual flow rate for the entire design range of the flow measuring device and the Owner shallmeasure, record and calculate the flow rate for each effluent stream on each day of sampling. (8) The Owner shall retain for a minimum of five (5) years from the date of their creation, all recordsand information related to or resulting from the monitoring activities required by this Approval. 7. RECEIVER MONITORING AND RECORDING (1) The Owner shall undertake water quality,sediment quality and benthic invertebrate community monitoring at the locations and the frequenciesoutlined in Table 4.

Table 4 - Receiver Monitoring

BaselineStation

Location Water Quality SedimentQuality

BenthicInvertebrateCommunity

1 Camp Lake,near-field lakesite No TMF effluentexposure TMF seepageexposure Camp sewagetreatment planteffluentexposure

Quarterly & Lowlevel mercury

3 years 3 years

2 Second Pond,near-field pondsite High TMFeffluent andseepageexposure


N/A N/A

2C SS Pond, near-field pond site High TMFeffluent andseepage

Quarterly 3 years 3 years

exposure3 Hasson Lake,

near-field lakesite High TMFeffluent andseepageexposure


3 years 3 years

4 Unnamed lakedownstream ofHasson Lake,near-field lakesite


5 Creekdownstream ofHasson Lake,integrative near-field creek site

Annually 3 years 3 years

6 Unnamed lake,far-field lake site

Annual (fieldand physicalparameters)

3 years 3 years

7X Lac des Iles,upstream control

N/A 3 years 3 years

7E Lac des Iles,integrative near-field lake site Rock pile runoff,TMF seepageexposure


7C Lac des Iles,upstream control

Quarterly N/A N/A

7 River des Iles,far-field creeksite Upstream ofconfluence withCamp Creeksystem

Annually N/A N/A

8 River des Iles,far-field creeksite Downstream ofconfluence withCamp Creeksystem

Annually N/A N/A

Variable Warmwater lakecontrol station


Variable Warmwaterstream controlstation


N/A denotes not applicable

(2) The water quality and sediment samples collected pursuant to subsection (1) shall be analyzed forthe parameters outlined in Table 5.

Table 5 - Water Quality and Sediment Analysis Parameters

Group ParametersConventional Parameters pH, conductivity, TDS, TSS, turbidity,

DOC, TOC, COD, DIC, colourNutrients Nitrate, Nitrite, Total ammonia nitrogen,

TKN, Total phosphorus, Solublephosphorus

Water Chemistry-Dissolved Anions Alkalinity/acidity, Sodium, Sulphate,Fluoride, Chloride

Water Chemistry-Total PetroleumHydrocarbons

for Stations 1 and 7E only. This parameterhas been added at near-field Stationsdownstream of potential contaminationsources to determine if contaminants aremigrating and if on-site Zones ofAttenuation are adequate. Potentialsources of contamination are outlined inthe Closure Plan.

Total Metals Aluminum, Antimony, Arsenic, Barium,Beryllium, Bismuth, Boron, Cadmium,Calcium, Chromium, Cobalt, Copper, Iron,Lead, Magnesium, Manganese, Mercury,Molybdenum, Nickel, Potassium,Selenium, Silicon, Silver, Tellurium,Titanium, Uranium, Vanadium, Zinc

Field and Physical Parameters pH, conductivity, dissolved oxygen

(3) The methods and protocols for sampling, analysis, toxicity testing, and recording shall conform, inorder of precedence, to the methods and protocols specified in the following:

(a) the Ministry's publication "Protocol for the Sampling and Analysis of Industrial/MunicipalWastewater" (August 1994), ISBN 0-7778-1880-9, as amended from time to time by more recentlypublished editions; (b) the publication "Standard Methods for the Examination of Water and Wastewater" (21stedition) as amended from time to time by more recently published editions; and (c) with respect of the parameters monitored in the water at receiving stations, all parameters forwhich the Ministry has an established Provincial Water Quality Objective in Table 1 of the Ministrypublication, Water Management - Goals, Policies, Objectives and Implementation Procedures ofthe Ministry of the Environment (July 1994 reprinted February 1999), as amended from time totime, the analytical method detection limit for each parameter shall be less than the aforesaidProvincial Water Quality Objective for the parameter sampled.

(4) The Owner shall undertake fisheries monitoring as part of the environment effects monitoringpursuant to Environment Canada’s metal mining effluent regulations. (5) The Owner shall retain for a minimum of five (5) years from the date of their creation, all recordsand information related to or resulting from the monitoring activities required by this condition.

8. GROUNDWATER MONITORING AND RECORDING The Owner shall carry out the following monitoring program: (1) All samples and measurements taken for the purposes of this Approval are to be taken at a timeand in a location characteristic of the quality and quantity of the groundwater over the time periodbeing monitored. (2) Groundwater grab samples shall be collected from groundwater monitoring locations specifiedbelow which are scheduled to be installed in stages by the end of 2017:

Table 6 - Groundwater Monitoring Locations* NOTE 1

Well Location Well LocationMW-00-02 (deep)

Down-gradient ofSouth Waste RockPile and RegularGrade OreStockpile.

MW15-10A, B(shallow and deep)

Down-gradient ofSouth TMF and

Dam S2.

MW-00-06 (shallow) Down-gradient ofSouth Waste RockPile and RegularGrade OreStockpile.

MW-00-07 (shallow) Down-gradient ofWater ManagementFacility #2, EastReclaim Cell, and

South Dam.MW15-01A, B

(shallow and deep)Down-gradient ofSouth TMF andDam S1.

MW15-11 (deep) Same location as MW-00-07.


Down-gradient ofWater ManagementFacility #1.


Un-impactedbackground

monitoring location.MW15-04A, B

(shallow and deep)Down-gradient ofCell 2 and Dam 2(north).


Immediately down-gradient of CP4 inbedrock valley.


Down-gradient ofWater ManagementFacility #2.


Further down-gradient of CP4 inbedrock valley.


Down-gradient ofEast Waste RockPile.


Down-gradient ofCell 3 and Dam 3(south) (betweenCell 3 and Camp

Lake).MW15-09A, B

(shallow and deep)Down-gradient ofWater ManagementFacility #1


Down-gradient ofCell 3 and Dam 6

(nearDecommissionedSpillway and CP2).

*NOTE 1: Groundwater monitoring locations as outlined in Figure 1:- Monitoring Well Locations - Lacdes Iles Mine, Environmental Compliance Approval Application dated March 2015. The above-listedwell numbers and locations are approximate and final well locations and numbers must be approvedby the District Manager.

(3) The groundwater monitoring program shall include the following:

(a) The Owner shall conduct groundwater level monitoring and groundwater quality sampling of allon-site and background monitoring wells three (3) times annually (spring freshet, summer, and fall,with a minimum of 60 days between monitoring events), to determine the groundwater elevationsand flow directions across the site, and the groundwater quality adjacent to and down-gradient ofthe tailings management facilities, water containment and treatment ponds, waste rock and orestockpiles;

(b) Water sampled from the groundwater monitoring wells shall be analysed for the followingfield and lab parameters:

Table 7 - Groundwater MonitoringParameter Parameter Field Parameter

pH Nitrate pHConductivity (uS/cm) Nitrite TemperatureHardness Total Phosphorus Conductivity (uS/cm)Total Alkalinity (asCaCO3)

Dissolved Phosphorus Total Dissolved Solids

Acidity SulphateDissolved Organic Carbon(DOC)

Total Ammonia

Total Dissolved Solids(TDS)

Phenols

Total Suspended Solids(TSS)

Turbidity

Chloride Dissolved Metals(including Mercury)

Fluoride(c) Groundwater analytical results shall be compared with the MOECC Provincial Water QualityObjectives (PWQO), and the Reasonable Use Criteria based on potable groundwater conditions(Guideline B-7, and Procedure B-7-1).

(4) Within thirty (30) days of issuance of this Approval, the proponent shall submit to the DistrictManager, a sampling protocol which specifies sampling methodologies, field measurements andquality assurance and quality control (QA/QC) measures to be undertaken in the groundwatermonitoring program.(5) Following one (1) year of groundwater monitoring and sampling at the site, the Owner shall submitto the District Manager for approval a Contingency Plan based on the results of the groundwatermonitoring program. The Contingency Plan shall include: criteria for assessment of the groundwatermonitoring data with respect to MOECC Guideline B-7 and Procedure B-7-1; clearly definedcontingency measures; and trigger mechanisms for implementation of the contingency measureswhich are tied to the groundwater monitoring program.

(6) The Owner shall submit to the District Manager a groundwater monitoring report, with the firstreport due January 31st of the year following the first year of sampling. The monitoring report isintended as a stand-alone document, and as a minimum must contain the following information:

(a) A scale site plan or plans of the entire site illustrating significant site features such as minefacilities, lakes, streams, seeps, ponds, ditches, collection and treatment facilities, and roadways,as well as all of the sampling locations.

(b) A scale location map illustrating the site relative to nearby potentially sensitivegroundwater/surface water features (lakes, streams, wells, etc.).

(c) Seasonal groundwater elevation contour maps.

(d) Stratigraphic cross-sections which clearly illustrate the subsurface distribution of geologicalmaterials.

(e) Borehole logs for all monitoring wells.

(f) Tables illustrating historical water chemistry and water level data.

(g) Graphs illustrating historical water quality trends with time for the key analytical parameters.

(h) An assessment of monitoring data to evaluate the impact on receiving water bodies andoffsite groundwater.

(i) Assessment of the monitoring criteria with respect to the trigger mechanisms identified in theContingency Plan, and discussion related to requirements for contingency measures to beimplemented.

(j) A summary of the annual monitoring program in table format.

(k) Recommendations for future monitoring and/or remedial actions.

(l) A section detailing the field sampling protocols and QA/QC measures.

(m) Electronic copies of Laboratory Certificates of Analysis.

(7) Amendments to the groundwater monitoring and reporting program shall be made upon receipt ofwritten request from the proponent, or in response to recommendations from MOECC Northern RegionTechnical Support with the written approval of the District Manager.(8) The methods and protocols for sampling, analysis, toxicity testing, and recording shall conform, inorder of precedence, to the methods and protocols specified in the following:

(a) the Ministry's publication "Protocol for the Sampling and Analysis of Industrial/MunicipalWastewater" (August 1994), ISBN 0-7778-1880-9, as amended from time to time by more recentlypublished editions; and

(b) the publication "Standard Methods for the Examination of Water and Wastewater" (21stedition) as amended from time to time by more recently published editions.

9. LIMITED OPERATIONAL FLEXIBILITY (1) The Owner may make Modifications to the Works in accordance with the terms and conditions ofthis Approval and subject to the Ministry’s “Limited Operational Flexibility Criteria for Modifications toSewage Works ”, included under Schedule B of this Approval. (2) Sewage works under Limited Operational Flexibility shall adhere to the design guidelinescontained within the Ministry’s publication “Design Guidelines for Sewage Works 2008”, as amended. (3) The Owner shall ensure at all times, the Works and related equipment and appurtenances whichare installed or used to achieve compliance are operated in accordance with all terms and conditions

of this Approval. (4) For greater certainty, the following are not permitted as part of Limited Operational Flexibility:

(a) Modifications to the Works that result in an increase of the Rated Capacity of the Works; (b) Modifications to the Works that adversely affect the approved effluent quality criteria or thelocation of the discharge/outfall; (c) Modifications to the Works approved under s.9 of the EPA, and (d) Modifications to the Works pursuant to an order issued by the Ministry.

(5) Implementation of Limited Operational Flexibility is not intended to be used for piecemealmeasures that result in major alterations or expansions. (6) If the implementation of Limited Operational Flexibility requires changes to be made to theEmergency Response, Spill Reporting and Contingency Plan, the Owner shall provide a revised copyof this plan for approval to the local fire services authority prior to implementing Limited OperationalFlexibility. (7) For greater certainty, any alteration made under the Limited Operational Flexibility may only becarried out after other legal obligations have been complied with including those arising from theEnvironmental Protection Act, Niagara Escarpment Planning and Development Act, Oak RidgesMoraine Conservation Act, Lake Simcoe Protection Act and Greenbelt Act. (8) At least thirty (30) days prior to implementing Limited Operational Flexibility, the Owner shallcomplete a Notice of Modifications describing any proposed Modifications to the Works and submit itto the District Manager. (9) The Owner shall not proceed with implementation of Limited Operational Flexibility, until aminimum of thirty (30) days after the day the District Manager has acknowledged receipt of the Noticeof Modifications in writing or after receiving a written acceptance from the District Manager. 10. REPORTING (1) Activity reports shall be submitted to the District Manager each month, 30 days following the periodbeing reported upon. The activity report shall contain a summary and interpretation of all analyticaldata collected relative to the sewage works facility during the period reported upon.

(2) The Owner shall report to the District Manager or designate, any exceedance of any parameterspecified in Condition 5 orally, as soon as reasonably possible, and in writing within seven (7) days ofthe exceedance. (3) In addition to the obligations under Part X of the Environmental Protection Act, the Owner shall,within ten (10) working days of the occurrence of any reportable spill as defined on Ontario Regulation675/98, bypass or loss of any product, by-product, intermediate product, oil, solvent, waste material orany other polluting substance into the environment, submit a full written report of the occurrence to theDistrict Manager describing the cause and discovery of the spill or loss, clean-up and recoverymeasures taken, preventative measures to be taken and schedule of implementation. (4) The Owner shall prepare and submit on or before July 31 a performance report to the District

Manager on an annual basis covering the preceding twelve months period ending March 31. The firstsuch report shall cover the first annual period following the commencement of operation of the Worksand subsequent reports shall be submitted to cover successive annual periods following thereafter. The reports shall contain, but shall not be limited to, the following information:

(a) a summary and interpretation of all monitoring data and a comparison to the effluent limitsoutlined in Condition 5, including an overview of the success and adequacy of the sewage works; (b) a comprehensive report outlining the results, and interpretation of the effluent concentrations,receiving water and groundwater concentrations and biological monitoring performed during thereporting period, pursuant to Conditions 6, 7 and 8; (c) a tabulation of the weight of tailings discharged to the tailings area during the reporting period,and the cumulative weight of tailings deposited since the start of operation of the sewage works,and the estimated remaining life of the tailings impoundment areas; (d) a tabulation of the total volume of effluent discharged from the sewage works during thereporting period; (e) an outline of any proposed sewage treatment measures to be completed over the nextreporting period; (f) an evaluation for the need for modifications to the sewage treatment facility to minimize thenumber of upsets, or anticipated non-compliant discharges, if any, and (g) a summary of the calibration and maintenance carried out on all effluent monitoringequipment; (h) a description of any operating problems encountered and corrective actions taken; (i) a summary of all maintenance carried out on any major structure, equipment, apparatus,mechanism or thing forming part of the sewage works; (j) a summary of any effluent quality assurance or control measures undertaken in the reportingperiod; (k) a description of efforts made and results achieved in meeting the Effluent Objectives ofCondition 4; and (l) a copy of all Notice of Modifications submitted to the District Manager, with a status report onthe implementation of Limited Operational Flexibility.

11. OPERATION DURING POWER FAILURE

In the event of a power failure, the tailings disposal pipeline carrying tailings from the mill to thetailings areas must be flushed with clear water to the tailings area, following which clear water onlycan be drained from points along the line, as required to prevent freezing or settling.

12. ARCHAEOLOGICAL AND HERITAGE SITES.

The Owner shall not commence construction of the Proposed Works or allow its commencementuntil the Owner has verified to the satisfaction of the District Manager, that there are noarchaeological or heritage sites on the lands to be occupied by the sewage works or the open pitmine, and the District Manager has confirmed in writing his approval.

13. DAM INSPECTION AND REPORTING

(1) The Owner shall perform an engineering inspection of the Mining Dams associated with theWorks as defined in and following the best management practices as per the Canadian DamAssociation’s (CDA) Dam Safety Guidelines (2007, revised 2013, as amended from time to time),and the 2014 CDA Technical Bulletin: Application of Dam Safety Guidelines to Mining Dams (asamended from time to time). (2) Based upon the engineering inspection of the Mining Dams, the Owner shall prepare a DamSafety Inspection (DSI) report. The DSI as well as the preparation of the DSI report shall beundertaken by a Professional Engineer licensed in Ontario. (3) The Owner shall include, at a minimum, the following information in the DSI report:

(a) a detailed description of all components of the Mining Dams including the size, volume andelevations of all ponds, location(s) of the discharge points, spillways, and any existinggeotechnical instrumentation; (b) review comments of the previous DSI report and its recommendations, if any, including:

i. condition of dams compared to previous DSI reports; ii. description of any significant change noted from the previous DSI report, e.g. dammodifications of the approved dam operation levels; iii. any concerns from previous DSI and comments if previous concerns have not been fullyaddressed.

(c) for operating containment areas, dam crest elevation and operating levels / elevations of thecontainment dam in comparison with the approved tailings management plan and/or watermanagement plan; (d) for inactive containment areas, comment on current pond and dam crest elevation relative tothe design criteria; (e) the results of the visual inspection of the dams including representative photographs; (f) location and estimated amounts of seepage from the dams, if any, and highlighting ofanomalies that need to be corrected; (g) review and comments on the water balance with respect to potential dam safety concerns; (h) assessment of dam spillways as well as overflows, if the facility was designed to overflow; (i) summary and interpretation of any regular inspections and instrumentation monitoringconducted from the previous DSI to-date. (j) based on the results of the DSI, the Professional Engineer shall provide recommendations for:

1. maintenance, repairs, investigation or further monitoring; 2. the frequency of future inspections considering the best management practices of the CDA,including:

· an opinion on the continued use of the Works for tailings deposition and/or identifying anymodification necessary for continued use; · an opinion on the need to re-evaluate the Dam Classification for the dam, based on changesto the dam (e.g. progressing to closure phase), its contents or downstream developments,which may affect frequency of inspections; · timing and scope of work for the next Dam Safety Review (DSR) as described by the CDAguidelines.

(k) an implementation plan for each of the actions and recommendations of the DSI.

(4) The Owner shall undertake the DSI at least once per year during snow free conditions.Additional inspections may be required per recommendations of the inspecting engineer persubsection 3(j)2. Any reduction to the annual DSI frequency shall require a request to be made inwriting for approval by the Director. (5) The Owner shall implement remedial actions recommended in the DSI as soon as reasonablypossible and upon notification to the District Manager following the protocols of Schedule B of thisApproval. (6) At a minimum, every five (5) years, the DSI shall be performed by an independent qualified thirdparty Professional Engineer licensed in Ontario, who has not been associated with the Owner ortailings and water management dams’ design/expansion. (7) The District Manager can request in writing that the Owner complete a DSI at any time, if theDistrict Manager is of the opinion that circumstances warrant its completion. (8) The Owner shall submit the DSI report to the District Manager and to the Regional EngineeringSupervisor of the Ministry of Natural Resources and Forestry, electronically and hard copy, withinninety (90) days of the completion of the engineering inspection. (9) For the years that involve preparation of a Dam Safety Review (DSR) in accordance with CDAGuidelines and the CDA Technical Bulletin, the DSR shall replace the DSI, and the Owner shallsubmit the DSR report to the District Manager and to the Regional Engineering Supervisor of theMinistry of Natural Resources and Forestry, electronically and hard copy, within ninety (90) days ofthe completion of the review.

Schedule ‘A’ I. PREVIOUS WORKS APPROVED ON OR BEFORE APRIL 22, 2008:

1. Application for Approval of Industrial Sewage Works submitted by Rosanno Catalan of Lac desIles Mines Ltd. dated February 6, 2008 and attachments; 2. Geotechnical Design, South Tailings Management facility, Lac Des Iles Mine, Lac Des Iles,Ontario , prepared by Thunder Bay Testing and Engineering, dated December 14, 2007;

3. Electronic mail and attachments dated March 13, 2008 and March 26, 2008 from RosannoCatalan of Lac Des Iles Mine to Randy Chin of the Ministry of the Environment; 4. Application for Approval of Industrial Sewage Works dated June 4, 2001 and signed by DarrylBoyd, Environmental Coordinator, Lac des Iles Mines Ltd. and all supporting information; 5. Application for Approval of Industrial Sewage Works dated March 30, 2000 and signed byDarryl Boyd, Environmental Coordinator, Lac Des Iles Mines Ltd. and supporting information; 6. Application for Approval of Industrial Sewage Works dated April 25, 2000 and signed by DarrylBoyd, Environmental Coordinator, Lac Des Iles Mines Ltd., and all supporting information; 7. A letter dated May 29, 2000 from Darryl Boyd, Environmental Coordinator, Lac Des Iles MinesLtd. to the Ministry of the Environment with a revised drawing #422; and 8. A letter dated June 14, 2000 from Darryl Boyd, Environmental Coordinator, Lac Des Iles MinesLtd. to the Ministry of the Environment with Sitka Corp. drawing #432.

II. PREVIOUS WORKS APPROVED ON DECEMBER 1, 2009 UNDER ECA No. 2018-7X4HML :

1. Application for Approval of Industrial Sewage Works submitted by Lac Des Iles Mines Ltd.dated September 8, 2009 and design specifications and drawings prepared by Blue HeronSolutions for Environmental Management Inc., Timmins, Ontario.

III. PROPOSED WORKS:

1. Application for Environmental Compliance Approval submitted by North AmericanPalladium Limited dated March 26, 2015 and design brief and drawings prepared by DSTConsulting Engineers Inc., Thunder Bay, Ontario, received on March 30, 2015.

2. Revised application for Environmental Compliance Approval submitted by North AmericanPalladium Limited dated March 26, 2015 and design brief a drawings prepared by DSTConsulting Engineers Inc., Thunder Bay, Ontario, received on October 29, 2015.

3. Memorandum from Shannon Heggie, Regional Hydrogeologist, Technical SupportSection, Thunder Bay Northern Region, dated October 9, 2015, providing reviewcomments and recommendations on the proposed revised groundwater monitoringprogram.

Schedule ‘B’ Limited Operational Flexibility Criteria for Modifications to Sewage Works The Modifications to sewage works approved under an Environmental Compliance Approval (ECA)that are permitted under the Limited Operational Flexibility (LOF), are outlined below and are subjectto the LOF conditions in the ECA. For clarity proposes, Modifications of equipment does not includeprocess equipment where treatment unit operations occur, including but not limited to: screens, gritseparators, blowers, oxygen diffusers, sludge thickeners and dewatering equipment, UV systems,chlorine contact tanks, bio-disks, digester gas handling systems, and process reactors. Modifications of sewage works that are exempt from section 53 of the OWRA by O. Reg. 525/98

continue to be exempt and are not required to follow the notification process under this LimitedOperational Flexibility. If there is a conflict between the list of sewage works listed below and theconditions in the ECA, the conditions in the ECA shall take precedence. The following sewage works are permitted under Limited Operational Flexibility, and as per theconditions in the Approval: 1.0 Sewage Pumping Stations

1.1 Alter pumping capacity by adding or replacing equipment where new equipment is locatedwithin an existing sewage treatment plant site or an existing sewage pumping station site, wherethe facility rated capacity is not exceeded and while maintaining the existing flow process and/ortreatment train, if applicable. 1.2 Replacing existing minor equipment with Equivalent equipment of different make and model,provided that there are no treatment process changes as a result of the replacement.

2.0 Inlet Works

2.1 Replacing existing minor equipment with Equivalent equipment of different make and model.

3.0 Sewage Treatment Process

3.1 Install or replace instrumentation or chemical dosage equipment for operational ormaintenance purposes including replacing chemicals for pH adjustment or coagulants (non-toxicpolymers) provided that there are no Modifications of treatment processes or other Modificationsthat may alter the intent of operations and may have negative impacts on Works' effluent quantityand quality. 3.2 Expansion of buffer zone between a sanitary sewage lagoon facility or land treatment area andadjacent uses where the buffer zone is entirely on the proponent’s land. 3.3 Optimize existing sanitary sewage lagoons with the purpose to increase efficiency of treatmentoperations provided that existing sewage treatment plant rated capacity is not exceeded andwhere no land acquisition is required. 3.4 Replacing existing minor equipment with Equivalent equipment of different make and model,provided that there are no treatment process changes as a result of the replacement.

4.0 Sewage Treatment Process Outfall

4.1 Replacement of discharge pipe with similar pipe size provided that the outfall location is notchanged.

5.0 Sanitary Sewers

5.1 Pipe relining and replacement with similar pipe size to the approved site location’s existingsanitary sewers and forcemains sewage collection system. The sewer main Modifications shallnot include combined sewers . 5.2 Modifications and installation of new sanitary gravity sewers and forcemains, except those witha nominal diameter greater than 1,200mm, and provided that the Modification does not includecombined sewers .

6.0 Tailing Management Facilities

6.1 Routine dam raises to allow continued management of tailings and storage of mineralmaterials and sewage, provided that:

a) Routine dam raises are in adherence to an approved tailings management plan. b) Routine dam raises are signed and stamped by a Professional Engineer licensed under theProfessional Engineers Act in Ontario. c) Routine dam raises have an Erosion and Sediment Control Plan applying bestmanagement practices. d) Routine dam raises are designed in compliance with the Lakes and Rivers ImprovementAct.

6.2 Routine dam extension, including increasing the length of the dam to an approved tailingsmanagement plan. 6.3 New Dams are not eligible under LOF

7.0 Pilot Systems

7.1 Installation of pilot systems for new or existing technologies provided that:

a) any effluent from the pilot system is discharged to the inlet of the main sewage treatmentplant or hauled off-site for proper disposal, b) any effluent from the pilot system discharged to the inlet of the main sewage treatmentplant does not significantly alter the composition/concentration of the influent sewage to betreated in the downstream process; and that it does not add any inhibiting substances to thedownstream process, and c) the pilot system’s duration be of up to a maximum of two years ; and a report with results issubmitted to the Director and District Manager three months after completion of the pilotproject.

Notice of Modifications Dec-2013.pdf

The reasons for the imposition of these terms and conditions are as follows:

1. Condition 1 is imposed to ensure that the Works are built and operated in the manner in which theywere described for review and upon which approval was granted. This condition is also included toemphasize the precedence of Conditions in the Approval and the practice that the Approval is basedon the most current document, if several conflicting documents are submitted for review. 2. Condition 2 is included to ensure that the Ministry records are kept accurate and current withrespect to approved works and to ensure that subsequent Owners of the works are made aware of theApproval and continue to operate the works in compliance with it. 3. Condition 3 is included to ensure that a comprehensive operations manual governing all significantareas of operation, maintenance and repair is prepared, implemented and kept up-to-date by theOwner and made available to the Ministry. Such a manual is an integral part of the operation of theworks. Its compilation and use should assist the owner in staff training, in proper plant operation and inidentifying and planning for contingencies during possible abnormal conditions. The manual will alsoact as a benchmark for Ministry staff when reviewing the owner's operation of the works. 4. Condition 4 is imposed to establish non-enforceable effluent quality objectives which the Owner isobligated to use best efforts to strive towards on an ongoing basis. These objectives are to be used asa mechanism to trigger corrective action proactively and voluntarily before environmental impairmentoccurs and before the compliance limits of Condition 5 are exceeded. 5. Conditions 5 and 6 are imposed to ensure that the effluent discharged from the Works to theHasson Lake meets the Ministry's effluent quality requirements thus minimizing environmental impacton the receiver. 6. Conditions 6, 7, and 8 are included to require the Owner to demonstrate on a continual basis thatthe quality and quantity of the effluent from the approved Works is consistent with the designobjectives and effluent limits specified in the Approval and that the approved works does not causeany impairment to the receiving watercourse. 7. Condition 9 is included to ensure that the Works are operated in accordance with the applicationand supporting documentation submitted by the Owner, and not in a manner which the Director hasnot been asked to consider. These conditions are also included to ensure that a Professional Engineerhas reviewed the proposed Modifications and attests that the Modifications are in line with that ofLimited Operational Flexibility, and provide assurance that the proposed Modifications comply with theMinistry's requirements stipulated in the terms and conditions of this Approval, MOECC policies,guidelines, and industry engineering standards and best management practices. 8. Condition 10 is included to provide a performance record for future references and to ensure thatthe Ministry is made aware of problems as they arise, so that the Ministry can work with the Owner inresolving the problems in a timely manner. 9. Condition 11 is included to prevent the blockage or perforation of the tailings pipeline in the event ofa power failure, and to ensure that only clear water is drained at any dump points along the line duringa power failure. 10. Condition 12 is included to prevent building on or otherwise altering existing heritage orarchaeological sites, if they exist. 11. Condition 13 is included to ensure that regular inspections, maintenance and reporting on thedams is undertaken to ensure the environment is protected as well as the integrity of the sewageworks, and to identify problems so that they may be corrected in a timely manner.

Upon issuance of the environmental compliance approval, I hereby revoke ApprovalNo(s). 2018-7X4HML issued on December 1, 2009

In accordance with Section 139 of the Environmental Protection Act, you may by written Notice servedupon me, the Environmental Review Tribunal and in accordance with Section 47 of the EnvironmentalBill of Rights, 1993 , S.O. 1993, c. 28 (Environmental Bill of Rights), the Environmental Commissioner,within 15 days after receipt of this Notice, require a hearing by the Tribunal. The EnvironmentalCommissioner will place notice of your appeal on the Environmental Registry. Section 142 of theEnvironmental Protection Act provides that the Notice requiring the hearing shall state: 1. The portions of the environmental compliance approval or each term or condition in theenvironmental compliance approval in respect of which the hearing is required, and; 2. The grounds on which you intend to rely at the hearing in relation to each portion appealed. Pursuant to subsection 139(3) of the Environmental Protection Act, a hearing may not be required withrespect to any terms and conditions in this environmental compliance approval, if the terms andconditions are substantially the same as those contained in an approval that is amended or revoked bythis environmental compliance approval. The Notice should also include: 3. The name of the appellant; 4. The address of the appellant; 5. The environmental compliance approval number; 6. The date of the environmental compliance approval; 7. The name of the Director, and; 8. The municipality or municipalities within which the project is to be engaged in. And the Notice should be signed and dated by the appellant. This Notice must be served upon:

The Secretary* Environmental ReviewTribunal 655 Bay Street, Suite1500 Toronto, Ontario M5G 1E5

AND

The EnvironmentalCommissioner 1075 Bay Street, Suite605 Toronto, Ontario M5S 2B1

AND

The Director appointed for thepurposes of Part II.1 of theEnvironmental Protection Act Ministry of the Environment andClimate Change 135 St. Clair Avenue West, 1stFloor Toronto, Ontario M4V 1P5

* Further information on the Environmental Review Tribunal’s requirements for an appeal canbe obtained directly from the Tribunal at: Tel: (416) 212-6349, Fax: (416) 326-5370 orwww.ert.gov.on.ca This instrument is subject to Section 38 of the Environmental Bill of Rights, 1993, that allows residentsof Ontario to seek leave to appeal the decision on this instrument. Residents of Ontario may seekleave to appeal within 15 days from the date this decision is placed on the Environmental Registry. Byaccessing the Environmental Registry at www.ebr.gov.on.ca , you can determine when the leave toappeal period ends.

The above noted activity is approved under s.20.3 of Part II.1 of the Environmental Protection Act.

DATED AT TORONTO this 26th day of February,2016

Fariha Pannu, P.Eng. Director appointed for the purposes of Part II.1 ofthe Environmental Protection Act

SH/ c: District Manager, MOECC Thunder Bay - District Laura Ritchie, P.Geo., and Sushil Tyagi, DST Consulting Engineers Inc.

ministry of the environment and climate change ministère ... · thunder bay, ontario p7b 6t9 site...

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