1 2 WEK'EEZHII LAND AND WATER BOARD 3 4 RECONVENED PUBLIC HEARING 5 6 7 DIAVIK DIAMOND MINES INC. 8 WATER LICENCE RENEWAL 9 10 11 Panel Members: 12 Chairperson Violet Camsell- 13 Blondin 14 Member Joyce Rabesca 15 Member Alfonz Nitsiza 16 Member Joseph Judas 17 18 19 20 HELD AT: 21 22 Explorer Hotel 23 Yellowknife, NT 24 June 4th, 2007 25 Day 1 of 2

1 APPEARANCES 2 John Donihee )Board Counsel 3 Zaby Nevitt ) Board Staff 4 Patty Ewaschuk ) 5 6 Gord Macdonald )Diavik Diamond Mines 7 Brad Armstrong ) Inc. 8 9 Arthur Pape )Tlicho Government 10 Don MacDonald ) 11 Eddie Erasmus ) 12 13 Kathy Racher )INAC 14 David Livingstone ) 15 Charlotte Henry ) 16 Scott Duke ) 17 18 John McCullum )EMAB 19 20 Anne Wilson )Environment Canada 21 22 Bruce Hanna ) Department of 23 ) Fisheries and Oceans 24 25

1 TABLE OF CONTENTS 2 Page No. 3 List Of Exhibits 4 4 5 Opening Comments 5 6 7 Presentation by WLWB Panel 14 8 Question Period 47 9 10 Presentation by Diavik Diamond Mines Inc. 143 11 Question Period 157 12 13 14 Reporter's Certificate 222 15 16 17 18 19 20 21 22 23 24 25

1 LIST OF EXHIBITS 2 No. Description Page No. 3 4 The document, Applicable Technology 4 for the Management of Mining Effluence 5 in Northwest Territory 165 6 5 SENES Document 165 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

1 --- Upon commencing at 9:14 a.m. 2 3 THE CHAIRPERSON: Good morning. We will 4 call this public hearing to an order here. Usually when 5 we conduct meetings or come to a forum, we usually open 6 up with a prayer. We haven't been too successful in 7 getting an Elder, so we called upon one of our Board 8 Member, Joseph Judas to do an opening prayer for us. 9 Joseph...? 10 MR. JOSEPH JUDAS: Good morning. My name 11 is Joseph Judas and I'm one of the Board -- Wek'eezhii 12 Board. I'm just going to do an opening prayer this 13 morning. 14 15 (OPENING PRAYER) 16 17 THE CHAIRPERSON: Good morning, everyone. 18 My name is Violet Camsell-Blondin and I'm the Chair of 19 the Wek'eezhii Land and Water Board. I wanted to know 20 from the translators -- from Pido which number is for 21 Tlicho and which is for -- 2 is for Tlicho and 4 is for 22 Chipewyan? Okay, thank you. 23 Okay, it has been a number of months, but 24 it's good to see so many familiar faces and many new 25 ones, as well. Most of you are likely familiar with the

1 background of the Board, but I will provide a brief recap 2 for those who may not be aware of who we are. 3 The Wek'eezhii Land and Water Board was 4 established following the implementation of the Tlicho 5 Agreement on August the 4th, 2005. The implementation of 6 the Tlicho Agreement resulted in changes to the MacKenzie 7 Resource Management Act including part IV, which created 8 the Board. 9 We exercise authority over land-use 10 permitting and water license within the Wek'eezhii 11 management area under the MVRMA and the Northwest 12 Territories Water Act respectfully. We carry out this 13 important responsibility with the objective of regulating 14 the use of land and waters and deposit of waste so as to 15 provide for the conservation, development and utilization 16 of land and water resources in a manner that will provide 17 the optimum benefit, generally, for all Canadians, and in 18 particular, for residents of its management area. 19 At this point, I would like to introduce 20 the other Board members. Joyce Rabesca is a Federal 21 appointee to the Board nominated by the GNWT; Alfonz 22 Nitsiza and Joseph Judas sitting beside him, are both 23 Tlicho Government appointees. I was appointed by the 24 Board and have been appointed both by the Federal and 25 Tlicho Government as Chair of the Board.

1 Over the next two (2) days, the Wek'eezhii 2 Lands and Water Board will conduct a hearing constituted 3 under section 1 -- section 21 of the NWT Waters Act to 4 hear evidence and arguments relating to DDMI's 5 application for a water license, focussing on issues 6 related to ammonia. 7 Water license N7L21645 expires on August 8 the 31st, 2007. DDMI submitted the license renewal 9 application for N7L21645 on August the 8th, 2005. DDMI 10 has not requested any changes to the condition of 11 N7L21645 and has requested a term of fifteen (15) years. 12 At the time of application, the MacKenzie 13 Valley Lands and Water Board assigned a new file number 14 to water license, MV2005-L20009, sent the application out 15 for review and held internal technical sessions. 16 On February the 8th, 2006, the MacKenzie 17 Valley Lands and Water Board determined the Diavik's 18 Mining at Lac de Gras do not fall under section 1031 of 19 the MacKenzie Valley Resource Management Act and 20 therefore, water license N7L21645 fell under the 21 jurisdiction of the WLWB. 22 On March 14 and 15th the WLWB met to 23 review the water licence renewal workplan. At that time 24 the Board determined that progress needed to be made in 25 the areas of the Ammonia Record of Management and the

1 development of revised Aquatic Effects Monitoring Plan 2 before the Board could hold a hearing. 3 Following the submission of Ammonia 4 Management Plan and revised AEMP, the public hearing for 5 the application was held in Behchoko on November the 10th 6 to the 14th, 2006. 7 On December the 4th, 2006 the Board issued 8 its reason for decision adjourning the hearing and the 9 issuance of the water licence until significant progress 10 was made on the ammonia issue and revised AEMP was 11 approved. A work plan was developed and issued which 12 included processes to revise the AEMP based on a Board- 13 developed terms of reference and the appointment of an 14 ammonia expert panel mandated with providing advice and 15 recommendations related to ammonia management options. 16 During the course of the next few months 17 we recognize that a great deal of work under some 18 extremely tight timeframes have been carried out in order 19 to implement the work plan. 20 We thank you for all your hard work. We 21 have come a long ways. The Board has remained engaged 22 throughout the processes and have received regular 23 updates from our staff and made a number of decisions and 24 directives. 25 As a result of the work carried out by the

1 Ammonia Panel and the legal questions raised by Diavik 2 relating to the study of -- relating to the study of the 3 Ammonia effluent quality criteria, the Board decided to 4 reconvene the Hearing so that it could hear the evidence 5 and arguments relating to the subject. 6 The Board is aware of the concern of some 7 parties regarding the scope of this Hearing but at this 8 point we affirm that the scope of this Hearing is to hear 9 the viewpoints of the proponents, Intervenors, and expert 10 panels on issues relating to the Ammonia EQC and the 11 Ammonia Management Plan. 12 A process is in place to review the AEMP 13 and this process is ongoing. The Board assures all 14 parties that it will review all submissions and evidence 15 presented to us on this issue of the AEMP in accordance 16 with the work plan. We will make our decision on the way 17 forward for this program at our meeting in late June. 18 Following the Board's April 19th decision 19 to reconvene the hearing on the ammonia issues, the Board 20 requested interventions by May the 23rd, 2007. 21 Intervention were received from the Tlicho Government and 22 Indian and Northern Affairs Canada. Other parties 23 indicated their intention to attend and ask questions. 24 The Board has accommodated these requests. 25 Diavik responded to the intervention on

1 May the 30th. The expert panels also submitted its 2 presentation to the Board which was made available to the 3 Intervenors on May the 25th. 4 Please note that these proceedings are 5 being recorded and will be translated later. Therefore, 6 I ask that when you speak for the first time or when 7 requested, please state your name and who you represent. 8 Also I ask that you be mindful that we also have 9 interpreters and these proceedings are being translated 10 so please pace yourself accordingly. 11 The order of proceedings will be as 12 follows: The Board will first of all hear from the 13 Ammonia panel who will summarize their work and their 14 findings. Each Intervenor which includes all Intervenors 15 from the first hearing, the company, members of the 16 public, Board staff, and the Board will have the 17 opportunity to ask questions of the panel. 18 Once the Ammonia panel's presentation and 19 questioning is complete, the order of presentation will 20 be as follows: The company followed by two (2) 21 Intervenors that filed submissions. Each of these 22 presentations will also be subject to questions. An 23 opportunity will be provided for the general public to 24 make presentations and statements before 4:00 p.m. and 25 5:00 p.m. today. If you would like to make a

1 presentation and are not currently registered, please 2 fill in the form available from the registration table. 3 The Board wants this hearing to be as -- 4 as informal as possible. However, as a quasi judicial 5 body, we are bound by the rules of procedural fairness 6 and, as the Chair, I am responsible for the conduct of 7 this hearing. And we ask that all comments and any 8 requests be addressed through the Chair. 9 Once everyone has had the opportunity to 10 speak, the proponent will then have an opportunity to 11 present a reply. The parties and then the proponent will 12 have an opportunity to present closing comments. 13 Following that, the hearing will come to a close. 14 I would like to take a moment to introduce 15 members of our staff and the expert panels. First of 16 all, our Executive Director for the Board, Zabey Nevitt; 17 Technical Coordinator, Patty Ewaschuk; Administrative 18 Coordinator, Patty Magrum; Regulatory Technician, Roberta 19 Judas, Regulatory Technician, Martha Kodzin and our legal 20 counsel, John Donihee. 21 Our technical support from Gartner Lee is 22 Eric Denholm. Our translators are Francis Zoe and Mary- 23 Rose Sunberg for the Tlicho. And in Chipewyan we have 24 Bertha and Archie Catholique. 25 I am also pleased to introduce the Ammonia

1 Expert panel, Dr. David Koren is an ammonia treatment 2 expert. He holds a PhD in Chemical Engineering, an MSd 3 in Chemical Engineering and a BSc in Extractive 4 Meteorological. Dr. Koren is currently the manager of 5 the Mine Effluent Program at CANMET's Mining and Mineral 6 Science Laboratory. 7 Adrian Brown is a expert in mine water 8 management. He has a bachelor's degree in civil 9 engineering, mastering engineer science and an MBA in 10 administration. Adrian is currently the president of 11 Adrian Brown's Consultant, a company that specializes in 12 the solution of groundwater and related earth science 13 problems in mining and other fields. 14 Dr. Terry Matts is an explosive expert. 15 Dr. Matts has a PSc in chemistry, a PhD in molecular 16 science and over thirty-five (35) years experience 17 working in the explosive field for industry and now in 18 consulting. 19 The CVs of these gentlemen were circulated 20 to all parties in the lead-up to choosing the ammonia 21 panel. They were retained because of their expertise and 22 for the purposes of this hearing, unless any party 23 expresses a concern, the Board intends to treat them as 24 experts and hear opinion evidence from them. 25 These hearings are scheduled from 9:00

1 a.m. to 5:30 p.m. today and 9:00 a.m. to 2:30 p.m. 2 tomorrow. We will be breaking for lunch and taking 3 appropriate rest breaks. We have coffee and refreshments 4 at the back of the room, so please help yourselves. 5 Before we proceed with the presentation of 6 the expert panel, I would like the spokesperson or 7 counsel for each of the interveners to identify 8 themselves and their respected organization. Thank you, 9 and now to the expert panels. 10 MR. JOHN DONIHEE: Thank you, Madam 11 Chair. My name is John Donihee. I'm legal counsel to 12 the Wek'eezhii Land and Water Board. 13 MR. GORD MACDONALD: Gord Macdonald with 14 Diavik. I'll be the lead representative for Diavik. 15 THE CHAIRPERSON: Okay, thank you. And 16 now to the expert panel. Dr. Matts...? 17 18 (BRIEF PAUSE) 19 20 THE CHAIRPERSON: Can we get the 21 Intervenors to also introduce themselves; Tlicho 22 representative and Indian Affairs? Massi. 23 MR. EDDIE ERASMUS: Eddie Erasmus, Tlicho 24 Government. 25 MR. ARTHUR PAPE: Arthur Pape, legal

1 counsel for the Tlicho Government. 2 MR. DON MACDONALD: Don MacDonald, Tlicho 3 Government. 4 DR. KATHY RACHER: My name is Dr. Kathy 5 Racher with Indian Northern Affairs. I'll be the lead 6 representative for INAC. With me as legal counsel is Mr. 7 Scott Duke from Justice Canada, an expert witness, Susan 8 Roe. We have David Livingstone of -- Director of 9 Renewable Resources with us, Charlotte Henry as a member 10 of the Renewable Resources Directorate and Catherine 11 Mallet as a member of the Renewable Resources Directorate 12 also. Thank you. 13 14 PRESENTATION BY WLWB EXPERT PANEL: 15 DR. TERRY MATTS: Good morning. Madam 16 Chairperson, panel members, ladies and gentlemen. I'd 17 like to start the presentation for the review of the 18 Ammonia Management Plan and the presentation of our 19 recommendations. 20 First, I should introduce the -- the 21 time line to fill in the program that Madam Chairman has 22 already mentioned. 23 The panel was appointed by the Board to 24 review Diavik's Ammonia Management Plan after their 25 decision last December. The time line was quite tight,

1 the panel was selected in late December, they came to 2 Yellowknife in early January for briefing and also went 3 to the mine site to see the conditions there. The 4 research and the report was done throughout January and 5 we submitted the report in early February. 6 The stakeholders then were able to look at 7 this report and our recommendations and to make comments 8 on them. This was towards the end of February. The 9 panel then responded to their comments in March and the 10 stakeholders and interested parties had another 11 opportunity to make comments. So what I wanted to 12 emphasize here is, there's been a lot of consultation 13 after the report was first presented. 14 The makeup of the panel, we've already 15 been introduced, but Terry Matts, that's me, I'll be do - 16 - doing the explosives handling and use, David Koren, the 17 water treatment, Adrian Brown, the water management. And 18 each panel member will make a short presentation on their 19 area of expertise. So I get to start. So maybe it'd be 20 a good idea to just discuss how this ammonia gets into 21 the mine water. 22 Well, it virtually all comes from the 23 explosives, very few other sources of ammonia. The only 24 other significant one (1) would be fertilizer and I don't 25 think that Diavik uses any of that, so it all has to be

1 coming from the explosives and they have to use 2 explosives to break the rock, there isn't any other 3 practical way. 4 The major ingredient in the explosives 5 that Diavik uses is called ammonium nitrate. This 6 ammonium nitrate is an industrial material that is very 7 soluble in water. When it goes into water, this solid 8 material dissolves, but it also breaks up into two (2) 9 parts. It breaks up into something called an ammonium 10 ion, which chemists call NH4 plus and the nitrate ion, 11 which chemist designate NO3 minus. 12 So these are the forms that exis -- exist 13 in solution. There's a further possibility that the 14 ammonium can further dissociate into free ammonia, NH3 15 and hydrogen ion, 'H' plus. This doesn't happen to a 16 large extent in Lac de Gras because the lake is cold and 17 it's also fairly neutral in PH. The more alkaline a 18 water body is the more free ammonia is produced and the 19 free ammonia is the component that we are most concerned 20 about because it is the most toxic of the three (3) 21 possibilities. 22 You might ask the question, well, why do 23 we have to use ammonium nitrate, you know, this is funny 24 stuff. I've heard of all other sorts of explosives. Why 25 can't we use one (1) of those and avoid this whole

1 problem? 2 Anything else would contain things that 3 you've heard of like TNT, nitroglycerine, perchlorate 4 salts and various other things. 5 But all of these alternatives are much 6 worse than ammonium nitrate. They're more dangerous 7 pollutants. They're hazardous to transport, hazardous to 8 mix into explosives, hazardous to handle, and also 9 they're much more expensive. 10 So really there isn't an alternative to 11 ammonium nitrate for the major ingredient in explosives. 12 And Diavik use a form of ammonium nitrate explosive 13 called an "emulsion" and this is the most water resistant 14 type of explosive you can make that's based on ammonium 15 nitrate. So really the bottom line is they're using the 16 best material that they can at the moment. There isn't 17 an alternative. 18 So how do you achieve the best effluent 19 quality criteria? Well, the panel agrees and I think 20 everybody else does, too, that the best way of minimizing 21 ammonia and these other things in the water is to stop 22 them getting into the water in the first place. It's 23 much better than trying to treat them later or trying to 24 dilute them so the levels are very low. 25 Now, there are two (2) major mechanisms by

1 which the ammonium nitrate can be lost from the 2 explosives. One (1) is explosives malfunction in some 3 ways; in other words the explosive in the detonation 4 doesn't get completely consumed so some of it is left 5 behind. 6 The other way, and this I think operates 7 quite a lot at Diavik, is just direct leaching by water. 8 The open pit at Diavik is very wet particularly at the 9 bottom because of its location below the lake level and 10 because there is a major fault which admits water into 11 the pit. So even though these explosives are water 12 resistant, they're not completely waterproof. 13 We don't believe that spillage is an 14 issue; that's another way that ammonium nitrate can 15 possibly get into water is just careless handling where 16 it is spilled on the ground. We don't think that this is 17 a problem. We think that the -- the procedures that are 18 used are very good. 19 So there are basically two (2) sets of 20 mitigation measures. Some of them were suggested by 21 Diavik, some by Golder Associates, a consultant, and 22 there have been a couple also introduced by the panel. 23 So the first set of mitigation measures actually attacks 24 this possible problem of explosives malfunction. 25 Just to give you an idea of what's

1 involved in -- in putting explosives into a borehole, 2 this is very similar to many open pit mines but 3 particularly relevant to Diavik. If you look at this 4 diagram, this is just a -- a cross-section of a borehole. 5 These boreholes are approximately 10 inches diameter and 6 they can be up to 10 metres deep in most cases or some 20 7 metres deep so they're very deep. 8 Whenever you drill a hole, you always get 9 some sludge at the bottom and initially they're usually 10 filled with water. Now, one (1) way of guaranteeing that 11 an explosive detonates with complete reliability is to 12 put in two (2) different means of actually initiating 13 that explosive. This explosive is quite insensitive so 14 it will not detonate just from a detonator. You have to 15 use something intermediate which is called a booster, 16 those red squares which are indicated there. 17 So the -- the firing signal comes down 18 these tubes. There's a detonator inserted into the 19 booster, the detonator fires and that fires the booster, 20 which is about 1 pound of TNT and that then has enough 21 energy to detonate the rest of the emulsion explosives. 22 So it is obviously a guarantee, extra 23 insurance, if you put two (2) of these things in the hole 24 to make absolutely sure that the hole is detonate. I 25 won't get into all the mechanisms of how it can fail, but

1 there are several. Another suggested remediation 2 measure which has already been introduced by Diavik is 3 just to improve loading practices. 4 As I mentioned, when these boreholes are 5 drilled, they -- most of them immediately fill with 6 water. The way they are loaded is that a large truck 7 full of emulsion explosive comes along, a hose -- a big 8 fat hose about 3 inches diameter, is lowered into the 9 hole right down to the bottom and then they start to 10 come, the emulsion explosive, from the bottom of the 11 hole. 12 This emulsion explosive is heavier than 13 water, so what happens is, as you pump the emulsion, the 14 water rises and comes out of the top of the hole, so the 15 emulsion explosive displaces the water out of the hole if 16 you load it carefully. There are several things that can 17 happen if you're careless. 18 One (1) is that you can mix some of the 19 explosive with the sludge at the bottom of the hole, 20 which makes it less sensitive and then there's a 21 possibility that it won't detonate properly. If you pull 22 the hose out of the hole too fast, you can sometimes mix 23 up the emulsion with water, which also doesn't do 24 anything for its properties. Again, it might not 25 function properly.

1 Sometimes the boosters can get buried in 2 the sludge at the bottom of the hole. You have to be 3 careful how you dispose of those, or sometimes even can 4 float up on top of the emulsion column and sit at the 5 top, which also does not guarantee full detonation. So 6 there are many things that can go wrong. 7 The job of a blaster in an open pit mine 8 is not a pleasant one. It's a dirty job, it's repetitive 9 and, of course, in the winter it's also very cold and the 10 exposure factor is in there, so it's very important that 11 the blasting crew understand that they have to do things 12 correctly and that they do them on a systematic basis and 13 that they're well supervised, as well. 14 One (1) other possibility that can lead to 15 some ammonium nitrate loss is the stemming practices. 16 You'll notice there's this material at the top of the 17 borehole called stemming. What this is, is crushed rock, 18 large gravel if you wanted the analogy. It's typically 19 about one-inch chunks of rock and it's the cork in the 20 bottle. 21 If you load explosives right to the top of 22 the hole, you'll get an enormous loss of energy, you'll 23 get a lot of noise and you'll get a lot of fly rock 24 blowing around and it doesn't do anything to the breakage 25 of the rock, it's just a waste. So you only load the

1 explosives up maybe half (1/2) or two-thirds (2/3) of the 2 depth of the hole and then into the top of the hole, 3 you'll load this gravel. 4 Well, two (2) things can go wrong there. 5 If you load it in too early, it's possible that the -- it 6 will lock in place and stop the gassing reaction taking 7 place in the emulsion which sensitizes the emulsion, so 8 it's a useful explosive. 9 Also, the emulsion is very hot and very 10 fluid. If you're in a hole which is dry, which has no 11 water at the top of it and you shovel in or push in a lot 12 of this stemming material, it can penetrate into the top 13 surface of the emulsion and also lead to some part of it 14 not detonating properly and then it ends up in the mine 15 water. 16 So then there are some mitigation measures 17 which will reduce the amount of ammonium nitrate which 18 gets leached from the explosive by water. One (1) of 19 them is to use -- change the formula of the explosive. 20 The initial explosive used by Diavik had 35 percent of 21 dry ammonium nitrate mixed in with it. The more dry 22 materials that are mixed into the emulsion the less water 23 resistant it is and the more ammonium nitrate can get 24 leached. 25 So that was reduced from 35 percent to 20

1 percent last September. So that measure's been in place 2 quite a while. Consideration was also given to reducing 3 it to zero; that would not have helped very much 4 according to laboratory tests and also operationally 5 would not have worked very well. It would have reduced 6 the capacity of the explosive trucks. So that one (1) is 7 introduced and been going over six (6) months. 8 Another possibility is to increase the 9 viscosity, the thickness of the emulsion. This has two 10 (2) benefits. One (1) is it becomes more water 11 resistant; the other is that it tends not to penetrate 12 into any cracks that surround the borehole. If you get 13 small amounts penetrating into cracks, it doesn't 14 detonate, it just gets left behind after the detonation 15 and therefore it breaks down and ends up in the mine 16 water so increasing the viscosity has -- has two (2) 17 benefits. That has already been done. I think that went 18 back to you last October. 19 One (1) other possibility is to reduce 20 what is called the "sleep time" of the explosives in the 21 hole. This is just the -- the industry term for how long 22 you leave the explosives in the borehole before you shoot 23 the blast and it's pretty obvious that the longer you 24 leave it in the borehole, the more chance the water has 25 to attack it and to leach some ammonium nitrate out of

1 it. 2 The mine has already reduced it to maximum 3 of four (4) days I believe. The panel would like to see 4 that reduced even more but it obviously has a direct 5 input into the -- the amount of ammonium nitrate that -- 6 that gets left in the mine water. 7 Now, the effect of these mitigation 8 measures. It's very frustrating to quantify them. All 9 of these measures are good sense but there's nothing in 10 the literature and I could find no specific figures from 11 many of my personal contacts that if you introduce any of 12 these measures it will improve the ammonium nitrate lost 13 by "X" percent. 14 So what we had to do is to estimate and I 15 agree these estimates are not precise. Some of them may 16 be optimistic and in some cases we may be underestimating 17 their benefit. 18 It's very difficult to know, but all the 19 things that we have recommended go back to a baseline of 20 before September 2006, before any of these mitigation 21 measures were introduced. But whatever, none of these 22 changes can make things worse; they're all good practices 23 that'll make the -- the detonation more efficient -- the 24 blasting more efficient -- and they cannot possibly 25 increase the amount of ammonium nitrate that gets into

1 the mine water. 2 Now, one (1) thing did concern the panel 3 and that is what we call the spikes that you see in the 4 ammonium nitrate content in the -- in the mine water. 5 This is a graph of the water coming out of the A154 pit 6 last summer. And let me emphasize, this is not what is 7 discharged into Lac de Gras because after this it goes 8 into the North Inlet and it's diluted by a lot of water 9 and the various natural processes that decrease the 10 amount of ammonia. 11 However, you can see that through most 12 June and July there was a variation in the amount of 13 ammonia in the water but, you know, it's a fairly low 14 level and right at the end of July we get a sudden spike; 15 it falls back to the base level. Then we get another 16 spike back to the base level and then we get another big 17 spike. 18 And you might say, well, is this really 19 important because all of this water gets further diluted 20 and it's held in the North Inlet so it doesn't really 21 affect the average too badly of what's discharged into 22 the lake. 23 However, it still represents a lot of 24 ammonium nitrate loss -- tens of tons, maybe even 25 hundreds of tons over a year or more, so the panel

1 thought that this was important. Seems to be associated 2 with very wet blasts at the bottom of the pit. 3 Diavik do things called sump blasts. 4 These are where they have to go down to a lower level in 5 the pit, so they actually have to blast a big hole down 6 into the rock. 7 Also there is this feature called Dewey's 8 Fault, which is the major one letting water into the pit, 9 so any blasts in the vicinity of that tend to be very wet 10 and it seems to be correlated with blasts in this area 11 when you get these spikes. So they do -- they do 12 contribute quite a lot of ammonia nitrate in the mine 13 water. 14 So the panel considered, is there any 15 possible way beyond the other measures we've suggested, 16 how you can control these? 17 The only way that we -- we know that might 18 work is to try to separate the explosive completely from 19 the water and you can use a concept, something called a 20 plastic borehole liner. Now, these are not rare 21 commodities, they are often used in this type of mining, 22 but what usually happens with them is they're used for 23 dry explosives that have no water resistence, not for the 24 emulsion explosives that Diavik use. 25 If you could use it, it would protect the

1 emulsion completely from the water because if it's in a 2 polyethylene liner, the water can't get at it, so it 3 cannot possibly leach it. It would prevent any loss of 4 emulsion going into cracks. We don't know how serious 5 this problem is at Diavik, but some of it will be 6 happening, some emulsion will go into cracks, will not 7 detonate, breakdown or land up in the mine water. 8 And the other thing is, because the 9 emulsion will then be in pristine condition, it has been 10 completely unaffected by water, by stemming material or 11 anything like that, it should detonate completely every 12 time. So there are many benefits to using a borehole 13 liner. 14 The only problem is it might not be 15 practical in the conditions at Diavik because the very 16 holes that would benefit most from this, the sump blast, 17 the ones at Dewey's Fault, the water is flowing so fast 18 you cannot pump the water out. 19 The normal way these liners are installed 20 is you bring along a pump, you pump the water out and 21 then you put the liner in the hole. These sump blasts 22 and very wet blasts, you can't do that. As fast as you 23 pump the water out, the water comes back in again. 24 The other practical problem would be, 25 particularly in the winter, these liners are plastic, so

1 at forty (40) below or whatever, they'll get very stiff, 2 they'll get very brittle and they'll be very difficult to 3 load in the borehole. 4 So to use them would need a lot of 5 experimentation because there's nothing written up in the 6 literature telling you how you can do this. I phoned 7 many people and 80 percent of them said, what do you want 8 to do that for, the whole point of using emulsion is so 9 you don't have to use liners. 10 A couple said, oh, yeah, we've -- we've 11 heard of that being done, but when pressed, they didn't 12 know exactly where it had been done, who had done it, if 13 it'd have ever been written up. Maybe it's been tried 14 fifty (50) times and didn't work, so nobody published the 15 results. People don't like to publish negative results. 16 So this is a concept, but whether it's practical, we 17 don't know. 18 Whatever, there will be operational 19 difficulties, it will slow down the loading, it will mean 20 extra labour, it will mean extra costs. So the panel is 21 not suggesting that this be done in every borehole, we're 22 only suggesting that this be considered for the wettest 23 parts of the pit, where the water flow is the highest and 24 where you get these spike in ammonium nitrate into the 25 mine water.

1 So now I'll hand over to David Koren and 2 he will talk about the treatment options for ammonia in 3 mine water. 4 DR. DAVID KOREN: Thank you very much, 5 Terry. As mentioned, I'll be talking about the ammonia 6 treatment options that were part of the -- the panel 7 report. 8 First of all I'd like to say a few words 9 about the methodology or the, I guess, the -- the 10 procedure that I followed in reviewing the treatment 11 options for this site. First of all, reviewed all the 12 documentation that was submitted by DDMI and its various 13 subcontractors and paid, in particular, attention to the 14 treatment technology reviews that were performed. 15 I then went on to do a literature review 16 or library search at our own library in -- in Ottawa, and 17 this was to ensure that no information was missed or any 18 technologies overlooked with respect to ammonia 19 treatment. 20 I then went on to examine the screening 21 process that DDMI performed and went on to perform a 22 similar analysis myself. And finally looked at the 23 recommendations as a result of this analysis. 24 As a result of a literature review, it was 25 found that reviewing all the documents that were

1 submitted that the reviews were fairly thorough. There 2 were no technologies missed. All the major technologies 3 were discussed; brought up. 4 There were a few deficiencies as far as I 5 felt in -- in terms of costing information, especially 6 with respect to some of the biological or natural 7 treatment processes that were discussed. 8 As well, there was not a lot of 9 information on small-scale treatment. By "small scale," 10 I mean less than 5,000 cubic metres per day. And this is 11 probably, because this was not probably part of the 12 initial mandate of the -- of the reports. 13 As well, there was some missing 14 information -- information that I was aware of. There's 15 actually a biological treatment plant for ammonia and 16 thiocyanate that's operating in northern Quebec 17 presently. It's operating fairly successfully, and that 18 was not mentioned in the reports so I added some 19 information about that, as well as some other information 20 that was -- came out of the work of the Ammonia Control 21 Consortium and -- which took place in the mid 1990s, of 22 which I was a part. 23 Some added information, as well, for 24 natural degradation that I thought was relevant and very 25 interesting to -- the analysis.

1 So looking at the analysis that DDMI 2 performed; initially, they found quite a number of 3 processes -- about thirteen (13) -- that could achieve 4 the original effluent criteria of two (2) and four (4) 5 ppm. Some of these were commercial processes, others 6 were non-commercial processes and some others were -- 7 were just basically at the research and development 8 stage. 9 Further in their analysis, they found that 10 all of these had a net negative environmental benefit 11 with the exception of enhancing -- enhanced natural 12 degradation within the north inlet as well as perhaps the 13 use of floating cattail mats. 14 In the analysis that I performed, it was 15 fairly consistent, the results, with that of DDMI and the 16 major finding is really that enhanced natural degradation 17 within the North Inlet is the most practical option to be 18 done at the site. 19 Based on literature, we could expect an 20 increase in the present degradation rates that are 21 occurring, but as well I found there was not a lot of 22 information about use of this technology in northern 23 climates. So it's really felt that further study would 24 be recommended. 25 So there was no credits at all added to

1 the model for these other technologies. We did add a 2 credit; a 20 percent increase is considered conservative 3 based on expansion of the North Inlet which is being 4 planned. So, as part of the model, we increased the 5 natural degradation after 2007 once the retention time 6 within that pond was said to be increased. This would 7 increase the amount of time for the microbiology to occur 8 within the pond to degrade the ammonia naturally. 9 So what this means for the EQC and the 10 model; increased degradation from 17 to about 20.4 tonnes 11 per year. This is, again, theoretical and this 12 degradation occurs only when there is no ice on the pond 13 from April to October. 14 And, because of this, this does not really 15 change the EQC since it's not effective throughout the 16 total year. It does serve as an important protective 17 mechanism and it works fairly efficiently in the spring, 18 the summer and the fall period and degrades ammonia very, 19 very effectively. It can be very likely increased or 20 enhanced even further and especially for the periods in 21 the spring and the fall when the temperatures are a 22 little bit cooler and the processes are a bit slower. 23 So addition and perhaps some of these 24 other options such as floating cattails, use of aeration, 25 perhaps, or PH increase, nutrient addition and some of

1 these other options may be practical at the site. 2 So in terms of recommendations, it would 3 recommend that DDMI at least look at some of these 4 options to determine which ones would be practical and 5 which ones not to be performed at their site. 6 As well, it would be suggested that they 7 investigate as a contingency, other management -- ammonia 8 management strategies and some of these could include 9 temporal segregation. That would mean segregation or 10 separation of streams that are very low flow rates, but 11 ver -- contain very high amounts of ammonia, or its 12 separation of streams that perhaps from time to time 13 during the year, may contain higher ammonia 14 concentrations and may cause difficulty for the 15 degradation processes which occur naturally in North 16 Inlet. 17 As well, to look at perhaps some treatment 18 technologies kept -- that could deal with these very high 19 ammonia streams at very low flow rates. And by low flow 20 rates, I mean less than 5000 cubic metres per day. And 21 some of the technologies that could be looked at include 22 ion exchange, further biological processes that occur 23 indoors under optimized conditions or the use perhaps of 24 membrane technologies. 25 So I'll now hand it over to Adrian Brown

1 who will be looking at the water management aspects of 2 the panel report. 3 MR. ADRIAN BROWN: Madam Chair, Board 4 members, members of the public, Elders and Interveners, 5 my task in this work was to look first at the water 6 management system, the way in which water is handled by 7 the mine in its process of -- of mining, of removing 8 water from the mines so it will not be flooded and then 9 discharging it ultimately, for the most part, back into 10 Lac de Gras. 11 And then secondly, taking all of the -- 12 the inputs that you heard from the blasting and treatment 13 and water management and assembling them to see what that 14 means in terms of achieve of practically achievable 15 ammonia control by DDMI. I'll present both of these 16 together, if I may, because the water management portion 17 is really, I think, quite simple. 18 With respect to water management at the 19 Diavik project, this is an aerial photograph of the 20 project, or at least of the -- of most of it, with the 21 dark material being the lakes and the lighter material 22 being the land areas. As I know you're aware, mining has 23 taken place and will take place in a number of locations 24 and, as a result, will trigger water management mining, 25 water management activities.

1 I will not here deal with the treatment of 2 -- of -- and processing of the diamond materials 3 themselves, that's a separate water management system, 4 which in fact, is designed to have no discharge to Lac de 5 Gras, so I will omit that from -- from my discussions. 6 The water management system starts with 7 the A154 mine, currently mostly a surface mine, but with 8 current and future expansion to underground, and water 9 flows into that mine predominantly along an area known as 10 Dewey's Fault. This is, if you want to think of it, a 11 groundwater or a water conduit that delivers water to the 12 mining system basically from Lac de Gras and it delivers 13 it at a flow rate which is actually considerably greater 14 than had been expected and is quite significant as a -- 15 as a mining and operational problem. 16 For our purposes, one (1) of the problems 17 it creates is, that it floods the boreholes into which 18 blasting materials are put and that creates the ammonia 19 problem as described earlier by Terry Matts in his 20 presentation. The water management system collects that 21 water in the mine and pumps it out and delivers it to the 22 western end of North Inlet. 23 North Inlet is an artificial -- well, it's 24 an artificially enhanced containment zone that has a -- a 25 dam at the eastern end and backs water back up

1 essentially parallel with the airport at the site and 2 contains a very large amount of water; at current pumping 3 rates approximately a month or a little more's inventory 4 of water pumped from the mining system. 5 That water pumped to the east -- excuse me 6 -- the western end then flows slowly through the North 7 Inlet and ultimately discharges to Lac de Gras through a 8 treatment system which treats for phosphate and can -- 9 but as far as I know has not -- treat also for suspended 10 solids but does not treat for ammonia and the water is 11 discharged to Lac de Gras. 12 As the underground mine is developed from 13 the -- the 150 -- A-154 ore body, that water will be 14 added to this system. Currently the development of the 15 A148 ore body is -- is ongoing. That water will also be 16 delivered, we hope, if it's low enough flow into the 17 treatment system. And I apologize, this arrow is not on 18 my slide because it goes away. 19 In our evaluation -- it is our 20 recommendation that this be carefully considered as a way 21 to pump that water out of the discharge system and into 22 the -- the Kimberlite Treatment System because it would 23 be able to replace water which would otherwise be pumped 24 from the lake directly into that system. So that water 25 would not then be discharged.

1 So we -- the panel feels that this would 2 be a -- a water management enhancement providing the 3 inflow to the A148 mine is sufficiently low. And by 4 "sufficiently low," it looks to be about that same level 5 of perhaps 5,000 cubic metres per day or less. We don't 6 know and the mine doesn't know whether that is what the 7 inflow will be but I think we both suspect that the 8 inflow will be more, perhaps considerably more than that 9 making this technology, this water management option not 10 really very effective. 11 Presuming that that does not in fact 12 happen, the water from the A148 mine is now and will in 13 the future be delivered to the same discharge system and 14 will be pumped through the North Inlet and will flow to 15 Lac de Gras. 16 The third development which is at least 17 planned now and I believe going forward is the A21 mine 18 and its water management will be handled in the same way 19 presuming that the flows are sufficiently high to -- to 20 make it impractical to pump to the -- to the treatment 21 system they will also be pumped into the mine water 22 management system and discharged through North Inlet to 23 Lac de Gras. 24 So a very simple water management system 25 for mine water and very material for consideration of the

1 ammonia fate, what's going to happen to the ammonia. 2 This is the water management system that the panel used 3 in calculating what the appropriate discharge limits for 4 ammonia should be. 5 The actual quantities of flow from each of 6 those components is shown on this graph which I'm going 7 to put up now and it will appear over time. And this -- 8 this is a totalized graph starting at 2003 with a little 9 less than 10,000 cubic metres per day of water. 10 And this has risen in the A152 surface 11 mine to a little less than 20,000 cubic metres per day at 12 the time of our visit and is expected to drop quite 13 rapidly as the mining in the surface mine at this 14 location is completed and the underground mine will take 15 over the extraction of water from the surface mine. 16 The lighter blue to the right of the A152 17 surface mine is the contribution from the A418 surface 18 mine, which gets added on and we have made some 19 presumptions here about the flow, this shows a relatively 20 high flow to the A1 -- 418 mine, which is greater than 21 the anticipated flow based on -- on Diavik's 22 presentations, but we've included it because higher flow 23 generally means more difficulty with ammonium nitrate 24 control. 25 Likewise going to -- into the future, a

1 smaller flow is expected from the A21 surface mine when 2 it is developed around 2012 and from this year and 3 forward rapidly the underground mining component, the 4 light blue colour, will be the lion share of the water 5 that is coming to the mine, the mining complex, and needs 6 to be disposed of. 7 With respect to the ammonia now, the 8 picture is really quite similar, ammonia is developed in 9 each of the mining activities, surface water -- excuse 10 me, surface mining and underground mining and in respect 11 of the A154 mine, the location is the same and that 12 ammonia flows with the water that is extracted to North 13 Inlet is diluted within North Inlet as it flows through 14 it by other water and the water that is existing in North 15 Inlet. 16 Interestingly, as -- as David Koren has 17 pointed out, during its movement through the North Inlet 18 for most of the year there is an element of ammonia 19 destruction; that is, it gets turned from ammonia to 20 other products and as a result the quantity of ammonia, 21 the tonnage of ammonia, which discharges into Lac de Gras 22 from the eastern end of North Inlet is significantly 23 reduced. 24 By significantly, it is reduced to close 25 to zero (0) tons through the summer months and it is only

1 during the winter months, a couple, three (3) of the 2 winter months, that the full amount of ammonia which 3 enters at the west actually discharges to the east. 4 As the other mines are developed, they 5 will join this process. We're hoping that the ammonia 6 from the A148 mine, if the flow is low enough, will 7 actually be removed from the mining system, but in the 8 event that the flow is too great, it will join the 9 ammonia system in the way I have shown and also the A21 10 contribution of ammonia will also join that system. 11 So all of the mine-related ammonia will 12 pass through the exact same system. In evaluating the 13 EQC, this is the ammonia movement or the ammonia fate 14 concept which is built into the evaluation that we have 15 performed at an EQC. 16 The amounts of ammonium nitrate are 17 critical to our calculation and I think are also 18 interesting in and of themselves. 19 I'm showing here a graph that -- that 20 shows both the nitrate -- the ammonium nitrate use in the 21 mining complex as a whole and that is shown in, I believe 22 that's a red, reddish colour and peaks at a little over 23 ten thousand (10,000) tons of ammonium nitrate per year. 24 As you can see after the mining of first 25 the surface mine in the A148 and subsequently -- excuse

1 me, A154, which is the first peak declining then the next 2 peak that comes up is the A148 surface mine, for the most 3 part. And then the underground mining uses a great deal 4 less ammonium nitrate because it blasts a great deal less 5 rock, you don't have to take out all of the -- of the 6 overburden materials, you simply blast, for the most 7 part, Kimberlite material, so the quantity of rock being 8 handled is much less, the quantity of blasting agent is 9 correspondingly mes -- much less. 10 The final peak, around 2012 through 2015 11 is the surface mining as the ammonium nitrate used for 12 the surface mining of the A21 Mine currently proposed. 13 For the blasting to be effective, you 14 would hope and Diavik had been successful in making sure 15 that most of the ammonium nitrate goes to breaking rocks. 16 Very little of it gets dissolved and reports to the 17 ground -- to -- excuse me, to the mine water system. 18 I've shown this with the black line along 19 the very bottom axis of this. You can, at times, barely 20 see it. Currently this constitutes approximately 3 21 percent or three one-hundredths (3/100) of the total 22 amount of ammonium nitrate used. 23 And this black line that I'm showing on my 24 graph is the panel's assessment of how much loss there 25 will be from now on if the panel's proposed ammonium

1 control strategies are successfully adopted by -- or 2 adopted with average success by Diavik. 3 And as you can see, as you go to the 4 further out years into the future, the amount of actual 5 ammonium nitrate is very small indeed for two (2) 6 reasons; successful control by Diavik and greatly reduced 7 ammonium nitrate use because of the under -- the switch 8 to predominantly underground mining. 9 In a nutshell, the problem will in any 10 event largely go away as a result of the greatly reduced 11 ammonium nitrate and the greatly increased expected flow 12 giving low concentrations. 13 The panel took all of the flow 14 information, all of the ammonium use information; both 15 the past and the future, and assembled an ammonium 16 nitrate predictive model which was a calculation to work 17 out what in the future will happen to ammonium 18 concentrations under a series of different assumptions. 19 One (1) of the assumptions was that 20 nothing would be done. Other assumptions related to 21 adopting both the -- the ammonium blasting management 22 strategies that Terry has described and that the panel is 23 proposing, and also the treatment alternatives which were 24 discussed by Dr. Koren. 25 So, we took both of those. We used the

1 experience from 2003 up till now to make sure that our 2 model worked. That is the model covers that period and 3 predicts with acceptable accuracy what has happened in 4 the past so we have some confidence that when we predict 5 into the future, our model will also appropriately and 6 accurately predict the future. 7 We've taken account of the uncertainties, 8 statistically, within the model to make sure that we 9 cover the understandable variation due to weather, due to 10 the spikes which Terry discussed in his presentation, and 11 other variables over which we do not expect that Diavik 12 will have any control. So we've taken those into 13 account, and I'll show you the effects of those. 14 We ran the model from 2003 to 2025, 15 covering the past, the present and the future. And this 16 is an example on a year-by-year average basis of the 17 results. And this is an analysis performed -- it's 18 actually our final analysis. And I want to go through it 19 in a little detail if I may. 20 Vertically, I'm showing the concentration 21 expected in the discharge to Lac de Gras. And on the 22 horizontal axis, I am showing time. The red line, the 23 lowest of the three (3) lines, is the predicted average 24 annual ammonium concentration. If you take the average 25 of all of the discharges in any given year, this is the

1 concentration. 2 You can see that the peak is approximately 3 two and a half (2 1/2) milligrams per litre average 4 ammonium dropping very rapidly in the future to 5 essentially close to detection levels. This is the 6 average for the year. 7 All of the data that has been collected 8 shows that the average is not, however, a good indication 9 of the maximum which is the -- the -- the important 10 characteristic of the ammonia. The blue line shows the 11 monthly maximum for the project, and you can see it's -- 12 it's approximately double or a little more the average 13 for the year. So on any -- on the worst month that the - 14 - the concentration will reach approximately 5 mg per 15 litre, about now, and by 2008 will have dropped to about 16 2 mg per litre and for much of the rest of the project 17 will be well below 1 mg per litre. 18 Finally, we have to allow for the fact 19 that there are, in a 25-year mine history, there are many 20 things that will cause spikes and will cause 21 uncertainties. We've taken all of the information about 22 uncertainty from the approximately four (4) years of 23 operation of this system and worked out how big that 24 uncertainty would be for a full 25-year project. 25 The red line provides a 99.9923 percent

1 chance that Diavik, if they adopt the panel's 2 recommendations for ammonia control, will never, in the 3 whole history of the project, exceed the red line. So 4 the concentration of ammonia should never, on any day or 5 any month, exceed this line with average adoption of the 6 panel's recommended ammonium control activities, many of 7 which, I would point out, and Terry pointed out, have 8 already been adopted and implemented by Diavik. 9 To show you an example of the EQC setting 10 process that we've used, I have put a line at 2008 11 vertically. Where that intersects the red line, the 12 maximum that can ever happen, it produces an EQC estimate 13 for 2008 and beyond, a little over 5 mg per litre. 14 The Board -- the panel is recommending 15 raising that to six (6) so that it's an even number, and 16 that is where the 6 mg per litre EQC, on a monthly basis, 17 for the rest of the project from 2008 on comes from, as 18 an example of our process. 19 To reiterate, we believe this has a very 20 high probability of being able to be met at all times by 21 the mine, assuming, as I say, average effectiveness in 22 implementing the ammonia control strategies. 23 We did this also on a daily basis, and the 24 results of the project evaluation are that we chose to 25 divide the EQC into one for the remainder of this year,

1 where implementation of some of the remedies or some of 2 the control strategies, particularly the borehole 3 blasting, excuse me, the blast hole liner strategy may be 4 difficult for Diavik to implement during the course of 5 this year. 6 And so we are recommending a never- 7 exceeded 8 mg per litre on a 30-day basis, and 16 mg per 8 litre on a one-day basis, an instantaneous single-sample 9 limit, dropping to 6 mg per litre and 12 mg per litre for 10 the corresponding period from the end of this year or the 11 beginning of 2008, for the balance of the project. 12 We believe that these are technically 13 supportable, are robust in the sense that the mine can 14 readily meet the requirements, providing they do, in 15 fact, maintain a practical control of ammonium. And 16 these are the panel's recommended EQC for ammonia at the 17 Diavik side. Thank you. 18 THE CHAIRPERSON: We'll have a 10, 15 19 minutes break. 20 21 --- Upon recessing at 10:15 a.m. 22 --- Upon resuming at 10:45 a.m. 23 24 THE CHAIRPERSON: The panel has made 25 their presentation. We are now in the question mode, so

1 I will ask the first party, Indian Affairs, to ask any 2 question of the panel. 3 4 QUESTION PERIOD: 5 DR. KATHY RACHER: Thank you, Madam 6 Chair. It's Dr. Kathy Racher for Indian and Northern 7 Affairs. Sorry to disappoint the panel, but we have no 8 questions for you today. 9 THE CHAIRPERSON: Tlicho 10 representative...? Tlicho Government...? 11 MR. ARTHUR PAPE: We'll try and do better 12 than that. Dr. Matts, let me start with you, if I may. 13 You've talked about a number of mitigation measures to 14 decrease the amount of ammonium nitrate loss as a result 15 of the use of explosives in the mine. 16 And you've -- if I understand you 17 correctly, you've said that there are a number of such 18 measures that have been suggested by Diavik or their 19 consultants and that you agree with them. And the one 20 (1) where there's a disagreement involves the borehole 21 liners. 22 Before we get to that disagreement, would 23 you tell us, please, how many of these mitigation 24 measures for explosive techniques and so on, how many of 25 them have been either thought about or instituted since

1 2003 when the crisis about ammonia emission levels first 2 began? 3 DR. TERRY MATTS: As -- as far as I know, 4 there were none of these measures introduced until 5 September 2006. This was during the Golder Associates 6 study. They did a -- a study on ammonia loss mechanisms 7 at -- at Diavik. And I believe there must have been 8 discussions ongoing while this work was -- was going on. 9 And they were suggesting things at the time and Diavik 10 started to adopt them. 11 One (1) of the first was the reduction of 12 the solid ammonium nitrate content in the emulsion. I 13 believe before that -- that happened I think it was the 14 23rd of September, 2006. Diavik may be able to correct 15 me, but as far as I know, none of these mitigation 16 measures were used before that day. 17 MR. ARTHUR PAPE: So, let me see if I 18 understand and you're aware -- I can tell from your 19 summary that you're aware that the licence was amended in 20 2004 and a fairly elaborate program of measures was 21 instituted and made mandatory as a result of a mediated 22 agreement which involved or which required the company to 23 study new methods and develop a plan and -- and 24 ultimately to implement them. 25 So, it's my understanding - and I want to

1 know if it's your understanding - it's my understanding 2 that if it weren't for that mediated agreement and the 3 amendments to the licence, Diavik may never have changed 4 any of its explosive techniques. 5 DR. TERRY MATTS: You should probably ask 6 them rather than me. But, you know, you -- I think as I 7 explained during the -- during my presentation, any of 8 these mitigation measures that were suggested, there is 9 nothing reported anywhere that says how effective these 10 measures are. 11 There was nothing that I was able to find 12 that -- that -- that actually gave any sort of assurance 13 or quantification of how effective these mitigation 14 measures would be. I -- I think Diavik and the explosive 15 supplier would've concluded that we are using the most 16 water resistant form of explosives we can in the -- what 17 is the usual way. 18 And therefore, -- and at the time they 19 were also unsure or what the exactly the loss mechanism 20 was, so I think you probably have to ask them why they 21 didn't consider mitigation measures before the fall of 22 2006. 23 MR. ARTHUR PAPE: Well, just to close it 24 off though, from your perspective you haven't seen an 25 evidence that these mitigation measures were being

1 developed prior to 2004? 2 DR. TERRY MATTS: No, definitely not. 3 THE CHAIRPERSON: Excuse me, when you are 4 speaking into the mic, can you please identify yourself 5 because this session is being recorded and we need it for 6 the records. Massi. 7 DR. TERRY MATTS: Okay. 8 MR. ARTHUR PAPE: Now, let me ask you 9 something, Mr. -- Dr. Matts, about the disagreement, if 10 it is a dis -- it appears to be a disagreement, about the 11 practicality and the advisability of -- of attempting to 12 use borehole liners. You've said in -- in your report 13 that you thought it would require some experimentation to 14 -- to make this as effective as possible and to -- to 15 test out its practicality. 16 Is that -- is that -- do I understand you 17 correctly? 18 DR. TERRY MATTS: Yes. Terry Matts. 19 Yes, that is correct because there is no record anywhere 20 nor could I even find any advice from various people I 21 consulted of how this could be done because this is 22 unusual, this is not usual practice. 23 As I think I mentioned in my presentation, 24 the mind set in the industry is that if you are using 25 emulsion explosives, you do not need to use a liner, that

1 is why you use emulsion explosives. 2 MR. ARTHUR PAPE: Arthur Pape. And yet 3 if I understand your report, you're saying the -- the 4 benefit potentially from being able to use borehole 5 liners effectively, especially in the very wet holes, 6 you're saying that the benefit would be so substantial 7 that you, I -- I gather, are recommending that the 8 company try to find a way to make this work; do I 9 understand? 10 DR. TERRY MATTS: Yes, that is correct 11 because again as I -- as I said, if you can use a liner 12 you completely insulate the explosive which contains the 13 ammonium nitrate from the mine water, which is what 14 dissolves it and takes it away, but it is not usual 15 practice. In fact, as I said, I couldn't find any 16 reference to any mine using this or even in any 17 experiments. 18 There was some anecdotal information I 19 received and personal communications that yes, they'd 20 heard that this had been done, but where, how, I don't 21 know. 22 MR. ARTHUR PAPE: Now, I don't know what 23 kind of conversations have gone on on the side, but from 24 looking at your reports and Diavik's written responses, 25 it's my understanding that Diavik has no interest

1 whatsoever in pursuing this; is that your understanding? 2 DR. TERRY MATTS: Not what they've 3 written down. The -- they promise that they will start 4 experimentation as soon as the weather gets cold again in 5 the fall. 6 MR. ARTHUR PAPE: Why couldn't this be 7 experimented within the summer? Isn't that when the 8 spikes were occurring? 9 DR. TERRY MATTS: It could be, but it's 10 going to be a lot easier to do in the summer and also 11 from our understanding it's going to have less benefit in 12 the summer. But you are correct, at least the groundwork 13 could be done earlier. 14 MR. ARTHUR PAPE: You mentioned that if - 15 - if borehole liners are to be used, it may cause some 16 increase in time and expense. You have a long history of 17 working with explosives in the mining industry. 18 Can you give us some indication of how 19 serious an increase -- how substantial an increase in 20 time or costs might be occasioned by attempting to do 21 this? 22 DR. TERRY MATTS: It's very difficult to 23 do that. I know that it would certainly slow them down. 24 Under the best circumstances, it would at least half the 25 rate at which they could load boreholes. I suspect that,

1 and once the conditions start to become severe, the 2 effect would be a lot more drastic. 3 Right now you can load a borehole probably 4 in say five (5) minutes. It's going to take a lot longer 5 than that ten (10) minutes, fifteen (15) minutes, et 6 cetera. Can they possibly keep up production by doing 7 this, what extra labour is, will -- will be required and 8 we're still looking at the -- the practical difficulties, 9 can it even by done in the winter when the weather is 10 cold and these borehole liners are going to be very stiff 11 and very brittle? 12 It may be possible to do it in the summer 13 and then they -- they might find, by the time the weather 14 gets cold, it becomes impossible or it gets so slow it 15 just -- they -- they just cannot keep up any sort of 16 production. 17 MR. ARTHUR PAPE: Have you considered 18 whether -- what it would take for a bonafide experiment 19 on this basis in -- in terms of the commitment or the 20 willingness of either managers or explosive crews to make 21 this -- to find a way to make it work? 22 DR. TERRY MATTS: Only they -- they -- 23 they -- it takes commitment to do something all the way 24 from the top down -- all the way down and particularly 25 the blasting crews who have to actually do it. They have

1 to understand why it is so important and they have to buy 2 into the whole process. It's really an exercise in -- in 3 -- in good supervision. 4 I cannot really give you any more 5 indication than that, but it will need experimentation 6 because I can foresee many, many problems. I don't want 7 to get into all the problems right now, but, you know, 8 logistically, this is not going to be easy. The whole 9 methodology of using borehole liners is, you take the 10 water out of the hole first and then it is not too 11 difficult to deploy the liner. 12 If you now try to put it into a hole full 13 of water, immediately the liner will collapse. You have 14 to push it down the hole using the hose from the emu -- 15 emulsion truck. You also have to put your boosters and 16 down lines inside the liner, then you've got to get it 17 down the hole. Often the top of the hole is broken up. 18 In the winter, it could be closed up partially by ice. 19 The whole thing is -- is -- is going to be very difficult 20 to do. 21 MR. ARTHUR PAPE: Arthur Pape. So why 22 have you persisted in recommending this, sir? I mean 23 you're sounding now like it -- it -- you -- you think 24 it's a waste of time, but if I understand your report, 25 you haven't written this off, you have some other

1 measures that you considered that you deemed not 2 practical and you didn't suggest any consider -- future 3 consideration of those. 4 But this one (1) you've persisted with, 5 why is that? 6 DR. TERRY MATTS: We've persisted with it 7 because it hasn't been tried and because when you look at 8 it, it has maximum benefit. If you can completely 9 insulate the explosive from the mine water, 10 theoretically, you could cut down the ammonium nitrate 11 loss to zero (0). 12 MR. ARTHUR PAPE: Arthur Pape. Now you 13 say this would require -- to really experiment with this 14 would require a real commitment from the top, down. 15 If I understand correctly, neither Golder 16 nor the company has, up to now, made any efforts to 17 experiment with borehole liners and haven't yet developed 18 any experiments or program for doing so, am I right? 19 DR. TERRY MATTS: To my knowledge, that's 20 correct. 21 MR. ARTHUR PAPE: Dr. Koren, I have some 22 questions for you about what you were explaining about 23 the use of natural degradation techniques for decreasing, 24 if I -- if I understood correctly, decreasing the 25 presence of ammonia nitrates in the North Inlet.

1 Sir, I -- I -- I thought you said that 2 there are a number of techniques that you believe could 3 achieve or enhance the natural degradation that takes 4 place in the North Inlet, and you identified several, but 5 if I understood you correctly, those have not been 6 seriously considered by Diavik in its various discussion 7 papers. Am I right? 8 DR. DAVID KOREN: It's David Koren. I 9 believe in the recent responses there were some 10 indications that perhaps aeration may be considered. 11 Cattail mats have always been on their Ammonia Management 12 Plan, I believe to the best of my knowledge. 13 MR. ARTHUR PAPE: Arthur Pape. Well, are 14 there some of these techniques that you have thought 15 worth serious consideration that have not yet been 16 seriously pursued or considered by the company? 17 DR. DAVID KOREN: From what I know of -- 18 it's David Koren -- what I know of what the company has 19 pursued at this point, they've done the literature of 20 use, the studies -- engineering studies, and -- and field 21 trials I don't believe have been -- have been tried at 22 this point. 23 I believe that would be really the next 24 step in looking at some of these technologies. 25 MR. ARTHUR PAPE: Arthur Pape. Well,

1 does the Ammonia Management Plan, as you've read it, 2 include a commitment and a plan for pursuing those kinds 3 of studies in the field? 4 DR. DAVID KOREN: There seems to be some 5 -- it's David Koren -- there seems to be some initial 6 plans, some discussion about experimental programs being 7 put in place and -- and university people involved in 8 experimentation. I'm not sure whether dates or -- or 9 specific programs have been identified as of yet. 10 MR. ARTHUR PAPE: Then I'm left sort of 11 confused by what you appear to say initially, sir. I 12 thought you were saying that there was more that should 13 be pursued in these areas than is now committed to in the 14 draft Ammonia Management Plan that you reviewed. 15 Please explain yourself. 16 DR. DAVID KOREN: It's David Koren. 17 What's committed to in the Ammonia Management Plan, as 18 far as I know, are looking at the feasibility or the 19 practicality of some of the treatment options that I'd 20 mentioned as possibilities. I mentioned them as 21 possibilities only. 22 There's quite a number of them that could 23 be tried and, from what I'm aware of, the Ammonia 24 Management Plan includes a couple of those that I have 25 suggested.

1 MR. ARTHUR PAPE: Arthur Pape. So, if I 2 understand you correctly, there's more the company should 3 be doing in these areas, and you would recommend that 4 they do more than they have committed to up to this time. 5 DR. DAVID KOREN: It's David Koren. 6 That's a difficult question. At this point I suggest 7 that they do some work in this area and, from my 8 knowledge, they're doing some work in this area. 9 A couple of options could be looked at on 10 a yearly basis. If they're not practical, other options 11 could be done perhaps the subsequent season. Some of 12 these can be done during the summer, others require work 13 during the winter. So it requires some sort of planning 14 ahead of time. 15 As far as I know, there are two (2) 16 options being planned so far. Certainly, there are other 17 options available to Diavik to -- to try in the future 18 and, if the initial attempts don't produce useful 19 results, perhaps some of the others could be looked at as 20 well. 21 MR. ARTHUR PAPE: Would these -- would -- 22 would these kind of investigations and experiments 23 involve the expenditure of time and money? 24 DR. DAVID KOREN: It's David Koren. Yes. 25 Yes, they would. In terms of research and development

1 dollars, yes they would. 2 MR. ARTHUR PAPE: Arthur Pape. So you 3 wouldn't expect them to be done unless there was some 4 real motivation or requirement that they be done? 5 DR. DAVID KOREN: If there's motivation 6 to -- to -- it's David Koren -- motivation to look at 7 these as perhaps contingencies or to increase the amount 8 of natural degradation that occurs during specific times 9 of the year. There's motivation from my -- my point of 10 view. 11 MR. ARTHUR PAPE: I have some questions 12 for Mr. Brown. Am I right it's Mr. Brown and not Dr. 13 Brown? 14 MR. ADRIAN BROWN: Yes, you are correct. 15 MR. ARTHUR PAPE: Mr. Brown, some of this 16 -- these question are -- involve your -- your graphs and 17 your probability statements. And I'm not going to ask 18 the questions very well and I would really appreciate it 19 if you would help me with this and do your -- answer 20 these questions sort of statistics for dummies, if you 21 know what I mean. 22 You showed us the -- the graph of ammonia 23 discharge EQC's with the second last slide or PowerPoint 24 -- yes, that one there. And I became confused when you 25 went from that to the next one. You don't need to go to

1 the next one (1) yet but I -- I had thought that the -- 2 the red line at the top was the -- the graph of the -- 3 the predicted daily discharges but I gather that's not 4 correct? 5 MR. ADRIAN BROWN: This is Adrian Brown. 6 No, it is not correct. This entire graph deals only with 7 the monthly or the -- the thirty (30) day EQC. I did not 8 prepare but there would be a companion graph which would 9 look very similar to this or a set of lines which would 10 look very similar to this and I apologize for talking to 11 you with my back to you but that's the way it is I guess. 12 That would look very similar to this only more elevated 13 concentrations for the one (1) day or the -- the 14 instantaneous EQC. 15 The red line at the top -- well, going -- 16 just to reiterate the -- the -- I believe it's the red 17 line at the bottom, the lowest of the lines is the 18 average concentration over a year period. 19 The blue line is the maximum for one (1) 20 month so one would expect that of the twelve (12) monthly 21 readings the blue line represents the -- the highest of 22 those and then the top line, the UCL line, represents a 23 concentration which would -- would never expect to be 24 exceeded by the project and that varies from year to year 25 depending upon the ammonium use and other factors. So

1 that's what those three (3) lines -- none of them 2 represent the corresponding daily calculations. 3 MR. ARTHUR PAPE: Arthur Pape. Just -- 4 that's the second time that I thought I've heard you say 5 that the red line is at the bottom and when I look at the 6 slide I see a green line at the bottom and -- and I don't 7 know if I'm misunderstanding the whole graph. 8 MR. ADRIAN BROWN: This is Adrian Brown. 9 I apologize. I am red/green colour blind which suggests 10 that these were poor choices for the slide which I made. 11 It was clearer on my computer than it is at this range 12 which is only to say that I'm also dangerous at traffic 13 lights. 14 I'll take it from your counsel that -- 15 that the -- the bottom line is green and I will try and 16 couch my responses in -- in those terms. 17 MR. ARTHUR PAPE: It's okay. Well, we're 18 all -- we're all sitting with -- with the same spacial 19 relationship to the graph anyway and we know which one's 20 at the top and which one's at the bottom so that... 21 Now, if -- if I understand if you had -- 22 is this -- was this graph created -- it's -- it's based 23 on actual data; is that right, on actual readings that 24 you then extrapolated from? 25 MR. ADRIAN BROWN: Yes, this graph, the -

1 - the lowest line represents for the period 2003 to the 2 end of 2006 real data. This is the real average and the 3 model is calibrated against that real data such that it 4 falls almost exactly in the -- the average annual 5 concentration right in line with the measured data with 6 that as a what is known in the -- in modelling as a 7 calibration point or a -- a truth test, if you will, the 8 rest of the graph is a extrapolation utilizing expected 9 ammonia use rates providing by DDMI, expected mine inflow 10 rates, for the most part, providing by DDMI and checked 11 by us. 12 And the expected ammonium loss rate 13 improvements based on the work of the panel and again, 14 utilizing as its starting point, information provided by 15 DDMI. So it's real to 2006 and it is extrapolated with 16 that calibrated model into the future. 17 MR. ARTHUR PAPE: Arthur Pape again. Now 18 -- thank you. Now, there is -- there isn't a -- a -- an 19 analogous graph for ammonia discharge EQC's on a -- for 20 the daily figure; is that correct? 21 MR. ADRIAN BROWN: Adrian Brown. Yes, 22 that is correct. I mean, that -- not that we've 23 presented. There is a -- an equivalent graph in the 24 material provided in the report and as support for this 25 document.

1 MR. ARTHUR PAPE: And the daily graph, 2 was it also compiled from data up until 2006 that -- or 3 between 2003 and '06 and it was then extrapolated from? 4 MR. ADRIAN BROWN: Yes, it was. This is 5 Adrian Brown. It was -- let me, perhaps, briefly 6 describe the process. 7 The process that I -- we used for the 8 daily calculation, used the model results which are 9 performed on a monthly basis and then we utilized a 10 correlation between the monthly results that have been 11 observed in the four (4) years of the operation and the 12 daily maxima. 13 So we used a statistical increase in the 14 concentration by adding concentration to them, the -- the 15 monthly, the equivalent of the blue -- well, the actual 16 blue curve that is shown on this graph and then added an 17 allowance for the uncertainty or for variation that 18 occurs as between monthly results and daily results. 19 So we utilized known correlations between 20 monthly averages and the daily maxima to increase the 21 expected maximum monthly concentrations to a computed 22 maximum daily concentration. 23 MR. ARTHUR PAPE: So -- just so I 24 understand this a little better, could you put up the 25 next slide for a second, that one. Thank you. So as a

1 layperson when I look at that, it looks like you might 2 have derived the recommended daily EQC by doubling the 3 monthly, or the thirty (30) day average. 4 I -- I -- do I understand you to say that 5 that's a coincidence that it's -- that the daily 6 recommended EQC is double the thirty (30) day average 7 EQC? 8 MR. ADRIAN BROWN: This is Adrian Brown. 9 Yes, it is. Interestingly, it is a persistent 10 coincidence. It was the -- the doubling was originally 11 contemplated in the two (2) milligram per litre, 4 12 milligram per litre original standard. It seems to have 13 persisted to Diavik's proposed 10 and 20 milligram per 14 litre and the current 10 and 20 milligram per litre. 15 It just turned out this way in this case, 16 so -- and after a great deal of statistical and -- and 17 mathematical manipulation. So it is entirely 18 coincidental, but for all that, it does appear to be a -- 19 a pretty usable rule of thumb if you want to figure out 20 what the daily should be versus on the -- the monthly. 21 It has consistently been approximately 22 double in the real data and in the analysed data that -- 23 that relationship is maintained as you would expect it 24 would be. 25 MR. ARTHUR PAPE: Okay. Arthur Pape

1 again. Wou -- would you please go back to the previous. 2 In -- incidently, just -- just for the record, Mr. Brown, 3 you should know, because it's certainly going to come up 4 here, Diavik today is recommending ten (10) and twenty 5 (20), but one (1) of the reasons we're here is because 6 they wouldn't recommend that at the last hearing. 7 In any event, we -- we're going to come to 8 that issue at another time, but there's something about 9 this graph that is a bit puzzling to me. 10 I -- I see that this graph seems to show 11 that ammonia discharge levels, as a matter of fact, 12 peaked some time around the end of 2006, is -- is that 13 correct? 14 MR. ADRIAN BROWN: I -- I believe it is 15 not quite correct. I have not seen data more recent 16 than, I believe, March of this year and I believe early 17 in this year, there was a peak which was slightly higher 18 in the discharge from the -- the North Inlet, which 19 exceeded these numbers. 20 These are an annual average basis and I 21 put them up this way so that they would be easier for the 22 -- for the Board and for the participants here to see. 23 But on a monthly basis and even a daily 24 basis, the peak, so far, seems to have been the latest 25 data that I have seen, so I can't tell you that that's in

1 fact going to be the peak, but all of our calculations 2 show that very rapidly there's going to be a significant 3 reduction in ammonia use and presumably, hence ammonia 4 loss, which is why these curves drop rapidly into the 5 future. 6 MR. ARTHUR PAPE: All right. Arthur 7 Pape. Let's just stay with that whole issue for a 8 moment. 9 So the -- the -- the visual peak that we 10 see on the graph, do you know what month that represents? 11 MR. ADRIAN BROWN: This is Adrian Brown. 12 The graph is on an annualized basis and so each of those 13 points represents the average for the year that they are 14 opposite on the graph. They are derived, however, from 15 monthly data, which is the basis upon which the 16 computations were performed and the peak month, up until 17 the -- the most recent peak, was in fact, the middle of 18 2006. 19 I believe it was -- it was May, I think, 20 of 2006 and I believe that the history will show that 21 there is a slightly larger peak in early 2007, I think it 22 was January, in fact. I'm not entirely sure that's 23 responsive to your question, but that -- the -- the -- in 24 other words, the -- the -- the highest this year is -- is 25 comparable with -- with these numbers.

1 MR. ARTHUR PAPE: All right. Arthur Pape 2 again. Now this very persistent lowering of the levels 3 on the graph, I -- I take it does take into account the 4 coming on stream of the second surface mine and the 5 increased amounts of water that are predicted to occur 6 with the second surface mine, am I right? 7 MR. ADRIAN BROWN: Yes -- this is Adrian 8 Brown, yes, you are right. 9 MR. ARTHUR PAPE: And tell me, Mr. Brown, 10 this -- this chart -- or this graph, sorry, and the 11 tables that it -- and the data that it reflects, have 12 those been challenged by Diavik? 13 MR. ADRIAN BROWN: I believe, to the best 14 of my knowledge, not in -- in any substantial way, the 15 current set of -- of calculations. This is a product of 16 a -- a dialogue between the panel and -- and Diavik and 17 other Interveners, over the process that -- that was over 18 the time period that Dr. Matts pointed out earlier and I 19 -- in -- in the latest set of comments, I don't believe 20 that there were observations which suggested that there 21 was a disagreement with -- with the process or even the 22 results of this analysis by DDMI. 23 MR. ARTHUR PAPE: All right. Arthur Pape 24 again. Now, in your recommendations, sir, you 25 recommended two (2) different sets of EQCs. You

1 recommended one set for the year 2007, and we're now, of 2 course, in the sixth month of 2007. And you recommended 3 another lower set of EQCs for the period from 2008 4 through to the predicted life of the mine, in 2025. I 5 think I understand. 6 That is correct, that's what you've done, 7 right? 8 MR. ADRIAN BROWN: This is Adrian Brown. 9 Yes, the panel decided that we would, to some extent, 10 bifocate the EQC setting process. 11 MR. ARTHUR PAPE: And -- and you're 12 anticipating my question, because I wanted to know 13 whether this -- whether you made the split this way on 14 instructions, or whether that's something you decided to 15 do as a panel. 16 MR. ADRIAN BROWN: This is something the 17 panel decided to do. 18 MR. ARTHUR PAPE: All right. And then 19 here is something for you to explain to us, sir. I mean, 20 I don't mind telling you it's certainly on the record 21 here and the Board knows this and the other parties know 22 this. My client, the Tlicho government, is -- has a very 23 substantial commitment to the objective of making ammonia 24 loadings into Lac de Gras as low as practicably possible; 25 that is an enormous commitment that they have and, again,

1 I'm not asking you to comment on that but that's 2 certainly the place where my question comes from. 3 Now, as I look at this graph, it seems to 4 suggest that if you had -- that there might be another 5 way to set the EQCs going forward that would produce a 6 different result. You drew a line and -- and set a level 7 for 2007, and then you did one level, which I guess is 8 based on everything from 2008 on. Now, I may be wrong, 9 but it appears to me that if you'd gone out to, say, 2009 10 or 2010 and -- in other words, it -- it appears if I -- 11 and I don't know, because -- but you'd have the tables, 12 so you'd know. 13 It appears that if you'd set a level for 14 2007, and another level for, say, 2008 and 2009, and then 15 another level from 2010 to the end, your third level, 16 that is, your one for most of the remaining life of the 17 mine would be lower than this. Your EQCs would be lower 18 than what you've now proposed for 2008 going forward. 19 But I'm -- I can't quite tell from the graph. 20 MR. ADRIAN BROWN: This is Adrian Brown. 21 You're correct. Our -- perhaps I can -- can -- can 22 provide some insight into our thought process with 23 respect to that. 24 We, as a -- as a -- as a panel believed 25 that there is a trade-off here between what I'm going to

1 describe as regulatory complexity, and achieving of the 2 objective that the -- that were -- was our objective, 3 which was to -- to advise the Board as to the lowest 4 practical concentration for ammonia. 5 When you look at the graph, which is -- 6 which -- to which you refer, the next to the last graph 7 in the presentation, had we chosen to -- to -- to further 8 subdivide the time period -- for example, in taking your 9 example, looking at the period from 2010 to 2025 as a -- 10 as a potential target, this data indicate that what we 11 would have done, as we've chosen to round upwards to the 12 nearest milligram per litre, that would have reduced the 13 EQC for the monthly basis from six (6) to five (5). 14 We chose not to do that, because we felt 15 that given that 2007 will be more than half over by the 16 time any -- any level becomes enforced here that that was 17 not a sufficiently great difference from an ecological 18 point of view to warrant the further subdivision of this 19 -- of this time period. 20 So we decided that -- that the six (6) 21 milligrams per litre was -- was a -- a good choice for 22 the rest of the -- of the time period. I can understand 23 that we could have made other decisions but I think that 24 combines the -- the benefits of simplicity with a -- an 25 environmental standard which is not materially different

1 in terms of impact to the lake. 2 MR. ARTHUR PAPE: Arthur Pape. But if I 3 understand you correctly, if the Board were so inclined 4 based on your data and your work and this -- and the data 5 that's reflected in this graph, the Board -- if the Board 6 was inclined to set a level for 2008 and '09 and another 7 level for 2010 going forward, then I take it your posit - 8 - your recommendation from your panel would be that the 9 level for 2008 and '09 would be six (6) and twelve (12) 10 and the level for 2010 to the end of mine life would be 11 five (5) and ten (10); am I right? 12 MR. ADRIAN BROWN: This is Adrian Brown. 13 Yes, I believe you're right. 14 MR. ARTHUR PAPE: Now, I've got two (2) 15 other sets of questions about all of this. 16 First off, I -- I think you explained this 17 a little more fully in your report that you do � than you 18 did in your oral presentation this morning but there are 19 two (2) things I want you to help us understand, Mr. 20 Brown. 21 One is these suggested EQCs, I -- I want 22 to understand which or how we can be clear on which 23 mitigation measures you are counting on for believing 24 that these are practicable, that is achievable, targets 25 or EQCs. And I think you've got a couple of charts in

1 your report that explain this. I'd like you to take them 2 to us and make sure we understand that. 3 MR. ADRIAN BROWN: The -- this is Adrian 4 Brown -- the mitigation measures which this calculation 5 or this EQC setting process assumes will be utilized and 6 will -- and that -- that at least on average each of them 7 will be effective -- some may be more effective than 8 average, some will be less effective than average 9 presumably, are the following. 10 They involve a double priming of the 11 holes, improved loading of the drill holes or the 12 boreholes. They assume the utilization of an 80 percent 13 emulsion in the -- the ANFO material loaded. They 14 presume a thicker emulsion. They presume a residence 15 time limited to two (2) days. They presume the use in 16 selected holes, that is the very wettest of the holes, of 17 a liner at least reasonably successfully deployed and if 18 I might just say that our evaluation presumes a 20 19 percent effectiveness in the deployment of those -- those 20 -- or 20 percent reduction so by no means the 100 percent 21 reduction that complete deployment successfully of liners 22 would presume. 23 And finally, it also presumes an improved 24 stemming, as Dr. Matts described. So those are I believe 25 seven (7) blasting changes the ensemble effect of which

1 is to significantly reduce the amount of loss of ammonia 2 by we calculate approximately 46 percent but based on the 3 pre-September 2006 condition. 4 MR. ARTHUR PAPE: And -- and -- Arthur 5 Pape. And just before you go on to the other mitigation 6 -- types of mitigation measures let's -- let's make sure 7 that we understand. 8 The seven (7) changes in blasting that 9 you've just enumerated, in order for those to be planned 10 and implemented, some changes are required -- some 11 further changes are required to the Ammonia Management 12 Plan that you reviewed, is that correct? 13 MR. ADRIAN BROWN: I believe Dr. Matts 14 might respond better to that. 15 MR. TERRY MATTS: Yes, this is Terry 16 Matts. Yes, that's correct, it will need some 17 modification. 18 MR. ARTHUR PAPE: And I -- I don't think 19 we need to go into those, but we'll just -- we'll leave 20 it at -- at -- at that on those issues. 21 Now, with respect to water management, 22 what water man -- what water mana -- and incidently, if - 23 - if we wanted to see this list and see these changes, we 24 would have to look at your original report and I gather 25 we would look at -- could we look at section 6 of your

1 original report and then modify it by reading section 6 2 of the modified report, and between them, that's where we 3 would find the overall list of mitigation measures that 4 you're taking account of or would we need to go back to 5 the separate chapters? 6 I'm -- I'm wanting to get this very clear 7 because I don't want there to be any misunderstandings 8 when it finally comes time for the Board to make whatever 9 decision they decide to make. They're going to have to 10 make an evidence-based set of decisions. 11 MR. ADRIAN BROWN: This is Adrian Brown. 12 I believe that your statement is correct, that these 13 modifications to the blasting and other strategies were 14 substantially unchanged as between the two (2) -- the 15 initial report and the response report. 16 However, the materials in chapter 6 of 17 both documents are supported by appendix information 18 provided in the -- in -- in the report, particularly 19 attachment 1 of the -- of -- of the revised report, which 20 sets out in detail the -- not only the -- the blasting 21 changes which are included in the EQC calculation, but 22 their statistical characterization and the way in which 23 they are combined to produce the overall statistical 24 result which is used in the calculation. 25 MR. ARTHUR PAPE: So we would see that,

1 if -- if I understand you correctly, we'd see that on 2 page -- well, it's not numbered, but it -- it's the page 3 that follows page 37 in your second report. 4 MR. ADRIAN BROWN: That is correct, page 5 -- page 1 of 2 of attachment 1; attachment 1 being page 6 37. 7 MR. ARTHUR PAPE: Oh yes, okay. 8 MR. ADRIAN BROWN: And the calculations 9 of the actual statistical work are on page 2 of that same 10 attachment. 11 MR. ARTHUR PAPE: Okay. All right, so if 12 they -- if the -- if the Board accepts your 13 recommendations and requires these further changes to the 14 Ammonia Management Plan that Diavik produced, then the 15 Board could, in your opinion -- well, anyway, that -- 16 that's -- that's the foundation for your EQC 17 recommendations of what's based on practicality, is that 18 the Board would accept your recommended changes to 19 Diavik's draft Ammonia Management Plan on the blasting 20 issues. 21 MR. ADRIAN BROWN: Yes. Adrian Brown. 22 MR. ARTHUR PAPE: All right, now -- it's 23 Arthur Pape again. Now, let's do the same exercise, sir, 24 with respect to the other two (2) types of mitigation 25 measures. So if you would just tell me where we can find

1 the some information, or if you would summarize for me, 2 the same information about mitigation measures based on, 3 I guess, on treatment. 4 What have you -- what treatment mitigation 5 measures are you basing your recommended EQC's on? 6 MR. ADRIAN BROWN: First, with respect to 7 the treatment component of mitigation, the modelling 8 itself allowed us to calculate the amount of ammonia 9 which is currently being lost or destroyed, converted in 10 North Inlet. 11 So having made that calculation and it's 12 simply by comparing the amount of ammonia that is 13 observed to be discharged from the mine systems and 14 looking at the amount of ammonia which passes into the 15 North Inlet and by, essentially, subtracting those two 16 (2), we're able to see how much ammonia is destroyed. 17 We chose, after consideration, to increase 18 the amount of ammonia which is destroyed to twen -- a 19 maximum of 20 percent greater amount of ammonia in 20 reflection of the fact that the -- the North Inlet volume 21 and, presumably, surface area is in the process right now 22 of being substantially expanded, approximately doubled. 23 And so as a result, we felt it was 24 appropriate to include a 20 percent increase in the 25 amount of -- in the maximum amount of destruction in any

1 given month of ammonia in North Inlet. 2 That is the only treatment option for 3 which credit was taken in the evaluation which produced 4 the EQC calculations which -- and the EQC result, which 5 we have presented today. 6 There was a second portion of your 7 question which I think I'm going to have to ask you to 8 ask again, sir. 9 MR. ARTHUR PAPE: Arthur Pape. Well, I 10 was just going ask you where -- where this is found. 11 It's -- I -- I don't think it's in attachment 1. 12 MR. ADRIAN BROWN: No, it is not in 13 attachment 1. 14 MR. ARTHUR PAPE: Is it -- is it 15 correctly stated back on page 30 of your report, in 6.3? 16 MR. ADRIAN BROWN: Yes, it is. The 17 actual calculations for the -- the reduction that 18 currently occurs come out of the calibration process 19 against the origin -- against the existing data, which I 20 believe are presented in -- and this is a little 21 confusing, the page numbering, but in what is the -- the 22 third, forth, fifth and sixth page of attachment 1. 23 24 (BRIEF PAUSE) 25

1 MR. ARTHUR PAPE: Mr. Brown, what 2 confuses me a bit - and I may not be reading it correctly 3 - but I -- I don't understand and perh -- I -- I -- or I 4 would ask you to help me understand, why the panel didn't 5 recommend any other treatment options as additional 6 mitigation measures to lower ammonia loadings. 7 If I properly understood chapter 4 of your 8 original report, you considered that there were several 9 treatment options that were practical and would be 10 effective and yet if I understand you now you only based 11 your recommended EQC on what would flow from the 12 enlargement of the North Inlet? I -- I may not be 13 understanding what you said and -- but if I am, I'd like 14 you to explain why the panel didn't review any addit -- 15 didn't recommend any additional treatment measures. 16 MR. ADRIAN BROWN: I -- this is Adrian 17 Brown. I believe that Dr. Koren can best respond to 18 that. 19 DR. DAVID KOREN: It's David Koren. Yes, 20 between the first and the second versions there were some 21 changes based on information that was received from the 22 Intervenors and the -- the proponent itself as to the 23 practicality of some of the -- some of the treatment 24 options. 25 Most of them were -- were natural

1 degradation options that perhaps could still be on the 2 table but there's not a lot of information that's 3 available in terms of the practicality and not a lot of 4 information on -- on application of many of the other 5 technologies. They should really be -- be tested at a 6 field trial to determine whether they're practical or not 7 but what we do feel is that the 20 percent reduction is - 8 - is feasible and practical for -- for this site. 9 MR. ARTHUR PAPE: So -- it's Arthur Pape. 10 So, Dr. Koren, if -- if I understand you 11 correctly there are some other treatment mechan -- 12 treatment mitigation measures that you had originally 13 considered practical and -- and effective and worthwhile 14 and that on the basis of some other response you had, 15 you're less confident that they are practical or would be 16 effective but, nonetheless, it continues to be your 17 opinion that they're serious enough options that they 18 should be pursued and -- and tried; do I understand? 19 DR. DAVID KOREN: It's David Koren. Yes, 20 at the field trial scale, like I said, there's not a lot 21 of information that gives a lot of confidence to the 22 results that others have -- have come up with in the 23 literature so testing at a specific site is what's 24 needed, at this point, and this is what's recommended to 25 look at these other natural degradation techniques to

1 determine what's practical. 2 MR. ARTHUR PAPE: Arthur Pape. So has 3 your -- your second version of your report -- does it 4 recommend adding further research and field trials for 5 those mechanisms into the AMP? 6 Do you -- do you make that recommendation 7 in your second report? 8 MR. DAVID KOREN: It's David Koren. Yes, 9 I do and I mentioned some of the options during the 10 presentation itself. There are several options that can 11 be looked at. Some of them may work; some of them may 12 not work. It's just a matter at this point to try them 13 and -- and see what's practical to be done at the site. 14 MR. ARTHUR PAPE: Dr. Koren -- it's 15 Arthur Pape again. You know, based on your experience 16 both academic and practical you -- you consider that it's 17 worth pursuing these because they may, in fact, provide 18 mitigation measures that would be practical and would 19 increase the ability of the company to -- to lower 20 ammonia nitrate loadings into the lake; am I right? 21 DR. DAVID KOREN: David Koren. Yes, you 22 are correct. 23 MR. ARTHUR PAPE: Mr. Brown, could you -- 24 could you make sure that we understand, as far as water 25 modelling goes, what mitigation measures you are counting

1 on, if any, in your recommendation about the practical 2 EQCs that you have recommended, the practicable EQCs? 3 MR. ADRIAN BROWN: This is Adrian Brown. 4 Yes, the mitigation measures that we are 5 relying upon, the ensemble effect of the blasting 6 measures which I alluded -- which I listed earlier, the 7 seven (7), the 20 percent increase in ammonia destruction 8 as a maximum in the North Inlet and we -- the 9 calculations also include, going forward, an increase in 10 the volume of water in the North Inlet. 11 So whilst that is in our understanding 12 being the -- the North Inlet as being expanded not for 13 the purpose primarily of ammonia control, but for the 14 purpose of -- of reducing the need to expand the -- the 15 treatment system at the plant, it will have a -- a 16 beneficial effect, albeit a small one, on reduction of 17 ammonia at discharge because of the longer residence time 18 that is expected to occur in the inlet. 19 Our calculations and our EQC setting 20 considers that mitigation. As I stated in my 21 presentation, we also considered the possibility that if 22 flow to the A1 -- excuse me, the A418 mine is lower than 23 -- or is -- as a low as expected by DDMI and their 24 consultants, in their calculations, then that ammonia 25 could be transferred and the water with it could be

1 transferred to the kimberlite system and removed from the 2 system. 3 The EQC setting that we have done here 4 does not make that presumption, but what it does presume 5 is that there will be a higher flow such as will cause 6 the -- the water from the A418 mine to be transferred to 7 the North Inlet. 8 Put another way, it does presume that the 9 dilution that is attendant on that larger flow will 10 occur, so that, you know, that we have been at least 11 consistent in our evaluation of saying we will put the 12 additional water into the North Inlet along with the 13 ammonia. 14 So that is a -- a mitigation, might be not 15 quite the right word, but that -- that is the effect of 16 the calculations. We just -- so the record is clear, we 17 considered a fairly significant range of possible 18 treatments in the analysis and with -- as -- as a panel, 19 with Dr, Koren's expertise, we chose not to include, 20 except for the consideration of the 418 mine, what I'm 21 going to characterize as a -- a range of temporal 22 separation possibilities, whereby segregating out a small 23 high concentration flow from somewhere in the mining 24 process that could be treated and the ammonia removed. 25 Our reason was that in the circumstances

1 and based on our field visit and review, both surface and 2 underground, we did not believe that there were going to 3 be many such opportunities that would be practical -- or 4 really any such opportunities that would be practical -- 5 practical enough that we could include them in a 6 regulatory EQC setting process with the exception of the 7 A418 low flow condition. 8 With -- and I believe in our report we've 9 recommended to the Board that where those opportunities 10 exist that Dia -- Diavik should be encouraged to take 11 advantage of them, but we have not included them in the 12 EQC setting process. 13 MR. ARTHUR PAPE: Arthur Pape. Just to 14 finish that one up, Mr. Brown, what would encouragement 15 look like if the Board wanted to encourage that, what 16 would the Board do? 17 MR. ADRIAN BROWN: I believe that's a 18 little out of our -- our scope of work, but perhaps the - 19 - the Board might be better to comment on that. 20 MR. ARTHUR PAPE: Well, then let me ask 21 you some more things that certainly are within the scope 22 of your work. 23 Would you turn to page 32 of your second 24 report? 25 MR. ADRIAN BROWN: Yes.

1 MR. ARTHUR PAPE: And I'm -- I'm looking 2 now at table 6.1 and I'm looking at it and I'm also at 3 the same time looking at the slide that follows the graph 4 that's up on the screen right now. Yes, that one. So I 5 want you to help us with all of this. 6 On this table 6.1 there are two (2) sets 7 of EQC numbers here. First you have an average. I don't 8 think that's terribly helpful to us but then you have two 9 (2) sets of numbers. Reading across the -- the chart you 10 have maximum thirty (30) day and maximum one (1) day and 11 if we look at it for example in the 2008 to '25 we see 12 that the -- the table says the maximum thirty (30) day 13 figure would be one point five (1.5) and the maximum one 14 (1) day figure would be three point two (3.2). 15 Now, then I know you have a different set 16 of those same numbers just below it but I want you to 17 explain to us what are these numbers, the one point five 18 (1.5) and the three point two (3.2)? 19 How are we to understand those? 20 MR. ADRIAN BROWN: This is Adrian Brown. 21 Those numbers are the expected maximum. 22 What we -- the way that they were derived was that we 23 took all of the inputs which were -- I've previously 24 described as to ammonia inputs, water inputs, and the 25 like and calculated the expected maximum. This makes no

1 allow -- this is a -- a central measure of the maximum. 2 This makes no allowance for all of the 3 uncertainties that exist in performing a calculation of 4 this type, for example, when you calculate what the -- 5 the monthly concentration in say, you know, Decembe