Environment

ISR allows the extraction of mineralisation with minimal disturbance to the existing natural conditions. In contrast to underground and open pit mining, there are:

• no open pits;
• typically no rock dumps and limited requirements tailings storage. Our Gornostay Project will contain a tailings storage facility. The volume of tails will be significantly less, however, than in conventional mining and processing;
• no dewatering of aquifers;
• much smaller volumes of mining and hydrometallurgical effluents (that could contaminate the surface, air and water supply sources); and
• very limited exhaust pollution.

As a result, the impact of ISR projects, like our Gornostay Project, on the environment is much less than for projects using conventional mining methods, as long as projects are properly planned, operated and closed, using best practices.

We are committed to full compliance with all environment regulations and maintenance of high environmental performance standards on our Gornostay Project. We are subject to various national and local environmental protection laws and regulations in Kazakhstan. These laws and regulations govern a broad range of environmental protection matters, including mining control, land rehabilitation, air emissions, noise, and water and waste discharge control. We develop and operate our facilities and conduct our operations materially in accordance with applicable local laws and regulations on environmental issues. However, even with adoption of best practices, some contamination of ISR blocks is an inevitable process, but it is localised and limited to operational blocks within adjacent areas.

We will continue to improve the level of environmental and social data collected to meet international best practice standards as we progress towards commercial operations. In particular, we are committed to carry out a full Environmental and Social Impact Assessment (“ESIA”), including preparation of numerous plans and management systems, including an environmental management system, a monitoring scheme for emissions, releases and ambient environment, standard reporting procedures and an outline of response procedures for non-compliance or emergencies. A draft ESIA plan for our Gornostay Project was approved by the Department of Ecology of East Kazakhstan on 26 November 2018 and we have received a permit for emissions which is valid until the end of 2021. We plan to begin the ESIA in the second half of 2021 and expect to complete such assessment by the end of 2022.

Since August of 2019, we have carried out proactive quarterly monitoring of groundwater taken from observation wells located along the perimeter of the main wells, conducting tests according to various parameters, including acidity, total mineralisation and total hardness, among others. No deviations from expected standards have been observed during such monitoring.

In ISR, the primary risk of contamination for other environments is:

• soils and surface waters due to damaged pipes;
• air pollution by sulphur dioxide due to damaged sealed connections; and
• contaminated aquifers outside ISR blocks, especially above ISR blocks due to damaged operational well.

Contamination sources are the reagents used for leaching and metals in pregnant solutions.

Although the risk of such contamination is localised, it has the potential to impact the regional economy as well as flora and fauna in the immediate area. We have adopted and will continue to adopt measures to mitigate the impact of our operations on the environment, and are committed to implement the recommendations and action points in relation to the management of Environmental, Health and Safety issues set out in the Competent Person’s Report. We will carry out air, water (including underground water) and soil monitoring to national standards. A programme of “industrial environmental monitoring” is to be implemented during operation. Depending on final outcomes and recommendations upon completing our ESIA, steps we might take to mitigate environmental risk include:

Soil management

Construction and operational activities of our Gornostay Project will affect soil in the project region. We will consider the following steps to prevent soil contamination;

• removal and storage in special mounds of topsoil and potentially fertile layer;
• construction of roads connecting the industrial site with existing paved roads (already constructed);
• construction of paved access roads and sites on the plant territory;
• surface water drainage management; and
• mechanized garbage collection, irrigation of roads and sites in summer, and snow removal in winter.

Air quality management

The most significant possible exhaust agent is sulphur dioxide. 

As of the Latest Practicable Date, the level of exhaust did not exceed legally permissible levels. Going forward we will make sure:

• that all connections between pipes are sealed; and
• we will consider covering ponds hermetically with a roof, as needed.

We will also consider monitoring the sulphur dioxide level in the atmosphere during the operation process when we begin the operation of the commercial wellfield stock:

Waste management

The following measures will be considered when we begin the operation of the commercial wellfield stock:

• tails remaining after processing will be collected in a tailings storage facility;
• domestic sewage discharged from the site will be discharged to a suitable facility;
• sewage and storm water will be collected and conducted to a storm water reservoir and treatment facility. Once treated, this water will be used to recharge recycling systems, thereby reducing the use of fresh and reservoir water;
• we will not make discharges into natural waterways; and
• other types of domestic waste are to be temporarily stored on site and periodically removed by subcontracted third parties.

Underground water management

As managing underground water is an integral part of our ISR operations, we will:

• Prepare a hydrogeological model of the region and hydrodynamic and geochemical models of the ISR process which can be used for optimal design of the wellfield including location of monitoring wells;
• Monitor underground water flow and composition on an on-going basis during ISR operation, especially in fault and fissure zones as well as in directions of natural underground water flow. To aid in such monitoring, we plan to construct an additional barrier of monitoring wells around mineralised areas especially toward to Irtysh River to eliminate the potential for accidental contamination of Irtysh River by pregnant solutions; and
• Use specialised licenced software for modelling the hydrodynamic of leaching/pregnant solutions in ISR. In March 2020 we entered into an agreement with software developers to license such software.

Land rehabilitation

According to the SSU Contract, 1.0% of exploration cost within the exploration period and 0.1% of the operational cost within the production period should be paid to a special liquidation fund. We have opened a deposit account with a Kazakhstan bank to keep such fund. These funds will be used after closure of our Gornostay Project for removal of all buildings, well tamponage, soil restoration, and vegetation and cleaning and monitoring of underground water. However, in a situation where a higher cost of closure and remediation work is required, the deficit of the fund will need to be covered by us. On the other hand, the remaining budget will be returned to us if the cost of closure and remediation is less than the fund. The Competent Person has estimated that closure and remediation cost will exceed the requirements set out in the SSU Contract (of 0.1%) and will amount to approximately 3% of operational cost, comprising:

• 1% during operation for emergency responses and collection money in special fund;
• 1% after closure of operational blocks/sites;
• 1% after closure of mine including post-closure monitoring.

Mine closure requirements require us to restore the affected property and aquifer to pre-mining conditions unless certain facilities are required to remain to support the post mining land use.

Surface restoration

Reclamation activities generally relate to reclaiming surface disturbances and structure removal, including injection and recovery wells; pregnant and barren solution ponds as well as multiple water impoundments. The wells will be closed by removing the downhole pumps and electrical equipment. The wells will be filled with Portland cement and the surface hole will then be backfilled and levelled out. All pipelines, electronics, pumps, and other material will be removed off-site for reuse, recycling, or landfill disposal.

Underground water

Self-restoration of underground water will occur due to reactions of the solutions with geological substrate: neutralisation, oxidation and sorption of dissolved components, as well as microbiological activity. This process should be monitored by old and new observation wells, and is usually slow, with a total duration of 10 to 16 years.