JOHN O. ROBB CHARLES K. PURCELLJAMES C. RITCHIE JAMES P. FITZGERALDWILLIAM C. SCHAAB ANDREW G. SCHULTZROBERT M. ST. JOHN JOHN M. BRANTJOSEPH J. MULLINS JOSEPH B. ROCHELLEDUANE C. GILKEY SCOTT D. GORDONMARK K. ADAMS SUSAN S. THROCKMORTONROBERT G. McCORKLE ANGELA M. MARTLN[ZPETER G. PRLNA PATRICIA M. TAYLORBRUCE: HALL OGDEN M. REIDJOHN P. SALAZAR BRIAN H. LEMATTAWILLIAM S. DIXON MARK A. SMITHJOHN P. BURTON R. NELSON F~ANS[REX D.THAOCI'IoMORTON ,HURMAN W. MOORE mJONATHAN W. HEWES STEVEN G. KOPELMANGE;NE C. WALTON PAUL R. KOLLERW. ROSERT LASATER. JR. JAMes P. BIEGMARK C. MEII;:RIHG JAY 9. SIMONSONCATHERINE T. GOLDBERG JAY D. HLLLTI'IAVIS R. COLLIER . CHARLES J. VIGILJO SAXTON BRAYER MARY P. KELEHERS. I. BETZER. JR. D~WITT M. MORGANEDWARD RICCO THERESA W. PARRISHW. MARK MOWERY SHERYL M. SHANORPATI'ILCK M. SHAY NICOLE M. VADNAISNANCY J. APPLEBY LISA PISTORIO FORDWAYNE G. CHEW MARK L. ALLENDAVID C.OAVENPORT. JR. BARBARA G. STEPHENSONDEBRA ROMERO THAL DONALD L.JONESELLEN G. THORNE THOMAS L. STAHLTRACY E. Mc:GEE DAVID W. BUNTINGCHARLES E. STUCKEY JENNIFER L. STONEHENRY M. BOHNHOFF TINA S. BORADIANSKY

RODEY,DICK_~ON, SLO~~,AKIN & ROBB, PA.COUNSELORS AND ATTORNEYS AT LAW

COUNSEL

JOE C. DIAZPAUL A. COOTER

MARCY PLAZA, SUITE 101

123 EAST MARCY STREET

SANTA FE, NEW MEXICO 87501

OF' COUNSEL

DON L. DICKASONWILLIAM A. SLOANJACKSON G. AKI N

RAY H. ROCEY

P. O. 80X 1357

SANTA FE, NEW MEXICO 87504-1357

PEARCE C. ROOEY (1669-1956)

FACSIMILE (50S) 989-9542

ALBUOUE:ROUE: OFFICEALBUOUEROUe: PLAZA201 THIRD STREET NW

SUITE 2200P. O. BOX ISS8

ALBUQUERQUE, NM 87103TELEPHQN E 765- 5900

AREA CODE 505

FACSIMILE 768-7395

7ELEPHONE (505) 984-0100

October 19, 1992WRITER'S DIRECT NUMBER

HAND-DELIVERED

NMEDHarold1190Santa

Groundwater sectionRunnels Bldg.

st. FrancisFe, NM 87502

Attn: Annette Morland

Re: In the Matter of Pegasus Gold Corporation's Application forRenewal/Modification of Discharge Plan 55 DP-55

Dear Ms. Morland:

\~.:tiIfSa6

Enclosed is Appllcant's Proposedreferenced matter.

Findings of Fact in the above

Sincerely yours,

R~~.~Y_I __ D-±eR::O~_~_~~~~~OBB,_ P.A.BY-~_~-:::::=:---- -- - L..-L, r=:

-~--~

Brian H. Lematta

BHL:djs

Encls.

cc: (w/enclosure)Judy AmerDouglas Meiklejohn RECEIVED

OCT 1 9 1992GROUND WATEH 8UHEAU

BEFORE THE SECRETARY RECEIVEDOCT 1 9 1992

GROUND WATER BUREAU

NEW-MEXICO ENVIRONMENT DEPARTMENT

In the Matter ofPegasus Gold Corporation'sApplication for Renewal/Modificationof Discharge Plan 55

APPLICANT'S PROPOSED FINDINGS OF FACT

Applicant Pegasus Gold Corporation ("Pegasus"), by and through its

attorneys, Rodey, Dickason, Sloan, Akin & Robb, P.A. (Mark K. Adams

and Brian H. Lematta) hereby requests the Hearing Officer to make

the following findings of fact upon the evidence submitted at the

hearing in this proceeding:

General.

1. Pegasus is the person seeking the renewal/modification of

Discharge Plan 55 (the Plan).

2. Pegasus is the owner of the Cunningham Hill mine site

(the "Property"), the location of the cyanide/nitrate plume and

acid rock drainage discharges. Testimony of J.R. Phillips

("Phillips"), p. 13, proposed Plan Introduction, Figure 3. (The

page .number references are to the transcript of the public hearing

made by Bean & Harris, Professional Court Reporting Service.)

3. Pegasus submitted more than three copies of the proposed

Plan to the Secretary (the "Secretary") of the New Mexico

Environment Department (the "Department") in compliance with New

Mexico Water Quality Control Commission ("WQCC") Regulations and

the Regulations Governing P~blic Hearing and Review Procedures for

Proposed Discharge Plans Before the Director of the Environmental

Improvement Division. Thereafter, the following occurred, in full

compliance with both sets of Regulations: (a) no·tices of the

proposed Plan and of the public hearing held on October 8-9, 1992

were given by the Secretary~ (b) the Secretary made copies of the

proposed Plan and any amendments or modifications thereto available

for public inspection and copying at the Department in Santa Fe for

more than 3a days prior to October 8, 1992; (c) the Secretary

allowed a period of more than 30 days during which comments could

be submitted to her and a public hearing requested; (d) the

Secretary appointed a Hearing Officer to preside over the hearing;

(e) a hearing was conducted on October 8-9, 1992; (f) a transcript

of the hearing was made at the request and expense of Pegasus;

(g) at the hearing, all interested persons were given a reasonable

chance to submit data, views and arguments orally or in writing and

to examl.ne witnesses testifying at the hearing. Testimony of

Judith Amer, pp. 5-6, and Department Preliminary Exhibits 1, 2 and

3 .

Cyanide and Nitrate plume Remediation.

4. The proposed Plan is designed to capture the cyanide and

nitrate plume through increased pumping and expanded land

application. Testimony of Mary Barraco ("Barraco" ), p. 17,

proposed Plan Introduction, pp. 3-5.

5. The proposed Plan sets forth in detail the methods and

techniques Pegasus proposes to use, and the processes expected tonaturally occur, which will ensure that this discharge is made in

compliance with regulations. Proposed Plan and Appendices.

2

6. The proposed Plan includes information concerning the

quantity, quality and flow characteristics of this discharge.

Testimony of Robert Garcia ("Garcia"), p. 40, Appendices A, Band

K.7 . The proposed Plan includes information on the location of

this ddscha rqe and of any bodies of water, water courses and ground

water discharge sites within one mile of the outside perimeter of

the discharge site, and existing or proposed wells to be used for

monitoring. Garcia, p. 41, Appendix D.

8. The proposed Plan includes information on the depth to

and total dissolved solids ("TDS") concentration of the ground

water most likely to be affected by the discharge. Garcia, p. 43,

Appendix F.

9. The proposed Plan includes information on the flooding

potential of the discharge site. Garcia, p. 43, Appendix H.

10. The proposed Plan includes information on the locationand design of site(s) and method(s) to be available for sampling,

and for measurement or calculation of flow. Garcia,

p. 43, Appendix F.

11. The proposed Plan includes information on the depth to

and lithological description of rock at the base of the alluvium

below the discharge site. Garcia, p. 44, Appendix B.

12. The proposed Plan includes the additional information

necessary to demonstrate that approval of the Plan will not resultin either concentrations in excess of the standards of Section 3-

103 of the WQCC Regulations or the presence of any toxic pollutant

3

at any place of withdrawal of water for present or reasonably

foreseeable future use. Garcia, p. 45, Appendix B.

13. To a reasonable degree of scientific certainty, the land

application program proposed under the proposed Plan will capture

the cyanide and nitrate plume. Testimony of Robert Newcomer

("Newcomer"), p. 76, proposed Plan Appendices A, B.

14. To a reasonable degree of scientific certainty, the land

application program, together with natural degradation and

dispersion, will result in cyanide concentrations decreasing in

every part of the plume. Newcomer, p. 76.

15. To a reasonable degree of scientific certainty, following

the completion of the pump back and land application programs

proposed in the proposed Plan, considering natural purification and

dilution effects, and with the Department's proposed conditions of

approval to the proposed Plan, the discharge from the discharge

site will not result in a hazard to public health, i.e., the

discharge will not result in any of the human health water quality

standards set forth in Section 3-103A. of the WQCC Regulations

being exceeded off of the Property. Newcomer, p. 77, Garcia pp.49, 51.

16. To a reasonable degree of scientific certainty, with the

proposed conditions of approval to the proposed Plan, the discharge

from the spend ore pile and the land application area will not

result in undue risk to property. Newcomer, p. 78, Garcia pp. 49,51.

4

17. The total nitrogen in the effluent that will enter the

subsurface, which will occur only at the land application area

described in the proposed Plan, will not exceed 200 pounds per acre

per year, and that effluent will meet the standards of Subsection

3-103 of the WQCC Regulations, except for nitrates and contaminants

in the water diverted as provided in wQCC 3-l09D. Garcia, p. 46,

proposed Plan Appendix D.

18. The monitoring system outlined in the proposed Plan for

the remediation of the cyanide and nitrate plume is acceptable to

the Secretary, and includes adequate provisions (i) for sampling of

effluent and adequate flow monitoring so that the amount being

discharged onto or below the surface of the ground at the land

application area, which will be the only place of discharge, can be

determined and (ii) for reporting monitoring data to the Secretary

at frequencies determined by her. Garcia, p. 47, proposed Plan

Introduction, pp. 6-9.

19. Contaminants in the treated water pumped under the

proposed remediation plan in the proposed Plan will be discharged

to the aquifer from which the contaminated water was diverted.

GarCia, p. 49, proposed Plan Appendices A, B.

20. The proposed Plan contains provisions for the sale or

reclamation of the spent ore pile. Garcia, pp. 54-57, proposed

Plan Introduction, pp. 9-11, Appendix H.Waste Rock Facility Acid Rock Drainage Remediation.

21. The proposed Plan contains a mitigation plan for the acid

rock drainage (ARD) at the Cunningham Hill waste rock facility.

5

Testimony of William R. Schafer ("Schafer"), p. 35, proposed Plan

Introduction pp. 11-28, Appendices, R, S, U, V.

22. The proposed Plan sets forth in detail the methods and

techniques Pegasus proposes to use, and the processes expected to

naturally occur, which will ensure that this discharge is made in

compliance with WQCC Regulations. Proposed Plan and Appendices.

23. The proposed Plan includes information concerning the

quanti ty, quality and flow characteristics of this discharge.

Garcia, p. 40, Appendices K, R.

24. The proposed Plan includes information on the location of

this discharge and of the bodies of water, watercourses and ground

water discharge sites within one mile of the outside perimeter of

the discharge site, and existing or proposed wells to be used for

monitoring. Garcia, p. 42, Appendix R.

25. The proposed Plan includes information on the depth to

and TDS concentration of the ground water most likely to be

affected by this discharge. Garcia, p. 43, Appendix F, P.

26. The proposed Plan includes information on the flooding

potential of the discharge site. Garcia, p. 43, Appendix R.

27. The proposed Plan includes information on the location

and design of site(s) and method(s) to be available for sampling,

and for measurement or calculation of flow. Garcia, p. 43,

Appendix S.

28. The proposed Plan includes information on the depth toand lithological description of rock at the base of the alluvium

below the discharge site. Garcia, p. 44, Appendices M, P.

6

29.· The proposed Plan includes the additional information

necessary to demonstrate that approval of the Plan will not result

in concentrations in excess of the standards of Section 3-103 of

the WQCC Regulations or the presence of any toxic pollutant at any

place of withdrawal of water for present or reasonably foreseeable

future use. Garcia, pp. 44-45, Appendices M, P.

30. A water balance investigation is an accounting method

where all of the sources of water and all of the losses of water

must sum to zero. Schafer p. 41.

31. The water balance investigation performed by Pegasus at

the waste rock facility shows that there is an historic average of

about 50 gallons per minute of outflow from the facility. Schafer,

pp. 37, 37, 41, 42.32. To a reasonable degree of scientific certainty, the

diversion plan and reclamation plan being implemented by Pegasus

pursuant to the proposed Plan will result in reduction of the water

content of the waste rock facility and a correspondinsr reduction in

acid rock drainage outflow. Schafer, p. 47, proposed Plan Appendix

R.33. The interceptor trench constructed by Pegasus at the toe

of the waste rock facility will capture the acid rock drainage

moving from the waste rock facility to the alluvial aquifer below.

Testimony of Dirk Van Zyl, p. 56, proposed Plan Appendix M.34. The diversion channels described in the proposed Plan

have the capacity to carry the runoff from any reasonably

7

expectable precipitation event. Testimony of Bruce Parker("parker"), p. 65-66.

35. The combination of the diversion channels and othersource control measures and reclamation activities beingimplemented by Pegasus pursuant to the proposed Plan will reducethe volume of water that enters the waste rock facility by about 90percent over its uncontrolled and unreclaimed condition. Parker,p. 65.

36. The combination of the source control and reclamationactivities being implemented by Pegasus pursuant to the proposedPlan will reduce the volume of acid rock drainage that flows outfrom the waste rock facility by 90 percent. Schafer, p. 47.

37. To a reasonable degree of scientific certainty, followingthe completion of the treatment system for acid rock drainagedescribed in the proposed Plan, and the reclamation of andreduction of water inflows into the waste rock facility,considering natural purification and dilution effects, the acidrock drainage from the waste rock facility will not result a hazardto public health, i.e., will not result in the human health waterquality standards set forth in Section 3-103A. of the WQCCRegulations being exceeded off of the Property. Newcomer, p. 77.Garcia pp. 76-84, 90-91.

38. To a reasonable degree of· scientific certainty, thedischarge from the waste rock facility will not result in unduerisk to property. Newcomer, p. 78, Garcia p. 76.

8

39. Ground water that has a TDS concentration of 10,000 mg/l

or less will not be affected by the discharge from the waste rock

facility. Garcia, pp. 75-76.

40. The monitoring system discussed in the proposed Plan for

the remediation of the acid rock drainage from the waste rock

facility includes adequate provisions (i) for sampling of effluent

and adequate flow monitoring so that the amount being discharged

onto or below the surface of the ground can be monitored and (ii)

for reporting monitoring data to the Secretary at a frequency

determined by her. Proposed Plan Introduction, p. 29.

R~~, DIC~~~~<_=~~ ~ ROBB,-'- .'---::-::-/ ~'-. ~-'...,;/ ~~: ?---........By=-~~ __~ ~ _

Paul A. Cooter forMark K. Adams and Brian H. LemattaAttorneys for Pegasus Gold CorporationP.O. Box 1888Albuquerque, New Mexico 87103(505) 765-5900

P.A.

We hereby certify that a copyof the foregoing pleading wasmailed to counsel of recordand all parties listed onSchedule A attached heretothis 19th day of October, 1992.

-' _..__.....- ""'--"'J

<RQDEY, DICKA~~OBB, P.A ..---. .::~;~ =c: -<-~ .' /- --- -

By~p-a-u~l~A~.~C-o-o-t-e-r---------------------------

9

SCHEDULE A

Judith M. EspinosaNM Environment Dept.P. O. Box 26110Santa Fe, NM 87502

Sacred Ways34 Main StreetMadrid, NM 87010

Kathleen SisnerosNM Environment Dept.P. O. Box 26110Santa Fe, NM 87502

Gwen Wardwell, ChairRio Grande Chapter of

the Sierra Club945 Camino de ChellySanta Fe, NM 87501

Ernie RebuckNM Environment Dept.P. O. Box 26110Santa Fe, NM 87502

Tom ParkerBox 172Cerrillos, NM 87010

Bob GarciaNM Environment Dept.P. O. Box 26110Santa Fe, NM 87502

Stan WaldronStar RouteBox 4845Sandia Park, NM 87047

J.R. PhillipsPegasus Gold Corp.P. O. Box 8Cerrillos, NM 87010

Gilbert ChavezCounty Land Use &

Code AdministrationP. O. Box 276Santa Fe, NM 87504-027

Concerned CitizensCommittee

c/o Ross LockridgeP. O. Box 245Cerrillos, NM 87010

Carmen Soleas570 Main StreetMadrid, NM 87010

Pris MeiserP. O. Box 238Cerrillos, NM 87010

Skeeter Leard#193 Main StreetMadrid, NM 87010

James P. MalottP. O. Box 247Cerrillos, NM 87010

Glen BawdenHouse #15Madrid, NM 87010

Melba McLemoreNo. 551 AB-Madrid, NM 87010

Griff Salisbury222 Copper Tr.Santa Fe, NM 87505

Donald CutterP. O. Box 223Cerrillos, NM 87010

Lone Mountain Ranchc/o Owen M. LopezP. O. Box 2068Santa Fe, NM 87501

Friends of Santa FeCounty

c/o Jeanie CraginRt. 2, Box 258 Gallina St.Santa Fe, NM 87501

State TreasurerNEA BuildingP. O. Box 608Santa Fe, NM 87504

Robert Newcomer2703 Broadbent Pkwy. NESuite DAlbuquerque, NM 87107

Sierra ClubMining Committee612 Old Santa Fe TrailSanta Fe, NM 87501

Richard A. SimmsSimms & Stein P.A.P. O. Box 280Santa Fe, NM 87504

San Marcos Assoc.c/o S.M. GoodwinCrossed Sabers RanchCerrillos, NM 87010

Barbara Anschel8R Box 1041Sandia Park, NM 87047

Gov. Jacob ViarraelPojoaque

Route II, Box 71Santa Fe, NM 87501

Bob SutherlandNellie Greenwood#114 Country ClubGardens Mobile Home

ParkSanta Fe, NM 87505

Governor Victor ReanoP. O. Box 99Santa DomingoPueblo, NM 87052

Cathy DaviesHouse #122Madrid, NM 87010

Governor Espisanio ModyP. O. Box 70Cochiti Pueblo, NM 87072

Elisa River StacySRB 999Sandia Park, NM 87047

Barbara MarigoldTapestry GalleryMadrid, NM 87010

Brenda FaroP. O. Box 177Cerrillos, NM 87010

Turquoise Hills Assoc.Rancho Alegrec/o Griff Salisbury258 Gallina RoadSanta Fe, NM 87505

Paula O'NeilP. O. Box 110Cedar Crest, NM 87008

David King