CEO Blog - December 7, 2011
Wednesday, December 07 2011 21:00
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Q:  What is the status of the Air Quality Permit? Is something wrong?  Does this impact when we go into production? 

A: Thank you for the inquiries.  Again, we have received several similar inquiries and this blog also serves as an update to my blog of November 14, 2011.

As previously reported, we are in the final stages of the Air Quality Permit, to be issued by the State of Nevada Department of Environmental Protection (NDEP). This permit is required before we can construct the remaining components of our production system and production can commence.  These components include our new crushing facility, our new expanded Merrill Crowe processing facility and the final expansion on our Heap Leach and Process Solution Ponds.  The initial application for this permit was submitted in 2010. Since that time, the program has been significantly revised by the state, amended by Federal oversight, and most recently further iterated by the Nevada Mining Association to accommodate industry input beneficial to the final outcome. Unfortunately, we have been in the middle of many of these regulatory adjustments and the process has created some delays. However, although I appreciate the heightened concerns, I want to reiterate that we will receive this permit. It is a matter of “when,” not “if.”

First let me address the question of when. Normally state permits have guidelines that establish the worst-case turnaround time from submittal to receipt. This “clock” can be extended because of re-engineering by the applicant (a small amount of which we have done), but in general it is well adhered to deadline. Under normal circumstances, that “clock” would have expired in late November, including the extensions caused by our revisions, moved to mid-December and we could have been issued our permit. Since the parameters establishing the Air Quality Permit itself are being finalized during this process and subject to changes and interpretations establishing policy (to date these changes have generally been positive), the “clock” has been “extended.”

Our team has been in weekly and even daily contact with NDEP representatives over the past couple months. Although delays are frustrating (to the state as well as to us), the state has been generally communicative as to the cause of each delay; and, given the circumstances, their reasons answer questions to our satisfaction.

According to the most current update given to us Monday, December 5th, additional modeling is currently being completed by the state to ensure full compliance with the latest requirements. Following that, the permit will go to public notice for a minimum of 30 days. It is our understanding that a public hearing will be scheduled approximately 30 days from the beginning of the public notice period. Since the permit is written to statutory requirements and objections can only be made to the engineering supporting those requirements, we expect the permit to issue soon after the public hearing. This is our best understanding of a timeframe that in the end is controlled by the state.

About 6 weeks ago, we commenced construction on our new three-million+ gallon process solution pond. This was a time sensitive activity because colder weather may have interfered with completion before the winter. We have nearly completed the excavation of this pond and, earlier this week, the liners for this expanded process solution pond arrived and lining activities have begun.  The weather was very cooperative and we certainly expect completion before year-end.

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This has significantly and positively mitigated the delays experienced from the Air Quality permit. I have included a picture here from the recent process pond construction that was taken just a few days ago as well as photos of the arrival of the liners.

 

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Once the Air Quality Permit is issued, the Company has approximately five months of remaining construction activities including land clearing, excavation and leveling, primarily associated with pre-stripping, mine preparation and stock piling, the installation of the crushing facility and installation of the expanded Merrill Crowe facility. 

As a reminder, we have also scheduled delivery of remaining equipment during this week (and early next week). This delivery represents the remaining rolling stock for continuing production activities and I will blog that event next week and provide the update on Air Quality, as soon as we are notified that it has gone to public notice.

In summary, we are working within existing permits and constructively marching toward production.

Kindest regards,

Corrado De Gasperis
President and CEO