WAMBO COAL PTY LIMITED

ENVIRONMENTAL ASSESSMENT

MONTROSE EAST UNDERGROUND MINE MODIFICATION

WAMBO

APPENDIX B

GROUNDWATER REVIEW

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Date: To: From: Re:

9 March 2011 Mr Lachlan Crawford Senior Environment Advisor Wambo Coal Pty Ltd PMB 1 Singleton, NSW 2330 Dr Noel Merrick Montrose East Underground Mine Modification Groundwater Review

H E R I T A G E C O M P U T I N G

Pty Ltd ABN 75 392 967 126

143-153 Singles Ridge Road,

Winmalee. N.S.W. 2777 Phone (+61 2) 47541259

Fax (+61 2) 47545259 nmerrick@aapt.net.au

noel.merrick@gmail.com

Dear Lachlan, Please find below our assessment of the potential groundwater impacts of the proposed modification to mining at Wambo. Introduction Wambo is owned by Wambo Coal Pty Ltd (WCPL) and is situated approximately 15 kilometres (km) west of Singleton, near the village of Warkworth, New South Wales (NSW). A range of open cut and underground mine operations has been conducted at Wambo since mining operations commenced in 1969. Mining operations under Development Consent DA 305-7-2003 commenced in 2004 and currently both open cut and underground mining operations are conducted at Wambo. WCPL is seeking approval for a modification to the Wambo Development Consent DA 305-7-2003 under Section 75W of the NSW Environmental Planning and Assessment Act, 1979. The proposed extension to Wambo is referred to as the Montrose East Underground Mine Modification (the Modification). The potential groundwater impacts from the Modification are considered in this report. Currently Approved Mining Operations A range of open cut and underground mine operations has been conducted at Wambo since mining operations commenced in 1969. Currently approved open cut mining operations at Wambo extract coal from the Whybrow, Redbank Creek, Wambo and Whynot Seams. The extent of the currently approved open cut limit is shown on Figure 1. Underground mining at Wambo is currently approved in Whybrow, Wambo, Arrowfield and Bowfield seams. The locations of the approved underground mines are shown on Figure 1. Development of the North Wambo Underground Mine commenced in 2005 and production (using longwall mining methods) commenced in 2007 (WCPL, 2008a). Mining has not commenced in the Whybrow Underground Mine, Arrowfield Underground Mine, or the Bowfield Underground Mine (Figure 1).

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Montrose East Underground Mine Modification The Modification would include the development of the Montrose East Underground Mine. The Montrose East Underground Mine would comprise three longwall panels in the Whybrow Seam and would be accessed directly from the approved open cut highwall. Gate roads (main gate roads and tail gate) would be driven south-west from the approved open cut highwall to allow for the extraction of coal from the Whybrow seam along three longwall panels. The gate roads would extend beneath the North Wambo Creek Diversion and would leave a series of pillars of coal to support the overlying strata (i.e. would be non-subsiding). The north-eastern ends of the longwall panels would finish at positions determined by a 26.5 degree angle of draw between the Whybrow seam and the existing North Wambo Creek Diversion. The longwall panels would be approximately 240 metres (m) wide and vary in length between approximately 1.7 and 2.2 km. The Modification would include a minor reduction (approximately 50 hectares [ha]) in the currently approved open cut limit to allow for the protection of the North Wambo Creek Diversion. Figure 2 shows the modified open cut limit and the planned extent of the underground development. Hydrogeological Environment Topography The topography at Wambo and surrounds consists of low lying, gently undulating hills and alluvial flats associated with the perennial Wollombi Brook and its ephemeral tributaries North Wambo Creek, Wambo Creek, Stony Creek and Redbank Creek (Figure 1). Surface elevations range from approximately 60 m Australian Height Datum (AHD) on the alluvial flood plains to approximately 650 m AHD at Mt Wambo on the sandstone escarpment in the Wollemi National Park to the south-west of Wambo. Geology Wambo is situated within the Hunter Coalfield subdivision of the Sydney Basin, which forms the southern part of the Sydney-Gunnedah-Bowen Basin. The stratigraphy in the Wambo area comprises the Triassic Narrabeen Group, Permian coal measures and more recent (Quaternary) alluvial deposits associated with major drainage pathways. The stratigraphy of the Wambo area and targeted coal seams at Wambo are shown on Figure 3. Triassic Narrabeen Group Massive sandstones of the Triassic Narrabeen Group form prominent escarpments on elevated areas to the south-west of Wambo. The Triassic Narrabeen Group unconformably overlies the Permian coal measures (Figure 3). Permian Coal Measures The Permian coal measures contain numerous coal seams (Figure 3) and associated splits separated by interburden comprising interbedded sandstones and laminated mudstones/siltstones. The coal seams are within the Wollombi and Wittingham Coal Measures (Figure 3) which subcrop in Wambo and surrounds. The Permian coal measures generally dip at approximately 3º to the south-west with structure complicated by local variations in seam dip and direction. Quaternary Alluvium The Quaternary alluvial deposits overlie the Triassic or Permian erosion surfaces unconformably and are associated with the major drainages (i.e. Wollombi Brook, North Wambo Creek, Wambo Creek and Stony Creek). The alluvium typically has a coarse cobble-gravel basal section up to several metres thick that overlies bedrock. The basal section is in turn overlain by silty gravels and sands with frequent inter-bedded silt and clay zones to surface. This in turn is overlain by finer grained sandy clays and silts.

SUPERGROUP GROUP SUBGROUP FORMATION SEAM

NARRABEEN GROUP (TRIASSIC) WIDDEN BROOK CONGLOMERATE

Greigs Creek Coal

Redmanvale Creek FormationGLEN GALLICSUBGROUP

Dights Creek Coal

Waterfall Gully FormationDOYLES CREEKSUBGROUP Pinegrove Formation

Lucernia Coal

Strathmore Formation

Alcheringa Coal

HORSESHOECREEK SUBGROUP

Clifford Formation

Charlton FormationAPPLETREE FLATSUBGROUP Abbey Green Coal

WOLLOMBI COAL

MEASURES (PERMIAN)

WATTS SANDSTONE

DENMAN FORMATION

Mount LeonardFormation

Whybrow Seam 1,2

Althorpe Formation

Redbank Creek Seam 1,2

Wambo Seam 1,2

Whynot Seam 1,2Malabar Formation

Blakefield Seam

Glen Munro SeamMount OgilvieFormation Woodlands Hill Seam

Milbrodale Formation

Arrowfield Seam 2

Bowfield Seam 2Mount Thorley

Formation

Warkworth Seam3

Fairford Formation

Mount Arthur Seam

Piercefield Seam

Vaux Seam

Broonie Seam

JERRYS PLAINSSUBGROUP

BurnamwoodFormation

Bayswater Seam

ARCHERFIELD SANDSTONE

Bulga Formation

Foybrook Formation

SINGLETONSUPERGROUP

WITTINGHAM COAL

MEASURES (PERMIAN)

VANE SUBGROUP

Saltwater Creek Formation

Source: DMR (1993)

Coal reserves currently/previously mined at the Wambo.Coal reserves to be minedCoal reserves to be mined the upper three plies of theWarkworth Seam combine with the two plies of the Bowfield Seam.

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2

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at the Wamboat the Wambo

ALLUVIUM (QUATERNARY)

Stratigraphy of the Wambo AreaFIGURE 3

WAM-09-15 MEUMM_App GW_001D

MONTROSE EAST UNDERGROUND MINE MODIFICATION

WAMBO COAL PTY LIMITED

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A geophysical investigation of the alluvium along North Wambo Creek in the vicinity of the proposed Montrose East Underground Mine was undertaken by GHD (2007). Two methods were employed: (1) multi-frequency electromagnetics, which is capable of distinguishing between sandy sediments, clayey materials and hard rock; and (2) seismic refraction, which is capable of accurate depth to bedrock determinations. The resulting mapping is shown on Figure 4. The alluvium within the floodplain associated with North Wambo Creek merges gradually at the margins with colluvium and unconsolidated weathered bedrock material (regolith). Alluvial thickness averages about 15 m in the vicinity of the most northerly longwall panel (MELW1) and reduces to about 10 m on average at the southern end of the surveyed area. Clay content increases to the south. Groundwater Systems The hydrogeological regime of the Wambo area and surrounds comprises two main systems:

• a Quaternary alluvial aquifer system of channel fill deposits associated with Wollombi Brook, North Wambo Creek, Wambo Creek and Stony Creek; and

• underlying Permian strata of hydrogeologically “tight” and hence very low yielding to essentially dry sandstone and lesser siltstone and low to moderately permeable coal seams which are the prime water bearing strata within the Permian measures.

Alluvial Aquifers Prior to the commencement of mining operations in the region, groundwater levels within the North Wambo Creek alluvium generally followed topography and alluvial groundwater would have been routed down-valley to Wollombi Brook. Groundwater levels would have responded to recharge events and associated recessions as the aquifer discharged water during periods between major recharge cycles. The alluvial flow in North Wambo Creek has been altered by the historical and existing mining operations (particularly by the direct open cut excavation of the alluvium and the Wollemi box cut). The approved open cut mining of the section of North Wambo Creek alluvium will result in the removal of alluvium across the full width of the channel with consequent desaturation of the adjacent upstream and downstream alluvium. A review of groundwater monitoring data to date indicates that significant desaturation has occurred in the North Wambo Creek alluvium in the vicinity of the open cut. To minimise these inflows from the North Wambo Creek alluvium to the current open cut, WCPL has constructed the North Wambo Creek Diversion (Stage 1) (Figure 4) in the alluvium upstream of the current open cut limit to divert surface and subsurface (alluvial) flows around the open cut to lower sections of North Wambo Creek. A network of monitoring bores (piezometers) has been established in the alluvial aquifers associated with the principal drainage pathways at Wambo (Figure 5). These monitoring bores include:

• Lower Wambo Creek/Wollombi Brook – P106, P109, P114 and P116. • Upper Wambo Creek – GW02 and GW11. • Stony Creek – GW12 and P315. • North Wambo Creek – GW08, GW09, GW16, GW17, GW18, GW19, P5 and P6. • Wollombi Brook – GW13, GW14, GW15, P16 and P20.

The piezometers nearest the proposed Montrose East Underground Mine are GW16, GW17 and GW19. GW16 is towards the northern edge of the thickest part of the mapped sand/gravel section of the channel (Figure 4); it has a typical depth to water of 7.5 m to 8.0 m. GW17 lies in colluvium on the northern edge of the channel; it has a typical depth to water of 10.5 m to 11.5 m. GW19 is dry, and is sited in colluvium or weathered bedrock according to the GHD (2007) geophysical mapping. Groundwater levels generally correlate well with rainfall trends, showing responses to recharge events and associated recession as the aquifer discharges water during periods between major recharge cycles. Deviations from the climatic trend have been observed in two monitoring bores screened within alluvium associated with North Wambo Creek (P5 and P6 – Figure 5) which show a temporary decline in water levels in early 2008. This temporary decline correlated with the timing of the mining of Longwall 1 of the North Wambo Underground Mine. However, the groundwater levels in P5 and P6 had recovered within the following 12 months.

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Permian Aquifers Prior to the commencement of mining operations in the region, the piezometric surface within the Wambo area most probably reflected the topography, with elevated water levels/pressures in areas distant from the major drainages and reduced levels in areas adjacent to the alluvial lands. Historical and ongoing open cut and underground mining within the Wambo area and adjoining mining operations has now created significant groundwater sinks. This has generated a regional zone of depressurisation within the Permian coal measures. Recharge & Discharge Mechanisms The main groundwater recharge mechanism is infiltration of rainfall to the unconsolidated regolith layer, and from there into the underlying rock mass where favourable permeability is exposed in subcrop areas. There is an annual average rainfall deficit (i.e. evaporation in excess of rainfall) and general low permeability of the underlying rock, and therefore recharge rates to the coal measures are low. Significant groundwater recharge will only tend to occur following major, prolonged rainfall events, or during the late autumn/early winter period when some longer term ground saturation and recharge is feasible. Surface water associated with the principal drainage features will tend to be connected with the associated alluvium, and groundwater within the alluvium will discharge to the stream channels in some areas. However, connectivity with the wider geological environment is thought to be very limited due to the low vertical permeability of the underlying strata. Assessment of Potential Impacts Existing underground and open cut mining operations at Wambo and at surrounding mining operations have created a sink in the local groundwater regime towards which groundwater within the Permian measures flows. The alluvial flow in North Wambo Creek has been altered by the historical and existing mining operations (particularly by the direct open cut excavation of the alluvium and the Wollemi box cut). A summary of the potential impacts of the Modification on local groundwater aquifers and proposed mitigation measures is presented below. Alluvial Aquifers Currently Approved Impacts, Mitigation Measures and Contingency Measures The currently approved open cut limit includes the mid-section of North Wambo Creek along with the majority of the associated alluvium (Figure 4). AGE (2003) estimated that approximately 220 ha of North Wambo Creek alluvium will be open cut mined at Wambo. A conceptual cross-section of the approved and modified open cut pit limits in the vicinity of the North Wambo Creek Diversion is shown on Figure 6. The approved open cut mining of the section of North Wambo Creek alluvium will result in the removal of alluvium across the full width of the channel with consequent desaturation of the adjacent upstream and downstream alluvium. Conservative numerical modelling conducted by AGE (2003) predicted that groundwater inflow to the open cut from the North Wambo Creek alluvium would be up to approximately 6.5 litres per second (L/s) as the open cut progressed through the alluvial materials. AGE (2003) noted that the 6.5 L/s would have been associated with the short-term peak inflow and that the rate would reduce to a much lower steady state inflow after an initial drainage period. Groundwater inflows into the open cut adjacent to the North Wambo Creek have been observed to be generally low. To minimise these inflows from the North Wambo Creek alluvium to the current open cut, WCPL has constructed the North Wambo Creek Diversion (Stage 1) (Figures 4 and 6) in the alluvium upstream of the current open cut limit to divert surface and subsurface (alluvial) flows around the open cut to lower sections of North Wambo Creek. The foundation of the North Wambo Creek Diversion has been keyed down through any near surface alluvium to the underlying weathered bedrock (Figure 6). This facilitates the continued lateral recharge of the alluvium in the lower 2.5 km of North Wambo Creek, which will not be removed by open cut mining and which will continue to drain to Wollombi Brook.

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In the longer term, predictive water balance modelling presented in Gilbert & Associates (2003) found that the final voids will slowly fill with water and, in the long term, water levels will approach an equilibrium level below the spill level of the final voids. Consequently, the expectation is that the voids will behave as sinks with evaporative losses resulting in a net inflow from the backfilled waste rock towards the void (i.e. no flow of groundwater from the backfilled open cut to the North Wambo Creek alluvium is expected). Impact on groundwater quality due to Wambo is limited to the coal seams and Permian aquifers (AGE, 2003). As a result no water quality impact is expected on the local alluvial groundwater system. In accordance with Condition 35 of Development Consent DA 305-7-2003, WCPL has prepared and implemented a Surface and Groundwater Response Plan (SGRP) (WCPL, 2010a). The SGRP includes measures to mitigate adverse surface and groundwater impacts that occur as a result of Wambo. In the event that a groundwater level or quality trigger level specified in the Groundwater Monitoring Program (GMP) (WCPL, 2010b) is exceeded, or if monitoring identifies a long term flow of groundwater from the backfilled open cut to the North Wambo Creek alluvium, the following investigation is conducted in accordance with the SGRP (WCPL, 2010a):

1. Review of monitoring data trends and climatic information along with operational activities will be reviewed to determine whether a more detailed investigation is required.

2. If the investigation identifies actual groundwater impacts and attributes those impacts to Wambo Coal’s activities, appropriate measures will be developed and implemented in consultation with DECCW, DoP and any affected adjacent landowners.

3. Existing management measures will be modified, if required, to minimise the potential for a recurrence. Any modifications will be made in consultation with DoP and other relevant authorities.

Management measures that may be implemented as a result of the investigation described above include:

• WCPL has identified three alluvial production bores in the lower reaches of North Wambo Creek (20BL 132753, 20BL 167737 and 20BL 167738) that have a combined licensed capacity of 613 ML/year (or 19.4 L/s) which is significantly greater than the predicted maximum inflow rates (i.e. 6.5 L/s) predicted by AGE (2003). If necessary, an equivalent portion of these groundwater extraction licences can be relinquished as a direct offset for potential groundwater inflows into the open cut operations.

• Should monitoring identify the long term flow of groundwater from the backfilled open cut to the alluvium compromising the beneficial use of the alluvium groundwater resource, mitigation measures such as the sealing of the alluvium where it intersects the open cut high wall could be employed. This could be achieved by the selective placement of low permeability materials against the alluvium intersection as the open cut excavation is backfilled with waste rock. The placement of this material would inhibit the potential for flow from the backfilled waste rock to the alluvium as well as limit any continued drainage from the alluvium to the backfilled open cut.

The SGRP also includes the following investigation process in the event that monitoring conducted in accordance with the Surface Water Monitoring Program (SWMP) (WCPL, 2010c) identifies a potential surface water impact (e.g. reduced surface water flow in North Wambo Creek):

1. Relevant monitoring data trends and climatic information along with operational activities will be reviewed to determine whether a more detailed investigation is required.

2. If the investigation identifies actual surface water impacts and attributes those impacts to Wambo Coal’s activities, appropriate measures will be developed and implemented in consultation with DECCW, DoP and any affected adjacent landowners.

3. Existing management measures will be modified, if required, to minimise the potential for a recurrence. Any modifications will be made in consultation with DoP and other relevant authorities.

In addition, the SGRP includes the North Wambo Creek Subsidence Response Strategy (NWCSRS) (WCPL, 2008b). The NWCSRS includes specific subsidence, surface water and groundwater monitoring programs to be conducted while the North Wambo Underground Mine undermines North Wambo Creek and response measures in the event of unexpected subsidence-related impacts.

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Montrose East Underground Mine Modification The Montrose East Underground Mine would be accessed directly from the modified open cut highwall via main gate roads (Figures 4 and 6). Potential hydrogeological impacts associated with the development of the Montrose East Underground Mine beneath alluvial aquifers could include:

• Potential hydraulic connection between the North Wambo Creek alluvium or North Wambo Creek Diversion and the Whybrow seam resulting in a reduction in alluvial flows to the lower section of North Wambo Creek and the Wollombi Brook.

• Potential hydraulic connection between the surface (e.g. regolith/colluvium) above the longwall panels and the Whybrow seam resulting in a reduction in surface flows reporting to the North Wambo Creek (including alluvium). This in turn would result in a reduction in alluvial flows to the lower section of North Wambo Creek and the Wollombi Brook.

A subsidence assessment for the Modification has been prepared by Mine Subsidence Engineering Consultants (MSEC) (2011) which includes an assessment of the potential for hydraulic connection between the Whybrow seam and surface features including the North Wambo Creek Diversion and drainage lines above the Montrose East Underground Mine. In relation to the potential for hydraulic connection between the surface and the seam to occur in the North Wambo Creek Diversion, MSEC (2011) concluded:

The proposed longwall finishing ends are at very shallow depths of cover, between 45 metres and 60 metres and, therefore, it is possible that some hydraulic connection could occur between the surface and seam. To avoid possible water inrushes into the workings and to avoid the requirement for significant remediation of the North Wambo Creek Diversion, the location of the longwall finishing ends would be designed so that the potential for hydraulic connection between the creek diversion and seam would be very low. … On this basis, any surface cracking in the vicinity of the creek diversion would be expected to be shallow and discontinuous and, therefore, not result in any observable loss of surface water flow. It is unlikely, therefore, that the North Wambo Creek Diversion would experience any significant impacts resulting from the extraction of the proposed longwalls.

The application of a 26.5 degree line of draw offset, as illustrated in Figure 6, would provide protection of the diversion from direct connection with the fractured zone that would develop above the mined seam. Based on this offset and the MSEC (2011) conclusion, it is expected that there would not be any observable loss of flow from the North Wambo Creek Diversion and therefore there would not be any observable reduction in alluvial flows to the lower section of North Wambo Creek and the Wollombi Brook. In relation to the minor drainage lines located above the longwall panels, MSEC (2011) concluded:

… it is expected that the fractured zone above the finishing (north-eastern) ends of the proposed longwalls would extend up to the surface. It is possible, that hydraulic connection between the surface and seam could occur, where the depths of cover are the shallowest. The drainage lines along the alluvial flats are ephemeral, so water only flows during and for a short period of time after each rain event, and if any such hydraulic connection were to occur as described above, it may also be necessary to modify existing contour bunds to direct flow around the areas of shallow cover, prior to the remediation of the drainage line beds at the completion of mining. There was no observed hydraulic connection between the surface and seam after the extraction of the first two longwalls at the North Wambo Underground Mine, which extracted directly beneath North Wambo Creek at a depth of cover of around 100 metres. This was anticipated by Holt (2003), who stated that “This depth of cover is not expected to cause connection from the surface to the workings as it has not caused connection to single seam workings in the WCPL lease area before”. It may be necessary, at the completion of mining, to undertake remediation of the drainage line beds, in the locations where the depths of cover are the shallowest, which may include reinstating the drainage line beds with cohesive soils.

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With the proposed mitigation measure (i.e. modification of existing contour bunds to direct flow around areas where hydraulic connection has occurred), it is expected that there would be negligible loss of flow reporting to the North Wambo Creek Diversion and therefore there would be a negligible reduction in alluvial flows to the lower section of North Wambo Creek and the Wollombi Brook. In addition to the development of the Montrose East Underground Mine, the Modification would include a reduction (approximately 50 ha) in the currently approved open cut limit (Figures 4 and 6). Based on the GHD (2007) alluvium mapping, the reduction in the open cut limit would result in a reduction in the area of North Wambo Creek alluvium that will be open cut mined by approximately 27 ha (or 12% reduction in the total area of North Wambo Creek alluvium that is currently approved to be open cut mined). Maintaining approximately 27 ha of North Wambo Creek alluvium would allow a larger portion of the North Wambo Creek Diversion to be located within the existing North Wambo Creek alluvium (Figure 4). Reference to Figure 4 shows that the alluvium in the channel would maintain continuity between upgradient and downgradient sections around the ends of the longwall panels. This would allow for the improved transfer of flow in the alluvials along the North Wambo Creek Diversion to the alluvium in the lower section of North Wambo Creek, which would not be removed by open cut mining and which would continue to discharge to Wollombi Brook. Based on the above, the reduction in North Wambo Creek alluvium that would have otherwise been open cut mined (under the existing approval), it is expected that the Modification would in fact result in a reduced impact on the alluvial aquifers than the currently approved extent of the open cut. Impact on groundwater quality due to the Modification would be limited to the coal seams and Permian aquifers. As a result no water quality impact is expected on the local alluvial groundwater system. Monitoring Groundwater and surface water monitoring should continue to be conducted in accordance with the GMP and SWMP which includes:

• groundwater quality and levels in the North Wambo Creek and Wollombi Brook alluvium;

• groundwater inflows into the open cut and underground mining operations;

• stream flow monitoring in North Wambo Creek and Wollombi Brook. In addition, the NWCSRS should be revised to include the Montrose East Underground Mine. Mitigation Measures The following mitigation measures should be implemented for the Modification:

• Modification of existing contour bunds to direct flow around the shallow depth of cover areas if hydraulic connectivity between the surface above the longwall panels and Whybrow seam is observed.

• The location of the longwall finishing ends should be designed so that the potential for hydraulic connection between the longwall panels and North Wambo Creek Diversion would be very low.

• Continual operation of the North Wambo Creek Diversion to divert both surface and subsurface (alluvial) flows around the open cut limit.

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Contingency Measures Consistent with the currently approved SGRP, in the event that a groundwater quality or level trigger level specified in the GMP is exceeded, or if monitoring identifies a long term discharge of groundwater from the backfilled open cut to the North Wambo Creek alluvium, an investigation should be conducted in accordance with the SGRP. Management measures that may be implemented as a result of the investigation described above could include:

• Relinquishment of an equivalent portion of water access licences for three bores in the lower reaches of North Wambo Creek (20BL 132753, 20BL 167737 and 20BL 167738) as a direct offset for potential groundwater inflows into the underground and/or open cut operations.

• If necessary (based on the outcomes of monitoring and final mine planning), create a backfill seal against the exposed North Wambo Creek alluvium by the selective placement of low permeability materials against the alluvium intersection as the open cut excavation is backfilled with waste rock.

Permian Aquifers Currently Approved Impacts and Mitigation Measures Open cut and underground mining operations have occurred in the vicinity of Wambo since 1969. These operations have resulted in substantial dewatering of the coal seams in the Wambo area. With adjoining mining operations, this is likely to have generated a regional zone of depressurisation within the Permian coal measures. The regional depressurisation within the Permian coal measures is supported by available groundwater levels. The currently approved mining operations would continue to depressurise these Permian aquifers (particularly in the vicinity of the underground mines). Due to the poor quality of the groundwater associated with the Permian coal measures (AGE, 2003), it is considered that the resource is of limited benefit and, as a result, any loss through mining activities associated with the currently approved operations would not be detrimental to any users in the area. Montrose East Underground Mine Modification The Whybrow seam is the most extensively mined seam at Wambo, having been mined in numerous open cuts and at three underground mines (Ridge, Homestead and Wollemi Underground Mines), and will also be mined in the approved Whybrow Underground Mine located approximately 1 km to the south-east of the Montrose East Underground Mine. As the Wambo open cut progresses to the north-west, excavating the Whybrow seam, the Permian coal measures would continue to be depressurised. It is therefore expected that the Modification would result in a minor incremental change in the extent of depressurisation in the Permian coal measures at Wambo. Mitigation Measures Given the lack of licensed water supply bores within the Permian coal measures and the generally poor water quality, no specific groundwater impact management measures are proposed for the Permian aquifer system. Notwithstanding the above, groundwater levels and quality should continue to be monitored at Wambo in accordance with the GMP. Please contact the undersigned should you have any queries. Yours sincerely,

Dr Noel Merrick

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References Australasian Groundwater and Environmental Consultants Pty Ltd (AGE) (2003) Wambo Development Project

Groundwater Impact Assessment. Appendix F to the Environmental Assessment. GHD (2007) Report for Upper Section, North Wambo Creek Geophysical Survey. July 2007. Prepared for

Wambo Coal Pty Ltd. Gilbert & Associates (2003) Wambo Development Project Surface Water Assessment. Appendix E to the

Environmental Assessment. Mine Subsidence Engineering Consultants (MSEC) (2011) Montrose East Underground Mine – Longwalls 1 to

3 Subsidence Predictions and Impact Assessments for the Natural Features and Surface Infrastructure in Support of the Environmental Assessment for a Section 75W Modification Application.

Wambo Coal Pty Limited (WCPL) (2003) Wambo Development Project Environmental Impact Statement. Wambo Coal Pty Limited (WCPL) (2008a) Wambo Coal Mine Annual Environmental Management Report July

2007 to June 2008. Wambo Coal Pty Limited (WCPL) (2008b) North Wambo Creek Subsidence Response Strategy. Wambo Coal Pty Limited (WCPL) (2010a) Surface and Groundwater Response Plan. Wambo Coal Pty Limited (WCPL) (2010b) Groundwater Monitoring Program. Wambo Coal Pty Limited (WCPL) (2010c) Surface Water Monitoring Program.